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 You are in: Special Report: 1999: 11: 99: Battle for Free Trade
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Wednesday, 24 November, 1999, 12:10 GMT
WTO's labour battle
About 250m children work in developing countries

Few people like to think their computer or sports goods were made by a third world worker earning a pittance in appalling conditions.

The battle for free trade
Many would choose not to buy goods from companies with a reputation for exploiting workers in developing countries, while some companies cater for the ethical dollar.

The issue has now become a political hot potato for the World Trade Organisation ( WTO), who expect a barrage of protestors to greet them when the next round of trade talks kick off in Seattle in November.

Chinese exports to the US are on the up
Campaigners say it is easier to punish a country for violating patent laws than it is for illegally using child labour. The WTO talks have become a focal point for these campaigners, who say barriers should only be lifted when workers rights are in place.

Unions unite

President Clinton last week bit the labour bullet, calling for a special group to be set up to look at labour standards.

"How can we deny the legitimacy, or the linking, of these issues in the new global economy?" President Clinton asked.

Clinton wants the WTO to look at labour issues
Behind the rhetoric lies his fear that shabby working conditions and poorer environmental standards will encourage companies to relocate to poorer countries.

His statement also sought to reassure trade unionists that their concerns would be put on the negotiating table - and also to ensure that they back the Democratic candidate at the upcoming Presidential elections.

US union groups say core workers' rights and environmental protection should be incorporated into WTO rules with strong enforcement procedures.

Other unions agree.

"They ( the WTO) cannot be the only institution that says labour standards are none of their business," Eddy Laurijssen of the International Confederation of Trade Unions said.



Many protestors fear that cheaper goods from developing countries endangers their own jobs. These cheaper imports could also force wages in the developed world lower to ensure they remain competitive.

The US unions' approach has stemmed from their success earlier in the decade in forcing the US government to include labour standards in the NAFTA agreement which created a free trade zone between the United States, Canada, and Mexico.

The European Union Trade Commissioner Pascal Lamy said labour standards will be discussed in the new round, but he said the EU is not considering imposing sanctions on countries that don't meet these standards.



Free trade fears

The fear that free trade jeopardises jobs is not a new one but the WTO say falling wages or job cuts are usually due to technological change not cheap imports.

Even if individual jobs are lost, national income and prosperity as a whole is boosted by free trade, the WTO argues.

The WTO has some support for its views from the Paris-based Organisation for Economic Cooperation and Development (OECD). It says that imports from low-wage countries account for only 10% to 20% of wage changes in developed countries.

Not a job for the WTO

But while the unions voices may have been the loudest so far, many say sorting out workers rights is not an issue for the WTO.

"There isn't a chance in the world that developing countries would agree to a clause in the WTO," World Development Movement (WDM) director Barry Coates said. "If there is one thing that unites them, it is this."

Developing countries see talk of workers rights and environmental protection as a trojan horse for Western protectionism.

Other development bodies agree. They think the job is one for the United Nation's International Labour Organisation ( ILO).

The ILO has adopted conventions setting core labour standards as well as banning the more brutal forms of child labour.

Moore says rich countries should drop trade barriers
"We are calling for strict enforcement of ILO core conventions," WDM's Coates said. "The UN has got to play a central role...We would much rather see a UN mechanism for enforcement ( than the WTO)."

Oxfam says there should be an ILO/WTO working group on the issue, but shares WDM's doubts about the WTO news.

"There are certain key rights, but is the WTO the right place to enshrine these rights?" an Oxfam spokesman said.

Excluding poorer countries from the free market party might only make matters worse for countries who depend on exports for their incomes.

Added to this volatile mix is a new WTO leader, Mike Moore. A former trade unionist, he says the organisation can benefit both poor and rich countries. He says there was a "moral imperative" that richer countries dropped their trade barriers which bar imports from developed countries
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See also:
20 Oct 99 |  The Economy
World trade talks could stall
02 Sep 99 |  The Economy
WTO, champion of the 'vulnerable'
18 Oct 99 |  The Economy
WTO hits back at eco-critics
09 Jul 99 |  The Economy
WTO boost for China

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