WTO Trade & Labor Standards.

Throughout the 1990s, both International Labor Organization (ILO) decisionmaking bodies and World Trade Organization (WTO) agenda-setting meetings extensively debated whether and how trade policy should address issues of labor standards. In the WTO, labor standards were debated in ministerial conferences in Punta del Este in 1986 and in Marrakesh in 1994. The debate became especially heated in the last two ministerial meetings in Singapore and Seattle in 1996 and 1999 respectively. Since 1994 a working party in the ILO Governing Body on the Social Dimensions of the Liberalization of International Trade has debated how the ILO, in an international economy increasingly subject to market forces that frequently denigrate labor rights, should protect and promote core labor standards--i.e, the rights to freedom of association and collective bargaining, the prevention of child and forced labor, and the outlawing of discrimination.

The debate has sharply divided WTO member governments between developed and developing countries. The latter claim that any policy or institutional linkages between trade and labor standards would be a slippery slope to protectionism. The U.S. has been the most vocal developed country to argue that linkages exist and to propose that they need to be recognized and dealt with in the WTO.

Advocates for consideration of trade and labor linkages in the WTO argue that at least two GATT articles justify trade restrictions based on violations of fundamental labor rights:

1. Article XX on general exceptions permitting trade restrictions is frequently cited, as it allows member governments to restrict trade to protect "public morals" and "human life and health." (Amending Article XX to include core labor standards would provide for a more specific exception.)

2. Artide XXIII on dumping is cited when contending that suppressed worker rights in export industries constitute "social" dumping.

The ILO governing body has also become a venue for debate on trade and labor standards. Although ILO worker members agreed in 1994 to suspend discussion of "sanctions," their explicit objective in the working party has been to strengthen ILO capacities to promote core labor standards and thereby raise their importance as a crucial issue in trade liberalization policymaking.

The ILO Declaration on Fundamental Principles and Rights at Work and its follow-up mechanism are important first steps. The declaration carefully balances the obligations of member states "to respect, to promote and to realize ... the principles concerning the fundamental rights which are the subject of the core labor standards conventions with the obligations of the ILO to assist its members to attain these rights by making full use of its constitutional, operational and budgetary resources."

The follow-up mechanism represents an important advance in ILO capability to respond to social problems resulting from global economic liberalization. "The purpose is to provide an opportunity to review each year ... the efforts made in accordance with the declaration by member states which have not yet ratified the core labor standards conventions." The U.S. has strongly supported the declaration and has contributed $20,000,000 for its follow-up mechanisms to assist ILO member governments to ratify the key core labor standards conventions.

The U.S. has not explicitly proposed interpretations or amendments of Articles XX or XXIII. Instead, since 1987 it has consistently proposed the establishment of a working party to examine how "internationally recognized labor standards" relate to international trade and to the objectives of the General Agreement on Tariffs and Trade (GATT).The U.S. position has evolved over the years to enumerate ILO core labor standards as key benchmarks for worker rights. At the Singapore ministerial conference in 1996, the U.S. urged WTO-ILO cooperation to find ways the two organizations could be mutually supportive. The proposal also specified the need to ensure the open and nondiscriminatory nature of the trading system.

In 1999, the U.S. proposal to the WTO ministerial meeting in Seattle recommended specific issues for consideration by a working party, including the relationship between trade, core labor standards, and social protection; positive trade incentives; trade and forced labor; and trade-induced derogation from national labor standards--including export processing zones. The EU proposal for ministers in Seattle was for a "Standing Working Forum on Trade, Globalization and Labor Issues," representing a weak compromise between those wanting a working party and those who considered WTO consideration of trade and labor linkages too political for the ministerial agenda.

Key Points

* The trade and labor standards debate is a longstanding and important issue in both the GATT/WTO and the ILO.

* The United States has advocated the establishment of a working group in the WTO and the universality of core labor standards.

* Many developed countries support the U.S. position, while most developing countries oppose it.

Brewster Grace ([e-mail]) is Representative for Trade and Development at the Quaker United Natures Office in Geneva. The views are those of the author only and do not reflect those of the Quaker United Nations Office.