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DOHA WTO MINISTERIAL 2001: BRIEFING NOTES

TRADE AND LABOUR STANDARDS 
A difficult issue for many WTO member governments
 

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Contents

> Director-General’s letter to journalists
> Background
>
Least-developed countries (LDCs)
>
Agriculture
>
Sanitary and phytosanitary (SPS) measures
>
Trade in services
>
Implementation issues
>
Intellectual property (TRIPS)
>
Textiles and clothing
>
Information technology (IT) products
>
Trade and environment
>
Trade and investment
>
Trade and competition policy
>
Transparency in government procurement
>
Trade facilitation
>
Trade and labour standards
>
Disputes
>
Electronic commerce
>
Members and accession
>
Regional trade agreements
>
Some facts and figures
>
Glossary of terms

 

 

 

 


There is no issue which inspires more intense debate among World Trade Organization member governments than the issue of trade and core labour standards.

Labour standards are not subject to any WTO rules or disciplines at present, and while the issue continues to be a deeply important one for some developed country governments, it seems unlikely that the issue will be taken up in any official way at the Doha Ministerial Conference.

Advocates for including labour standards on the WTO’s agenda of future work maintain rights including the freedom to bargain collectively, freedom of association, elimination of discrimination in the workplace and the elimination of workplace abuse (including forced labour and certain types of child labour) are matters which should be considered in the WTO. In the past, member governments have suggested that a WTO working party be established to examine the link between trade and core labour standards. Other member governments have suggested that a working group involving a number of international organizations be established to examine the social issues that are affected by globalization.

But developing countries have another view. Member governments from the developing world believe attempts to introduce this issue into the WTO represent a thinly veiled form of protectionism which is designed to undermine the comparative advantage of lower-wage developing countries. Officials from these countries say that workplace conditions will improve through economic growth and development, which would be hindered should rich countries apply trade sanctions to their exports for reasons relating to labour standards. Application of such sanctions, they say, would perpetuate poverty and delay developmental efforts including those aimed at improving conditions in the workplace.

The issue of trade and labour standards has been with the WTO since its birth. In April 1994, when trade ministers gathered in Marrakesh to sign the treaty that formed the WTO, nearly all ministers expressed a view on this issue. The Chairman of that conference concluded that there was no consensus among member governments at the time, and thus no basis for agreement on the issue. The Marrakesh agreement itself states in the preamble that “relations in the field of trade and economic endeavour should be conducted with a view to raising standards of living (and) ensuring full employment …”. In addition, Article XX of the General Agreement on Tariffs and Trade 1994, states that governments may restrict imports “relating to the products of prison labour.”

At the First WTO Ministerial Conference in Singapore in December 1996, the issue was taken up and addressed in the Ministerial Declaration. Ministers stated:

We renew our commitment to the observance of internationally recognized core labour standards. The International Labour Organization (ILO) is the competent body to set and deal with these standards, and we affirm our support for its work in promoting them. We believe that economic growth and development fostered by increased trade and further trade liberalization contribute to the promotion of these standards. We reject the use of labour standards for protectionist purposes, and agree that the comparative advantage of countries, particularly low-wage developing countries, must in no way be put into question. In this regard, we note that the WTO and ILO secretariats will continue their existing collaboration.”

Existing collaboration between the WTO and ILO secretariats includes participation by the WTO in meetings of ILO bodies, the exchange of documentation and informal cooperation between the two secretariats. Director-General Mike Moore meets regularly with ILO Director-General Juan Somavia.

At the 3rd Ministerial Meeting in Seattle in December 1999, the issue of core labour standards was perhaps the most divisive issue on the agenda. In the run-up to the meeting, both the United States and the European Union put forward proposals for addressing the issue of labour standards inside the WTO. Although, officials from both members said they did not envision the use of trade sanctions in the context of the labour standards issue, both proposals were fiercely opposed by developing country governments.

At the conference itself, the US, EU and other developed country governments fought to get the issue addressed in a working group and succeeded. Debate in that group was intense and there was strong disagreement among members. On his way to the conference, Former-US President Bill Clinton, told a Seattle newspaper that he believed that trade sanctions might one day be used in retaliation for labour-standard violations. When the story appeared the next day, the impact on the conference was substantial. Developing-country delegates hardened their resolve and although there was serious debate on how the issue may be discussed inside an international framework, consensus on any role for the WTO on the question of labour standards was not attained.

Since the Seattle Ministerial Conference, governments from around the world have turned their attention to the ILO as the forum for addressing this question. During the June 2001 meeting of the ILO governing body, the Working Party on the Social Dimension of Globalization reached several agreements on how it might proceed with its work. It was agreed informally that the technical capabilities of the Working Party needed to be addressed and that issues for further discussion needed to be decided in advance. There was general agreement that trade liberalization and employment and investment, with special emphasis on poverty reduction, should be issues taken up by the Working Party.

There was also general agreement that a permanent forum for exchange of views should be established. High-level meetings could be arranged on an ad hoc basis. Members agreed generally as well that the ILO contribution to the international policy framework on the question of globalization needed to be enhanced and that a report on the social dimension of globalization could be written. Views differed on the issues that such a report may cover.

There was further the idea that a global commission of eminent personalities could be formed to examine the social aspects of globalization, but no agreement was reached on this point, though there was consensus that it was an idea worth pursuing in the future.

Among the ideas discussed was that the report on globalization could be written by this commission and that the commission could be launched under the aegis of the United Nations Secretary General Kofi Annan. Additionally, there was discussion that the commission might be serviced by a secretariat, under ILO organization, that may include representatives from the secretariats of other interested organizations. Final decisions on all of these elements will be taken by the ILO’s governing body which meets in November 2001.

The actions taken in June 2001 follow on from the ILO’s 1998 adoption of the Declaration on Fundamental Principles and Rights at Work and it’s Follow-up. This declaration states that ILO member governments endorse some basic principles included in ILO core conventions. (These conventions are the fundamental workplace rights and include: freedom of association and recognition of the right to collective bargaining; elimination of all forms of forced labour; the effective abolition of child labour and the elimination of discrimination in hiring and employment practices.)

ILO members agreed to respect and promote these core conventions even if they have not ratified all of them. The ILO issues annual reports in which ILO officials obtain information from governments which have not ratified all conventions on any changes that may have taken place in national laws or regulations which may impact on these fundamental labour rights.

In 1999, ILO member governments also agreed to prohibit and eliminate the worst forms of child labour. These practices were defined as all forms of slavery, child prostitution and pornography, the use of children to traffic in drugs and work which is likely to harm the health, safety or morals of children. ILO member governments said they recognized that child labour is largely a function of poverty and that the long-term solution to the elimination of exploitative and harmful child labour is through sustained economic growth.