UNDERSTANDING THE WTO:
CROSS-CUTTING AND NEW ISSUES
Labour standards: consensus, coherence and controversy
Labour standards are those that are applied to the way workers are treated. The term covers a wide range of things: from use of child labour and forced labour, to the right to organize trade unions and to strike, minimum wages, health and safety conditions, and working hours.
More introductory information
> The WTO in Brief
Consensus on core standards, work deferred to the ILO
There is a clear consensus: all WTO member governments are committed to a narrower set of internationally recognized “core” standards — freedom of association, no forced labour, no child labour, and no discrimination at work (including gender discrimination).
At the 1996 Singapore Ministerial Conference, members defined the WTO’s role on this issue, identifying the International Labour Organization (ILO) as the competent body to negotiate labour standards. There is no work on this subject in the WTO’s Councils and Committees. However the secretariats of the two organizations work together on technical issues under the banner of “coherence” in global economic policy-making.
However, beyond that it is not easy for
them to agree, and the question of international enforcement is a minefield.
Why was this brought to the WTO? What is the debate about? back to top
Four broad questions have been raised inside and outside the WTO.
The analytical question: if a country has lower standards for labour rights, do its exports gain an unfair advantage? Would this force all countries to lower their standards (the “race to the bottom”)?
The response question: if there is a “race to the bottom”, should countries only trade with those that have similar labour standards?
The question of rules: Should WTO rules explicitly allow governments to take trade action as a means of putting pressure on other countries to comply?
The institutional question: is the WTO the proper place to discuss and set rules on labour — or to enforce them, including those of the ILO?
In addition, all these points have an underlying question: whether trade actions could be used to impose labour standards, or whether this would simply be an excuse for protectionism. Similar questions are asked about standards, i.e. sanitary and phytosanitary measures, and technical barriers to trade.
The WTO agreements do not deal with labour standards as such.
On the one hand, some countries would like to change this. WTO rules and disciplines, they argue, would provide a powerful incentive for member nations to improve workplace conditions and “international coherence” (the phrase used to describe efforts to ensure policies move in the same direction).
On the other hand, many developing countries believe the issue has no place in the WTO framework. They argue that 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, and could undermine their ability to raise standards through economic development, particularly if it hampers their ability to trade. They also argue that proposed standards can be too high for them to meet at their level of development. These nations argue that efforts to bring labour standards into the arena of multilateral trade negotiations are little more than a smokescreen for protectionism.
At a more complex legal level is the
question of the relationship between the International Labour Organization’s
standards and the WTO agreements — for example whether or how the ILO’s
standards can be applied in a way that is consistent with WTO rules.
What has happened in the WTO? back to top
In the WTO, the debate has been hard-fought, particularly in 1996 and 1999. It was at the 1996 Singapore conference that members agreed they were committed to recognized core labour standards, but these should not be used for protectionism. The economic advantage of low-wage countries should not be questioned, but the WTO and ILO secretariats would continue their existing collaboration, the declaration said. The concluding remarks of the chairman, Singapore’s trade and industry minister, Mr Yeo Cheow Tong, added that the declaration does not put labour on the WTO’s agenda. The countries concerned might continue their pressure for more work to be done in the WTO, but for the time being there are no committees or working parties dealing with the issue.
The issue was also raised at the Seattle Ministerial Conference in 1999, but with no agreement reached. The 2001 Doha Ministerial Conference reaffirmed the Singapore declaration on labour without any specific discussion.
This issue was also indirectly mentioned in the Appellate Body Report (see para. 182) on the dispute initiated by India against the European Communities concerning the conditions for granting of tariff preferences to developing countries.
The official answer
What the 1996 Singapore ministerial declaration says on core labour standards
“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.”