Financial Express, November 27, 2001
By Pradeep S Mehta
“Show me one piece of evidence where any government has asked for a social clause in the WTO, except when Bill Clinton asked for such an arrangement at Seattle”, said Pascal Lamy, the European Union’s trade commissioner, speaking to a civil society gathering at Delhi last week. “Like the WTO should speak with all other international bodies: ILO (International Labour Organisation) or IMF or Bank, it should also have a dialogue with the ILO on social issues”. Indeed, that is what the final Doha Ministerial Declaration says. The issue of labour standards in the trade regime is not yet dead.
A close look at the Draft Ministerial Declaration prepared before the meeting and the final Declaration after the meeting, reveals that there are grey areas, and the issue may not be entirely dead. The arguments from developing countries, including India, on the extraneous and protectionist nature of these issues are quite understandable and convincing.
Demanding the inclusion of social issues in WTO implies opening the window for never-ending non-trade issues including gender, human rights and social development, all of which fall into the purview of sustainable development. This contamination of trade with non-trade issues certainly does not promote the trade agenda. Rather, this sort of linkage has immense potential for abuse as a protectionist device of the North. The poor countries, therefore, argue that, it would help only a few rich countries, not global welfare. Most of the developing countries also seem to be quite united against their inclusion in the trade talks. But it would be quite unwise to assume that die-hard advocates of social clause have given up and are likely to sit quietly.
Perhaps in Doha they were less vocal as they had the fear of repetition of Seattle failure in mind. Nonetheless they used every opportunity to push forward their own agenda. Moreover, the window for social concerns has been in a sense already opened by inclusion of environment in the agenda. Though the case of environment is slightly different from that of labour standards, the way trade talks took a swift turn in Doha signals the worse to come.
The developing countries were at last moment compelled by the EU and others to agree on environment as a precondition for negotiation on agriculture. One should bear in mind that labour standards could follow a similar route in near future. The International Confederation of Free Trade Unions (ICFTU), with its hardnosed approach in the trade union movement and, direct and indirect support of many western countries, is still blaring about trade-labour linkages. Just before the Doha meeting it issued a statement insisting that trade agreements must contain labour standards enforced by the threat of sanctions. Importantly, the ICFTU has also distorted its actual position (which emerged in the Durban congress of ICFTU in 2000) that the ILO should be the standard-setting body and the ultimate implementing body on sanctions, if any.
A clear preference for the WTO over the ILO as the ultimate decision- making body to impose sanctions was reflected in this statement, on which there is a discord in the membership. The southern supporters of the social clause, such as the Malaysian Trade Union Congress and the South African Trade Union Confederation, are quite piqued with this change by the north-dominated ICFTU, though they are not so vociferous about their discord.
Be that as it may, the final declaration of Doha meeting on the issue of labour standards states: “We reaffirm our declaration made at Singapore Ministerial Conference regarding internationally recognised core labour standards. We take note of work under way in the International Labour Organisation (ILO) on the social dimension of globalisation”.
A careful analysis of the statement reveals that it in no way rules out a possible role for WTO on the debate on the social dimension of globalisation. More importantly, a significant line recognising ILO as a more suitable place to discuss labour standards that appeared in the revised draft declaration of 27th October, 2001, has been removed from the final declaration under the influence of the social clause protagonists. The deleted line reads as: “The ILO provides the appropriate forum for a substantive dialogue on various aspects on the issue”.
If this was retained, it would have reinforced the role of ILO, and would have had a different impact altogether. Given this, countries like India should keep their fingers crossed and at the same time also prepare a gameplan in advance should there be any attempts to link WTO and the labour standards. The western countries because of domestic compulsions or otherwise are still interested in bringing in the so-called new issues including that of investment, competition and environment. Though they are not very vocal at the moment but demand for labour standards appears to be next in the line.
While India has to still create a consensus at domestic level on its ongoing labour reforms, it should also keep in mind the accession of China into the WTO and chalk out its plan of action accordingly. Looking at the poor labour conditions in China, the demand will gain momentum. Mind you, even our clothing exporters are losing out to the suppressed labour costs of the Chinese.
On the other hand, we have to become a bit proactive and raise the issue of real concern to us in the labour standards game: free labour mobility across countries. In fact, the issue of movement of natural persons could be used a as a trump card by us, if it is used effectively and timely in the international trade negotiations. For this, we need to do huge research and link it to the sustainable development agenda.
If trade is about give and take, we should also push hard for an agreement on movement of natural persons with no strings attached. We should be happy to discuss all other issues including the most contentious one if issues of our interest are also there on the agenda