PRESS BRIEF

TRADE AND LABOUR STANDARDS

    Labour standards are currently not subject to World Trade Organization rules and disciplines but some industrial nations believe the issue should be studied by the WTO as a first step toward bringing the matter of core labour standards into the organization.

    These industrial member states believe the right to bargain collectively, freedom of association and workplace abuse, (including forced labour and certain types of child labour), are matters for consideration in the WTO. WTO rules and disciplines, they argue, would provide a powerful incentive for member nations to improve workplace conditions.

    These proposals have been highly controversial.

    Many developing and some developed nations believe the issue has no place in the WTO framework. These nations argue that efforts to bring labour standards into the arena of multilateral trade negotiations are little more than a smokescreen for protectionism. Many officials in developing countries believe the campaign to bring labour issues into the WTO is actually a bid by industrial nations to undermine the comparative advantage of lower wage trading partners.

    The controversy over the issue of trade and labour standards is not new. Almost every Minister who spoke at the Ministerial Conference in Marrakesh in 1994 expressed a view on whether there was role for the WTO in this area. The Chairman of that meeting concluded there was no basis at the time for agreement on this issue. Since then there has been debate in the International Labour Organisation on the possibility of including a "social clause" in the WTO to enforce core ILO labour standards. The debate there has also been marked by divergences of view between ILO member governments and more generally across an ILO structure that includes representatives from government, labour and business.

    An empirical study produced by the Organization for Economic Cooperation and Development earlier this year on "core workers rights and international trade" has enriched the substance of the debate, but so far at least, it has not narrowed noticeably the differences of view of WTO Members on whether the subject properly belongs in the WTO.

    During preparations for the Singapore Ministerial Conference, proposals were made by the United States and Norway for a decision to be taken by Ministers for the WTO to undertake work on promoting core labour standards in the context of global trade liberalization and to report back to Ministers at their 1998 Conference. Both proposals view WTO work in this area as complementing that of the ILO, which they recognize has primary international responsibility in this field. Both countries view the objective as reaching a common understanding among WTO members on how to reinforce the mutually supporting nature of increased trade and improving labour standards.

    While some WTO Members expressed support for the approach suggested by the United States and Norway, many others raised serious reservations about any structured discussion of trade and labour standards in the organization.

    WTO Director General Renato Ruggiero has suggested four points on which a consensus on this difficult issue might be built. In his consultations with member states, Mr. Ruggiero has found wide support for the four points, which are as follows:

    -    All WTO member nations oppose abusive work place practices, through their approval of the United Nations Universal Declaration of Human Rights.

    -    The International Labour Organization holds primary responsibility for labour issues.

    -    Trade sanctions should not be used to deal with disputes over labour standards.

    -    Member states agree that the comparative advantage of low wage countries should not be compromised.


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