G7 BACKS "CORE LABOUR STANDARDS"
(Third World Economics, 1-15 April 1996)
PARIS: The Group of Seven (G7) rich nations have defied the warnings of Japan and lined themselves up for a battle with the developing world, and particularly the rest of Asia by singling out the need for improving core labour standards worldwide.
Japan, backed by Britain, had warned against overstressing the need for core labour standards on issues like child and forced labour, trade union rights and discrimination at the G7 Ministerial meeting on jobs in Lille, France, which ended on 2 April.
They succeeded in toning down French demands for a stronger line from the G7 - for the seven to take the issue to the World Trade Organization (WTO) Ministerial meeting in Singapore in December.
Instead the final statement only "noted the importance of enhancing core labour standards worldwide and examining the links between these standards and appropriate fora."
But US Labour Secretary Robert Reich left the door open for an independent intervention on core labour standards at the Singapore meet. He made it clear in Lille that he regarded the WTO as exactly the kind of "appropriate fora" for discussion of items like "labour standards that cover trade union freedoms, prevent the employment of children and ban forced labour."
"Progress has been step by step... but there has been progress when you think that in Marrakesh, even putting such words into a statement was difficult," European Union (EU) Finance Commissioner Yves - Thibault de Silguy told reporters in Lille.
Japan and Britain warn that linking trade with labour standards would amount to disguised protectionism. Repeated calls from the US and international labour groups for the inclusion of a so-called 'social clause' in the WTO have run into fierce opposition from developing countries.
Asian trade officials say any such link would be used by protectionist forces in the West to keep out competing goods from the developing world.
The G7 comprises Canada, Britain, France, Italy, Germany, Japan and the United States.
G7 Ministers agreed to wait for the results of a study being made by the Organization for Economic Cooperation and Development (OECD) and the International Labour Organization (ILO) on the social consequences of changes in world trade.
The ILO Director-General Michael Hansenne had presented a paper calling for concerted macro-economic policies to promote growth and employment, and arguing that neither trade with the South nor labour market rigidity and social standards in the North were really responsible for the high unemployment.
But with the G7 Finance Ministers pulling out of the Lille meeting, the maclo-economic policies of the G7 and their responsibility for high unemployment gave way to the labour standards of the South and labour market flexibility in the North, ducking the real issues of faster growth to cut unemployment.
But OECD Secretary-General Jean Claude Paye said on 1 April that the still unfinished study had not found any significant unfair competitive advantage arising from failure to respect minimum labour standards, at least not enough to justify sanctions.
The EU, which ran into heavy fire on this issue at the Euro-Asia summit in Bangkok in March, was determined to avoid charges of covert protectionism in its comments at Lille.
"Incentives rather than sanctions"
Social Affairs Commissioner Padraig Flynn said the EU should seek "incentives rather than sanctions" to encourage developing nations to respect labour standards. "We don't want protectionism of any kind and we don't want any imposition of Western or European standards across the board," he told the Lille meeting.
The EU has struggled to add a so called 'social clause' to its own core Maastricht Treaty, an addition which is opposed by Britain. The EU, hoping to defuse the debate, has said that it has "no agenda for depriving low-wage countries of their legitimate economic advantage."
"In those international forums where the subject is currently under discussion, the view is gaining ground that this is not a protectionist gambit," EU officials said in Brussels.
However, Commission trade ufficials argue that some practices such as preventing freedom of association and using forced labour cannot be justified in terms of the level of economic development in developing nations.
The International Confederation of Free Trade Unions (ICFTU) says the WTO should link trade to five basic social standards: the freedom of association, the prohibition on the use of child labour and forced labour, the right to organize and bargain collectively and non-discrimination.
Asian trade experts insist that the subject is best handled by the ILO. They also argue that the best way to better working conditions is through development aid rather than trade sanctions.
European Trade Commissioner Sir Leon Brittan has denied claims that the EU is trying to impose minimum social standards on the South.
"Europe has no intention of trying to enforce a social diktat on the rest of the world," Brittan insisted, adding that instead of trying to impose Western codes of behaviour on the WTO agenda, all trading nations should agree to look into the question at the meeting in Singapore.
"We hope that through discussion and cooperation, we can play a constructive role in improving social standards in such countries," Brittan said.
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