Introduction to labour standard

According to the Organization for Economic Cooperation and Development (2000, p. 20), there
are eight fundamental International Labor Organization Conventions that form the basis of
consensus among the ILO’s constituents. These include: (1) prohibition of forced labor (ILO
Convention No. 29 and 105); (2) freedom of association and protection of the rights to organize
and to collective bargaining (No. 87 and 98); (3) equal remuneration for men and women for
work of equal value (No. 100); (4) nondiscrimination in employment and occupation (No. 111);
and (5) minimum age of employment of children and abolition of the worst forms of child labor
(No. 138 and 182).

Declaration on fundamental principles and right at work has established four basic principles

Trade sanction for violation of moral responsibility is justified: The humanitarian

consideration or moral argument of the linkage between the trade and labour is the betterment in
working condition and exclusion of certain categories of labour. Example includes the argument
of protecting a child from working instead of being at school.

Analysis

This is indeed a powerful argument because no country in world would oppose to the advocacy
of child right or would want to show promoting the child labour in its state. butpolicy of in er
waqy, cant it be interpreted as policy of developed country to restrict open market access on
products emanating from developing countries and make trade restrictive measures legitimate.
But the intervention need to protect the children, help them rather than taking away their way of
life. Instance can be taken of (SAHA CHALAK OF NEPAL). The linkage between child labour
and poverty is not seen by the moral argument. Won’t it make them engage in other works with
low wage if the products made from them are not bought in the market. The inter linkage
between the labour standard and economic condition of the country is undermined by the
argument. Economic growth and well being is the pre condition for trade restriction policies
implementation. Similarly family based work is matter of tradition and sociological fact of
developing country. They are integral part of our culture including the handicraft. Is this the
genuine concern for child or the political economic strategy of USA and European nation against
the availability of cheap labors in China is still question left unparalleled to assumption. Wont is
be throwing them from frying pan to the fire?

Is not is new form of protectionism?

With the primary motive as shown the protection and welfare does not the linkage camouflage
the intention of member country to establish legal trade restrictive practices?

The Impact of trade restriction on specialization and efficiency, import protection strategy, or is
this the outcome of lost cost import requirement of price adjustment? It has little to do with
social good. Trade competitive perspective rather than the social god can be concluded in this
ground.

WTO is actually a bid by industrial nations to undermine the comparative advantage of lower
wage trading partners.

 ILO structure that includes representatives from government, labour and business is problematic
as it does not match the structure of world trade organization.

The imposition of labor standards that are too high (e.g., minimum living wages that are set
above the level of labor productivity) will push more workers out of the “formal” sector (which
tries to abide by them) and into the “informal” sector, thus exacerbating rather than diminishing
the existing inequality in terms of wages and working conditions within the developing
countries. By making the poor workers poorer, this policy will lead to a reduction of the true
(rather than official) average wage in the poor country – counter to the professed goal.1

Anti dumping measures… and use of it ….. describe it here

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:2

  -  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 compromise

Two ministerial meetings in Singapore and Seattle in 1996 and 1999, the debate of linkage
between labor and trade standard heated up. It would be a slippery slope to protectionism.

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:3

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.)

1
http://fordschool.umich.edu/rsie/workingpapers/Papers476-500/r499.pdf
2
https://www.wto.org/english/thewto_e/minist_e/min96_e/labstand.htm
3
https://fpif.org/wto_trade_labor_standards/
 2. Article XXIII on dumping is cited when contending that suppressed worker rights in
export industries constitute “social” dumping.

WTO does not have the competence to deal with labor standards. Developing countries contend
that:

1. The WTO is a commercial contract based on rules and disciplines governing commercial
activity and free and fair trade; it is not based on judgments about other aspects of
member states’ domestic policies, including worker rights and other nontrade issues. Its
rules aim to discipline the use of trade measures and reduce barriers to trade. Member
states are free to conduct their domestic policies in whatever way they see fit.

2. To introduce judgments about member countries’ domestic policy choices into the WTO
would fundamentally change the legal nature of the agreements. In this regard, Article
XX refers to the protection of conditions in the importing country. Introducing labor
standards would undermine existing rights, most notably negotiated rights to market
access, without introducing reciprocal obligations.

Arguments of advocate supporting the linkage

1. “Unfair” labor practices and conditions exist in many developing country trading
partners and need to be offset by appropriate trade policy measures in order to
“level the playing field.”4

2. Improve the working conditions and wages of workers in poor countries, thereby
reducing the wage differentials between rich and poor countries. They believe that
this will protect jobs of workers in the rich countries. The question is whether
working conditions in poor countries can be raised, and whether jobs of workers
in rich countries can be protected with the application of standards that are
designed and enforced by the rich countries.

Four broad questions have been raised inside and outside the WTO. 5(taken from wto
website)

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”)?

4
http://fordschool.umich.edu/rsie/workingpapers/Papers476-500/r499.pdf 4th reading
5
https://www.wto.org/english/thewto_e/whatis_e/tif_e/bey5_e.htm
 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?