Documents menu

Linking labour rights to world trade: Trade or workers' rights?

By Radha d'Souza, 4 November 1997

Even as the world globalises, liberalises, and transforms itself into a level playing field for the unseen hand of the market, many a nook and corner of the society hitherto thought to be beyond the boundaries of global playing fields are increasingly brought within its ambit. Labour is one such issue. Labour has always had two faces. From its inception, capitalist enterprises have treated labour as a commodity to be bought and sold at the labour-market. Workers and their representatives on the other hand have sought to emphasis its human face - that the living and often wilful nature of this commodity is such that it cannot be reduced to yet another statistical table that can be monitored through monetarist regimes. The Philadelphia Declaration, the founding document of the International Labour Organisation states labour is not a commodity.

Is labour a commodity to be regulated by international trade regimes? Or, is it an issue for civil society to determine in accordance with national mandates? The question is fast becoming another contentious issue of our times. The WTO Ministerial meeting last December ended another round of sparring. The issue is should or should not labour standards be linked to international trade.

The December round ended in a draw. United States and Norway lead the team in favour of a trade linked social clause under the WTO regime. The developing countries had earlier vowed not to allow the issue to be included on the WTO agenda. The issue did find a place on the agenda at the ministerial conference, a score in favour of the United States. However the ministerial declaration did not go beyond stating "The International Labour Organisation (ILO) is the competent body to set and deal with these standards, and we affirm our support for its work in supporting them." A point in favour of the developing countries. With many more matches to watch in the coming two years leading up to the next ministerial meeting in 1998, it may be worthwhile to ask are we leveling the playing field or changing the rules of the game?

Much before the issue ever featured in the GATT negotiations, the United States was already imposing unilateral trade sanctions on what it considered 'social dumping'. Products made under repressive labour conditions amounted to social dumping. The developing countries cried foul - having agreed to intellectual property rights, technology clauses, investment liberalization, matters where the developed countries are stronger, imposing labour conditions they say is a non-tariff barrier and protectionism. There was no pretence on the part of governments during the acrimonious debates at the Ministerial conference. The issue of labour standards was clearly about trade and not any altruistic concerns about workers.

However there are many out there who believe something needs to be done if workers' conditions are to improve in a world increasingly dominated ledger balances and book keeping. If free trade is what is causing the deterioration in conditions of workers, something needs to be done to rein in free trade - and imposing labour standards could do just that according to them. There is unanimity on the meaning of labour standards, however. Labour standards are a core set of rights comprising of the right to organise, right to collective bargaining, non-discrimination in matters of employment, and abolition of certain gross forms of labour such as child labour and bonded labour. It does not include wages, and conditions of work. Wages and working conditions must be determined by markets. Labour rights are human rights issues and must be enforced by all 'civilised' nations - so the argument goes.

This distinction between labour rights and labour standards is based on the assumption, if labour rights exist, labour standards will follow - for workers will organise and tame the markets. Yet deregulation of labour markets has been an important feature of economic reforms everywhere. Trade union organisations are seen as cartels that dictate monopoly wage prices. In country after country, amendments to labour laws has been a critical part of the market deregulation policies. The World Bank thought the subject important enough to devote the 1996 World Development Report to the theme "Workers in a Global World".

Do labour rights then automatically lead to better labour standards? Conversely are the inhuman conditions of labour in countries a result of absence of labour rights?

Consider the present political crisis in S. Korea, caused by 350,000 workers going on strike. The dispute involves a new labour legislation that permits employers to lay-off workers more easily and introduces flexibility in employment. Consider the ECA in NZ which was also about labour market flexibility in hiring and firing. Did the NZ unions or the workers precipitate a political crisis as in Korea? Yet, the rights were all there in the law books - right to strike, right to organise ...

Consider again Indian labour laws, under which there is a statutory requirement, that companies employing more than 100 workers must apply to the government before laying off workers and the government must hear the workers and other parties before deciding the application; (incidentally a provision the World Bank has been pressuring the Indian government to do away with); where it is an 'unfair labour practice' for an employer not to bargain 'collectively and in good faith' with a trade union. Consider Taiwan, Singapore, and many Middle Eastern oil states, where despite repressive labour laws, wages have seen a steady rise. Consider Sri Lanka, and indeed many developed nations where despite legally recognised labour rights, workers' conditions have seen steady deterioration. Surely if ensuring worker rights results in better labour standards, the Indian worker should be at the top and the New Zealand worker at the bottom. The reality is quite the opposite.

The point is wages and working conditions are determined by factors that go beyond just one sector of national economy targeted under international trade regimes - export oriented manufacturing - for that is the only sector a trade related social clause deals with in an international trade regime. Wages and working conditions are determined by economic clout of nations, of which workers form one part. The economic clout of nations in turn depend on numerous factors, history being an important variant.

For most third world and developing countries their under-development is a result of the colonisation which altered irreversibly their relationship to the colonising nations. Such domination and dependency has continued in the post independence period for most countries through control over technology and capital. The Structural Adjustment Programs imposed on a number of countries include clauses requiring governments to cut down fiscal deficits, to expand export sectors, and to open up subsistence peasant based agriculture to international capital. Fiscal and monetary conditions strap governments from spending on social welfare health or education. These and other conditions drive subsistence farmers from land, technology costs see domestic industry shutting down and now when people try to survive by working in sweat shop conditions those too must be closed down due to fear of WTO trade sanctions.

The developed countries on the other hand enjoy global political clout to be able to exercise their domination in international trade and ensure at least some of the gains are returned to workers in developed societies to secure political stability.

Whereas within nations, workers may seek rights vis-a-vis their own national governments to a greater or lesser extent, at the international arena, the issue is one of allowing labour to become a tool in trade disputes between nations. From a democratic rights standpoint, incorporating labour rights into international trade regimes, limits the scope of labour within nations to influence their wages and conditions of work. It makes workers more vulnerable to the vagaries of international trade.

If the choice is between jobs and rights, people will choose jobs first. If the choice is between some wages or none at all, they will choose some wages. People will choose to live first for in their eyes only by living can they fight. Yet, rights are needed because it is right to have them, trade or no trade.

Radha D'Souza is a lawyer currently doing her PhD at the University of Auckland. As a member of Asia-Pacific Workers' Solidarity Links she is involved in the ongoing global campaign on the issue of "International Trade and Workers' Rights".