8:06 AM Feb 8, 1996
INDIA: INTERNATIONAL FUND FOR LABOUR STANDARDS MOOTEDNew Delhi 8 Feb (TWN/Mahesh Prasad) -- The establishment of an International Labour Fund or facility to assist developing nations to achieve higher and desirably labour standards and play their role in global free trade has been suggested by a government-appointed Commission in India. "India should suggest that if the developed countries insist on certain hard and costly labour standards urgently, they should share the costs of upholding those standards in the affected country," the Commission's report says. The Commission, headed by a former Commerce Minister, Dr. Subramanian Swamy, was set up by the Narasimha Rao government in the wake of the Uruguay Round agreements and the demand voiced by the United States and some other Northern governments on a trade-social clause link. Dr. Swamy, who has now submitted to the government the 1000-page report of his Commission, in briefing pressmen on the report, said: "While we should strive to prevent any linkage between trade and labour standards in the WTO charter, yet if a linkage cannot be avoided, some principles on sanctions should be insisted upon." "Intervention, if called for, should be multilateral; there should be a menu of potential responses to perceived labour standards abuses, and finally pragmatism rather than dogmatism govern the decisions whether to intervene and, if so, how." The report underlined that the objective of the "US-led coalition" had the potential of frustrating the essential purpose of providing an overall framework of liberal trade rules in the WTO and instead encourage protectionist misuse of trade rules. "But even the hardline US positions would find it difficult to deny these principles," the report said. The social clause, the commission report said, "also has the potential of resurrecting in trade the North-South divide that afflicted the world economy in the late 1970s." "Central to the question of a social clause is the notice that competitive advantage is 'illegitimate'... In particular it (the social clause idea) says, if labour standards are lower and unacceptable morally, then the resulting competition is illegitimate and 'unfair'." Referring to the argument about slavery and slave-labour (put forward by proponents of the social clause), the report points out that there was "nearly universal agreement" against slavery. "But, universally condemned practices (such as slavery) are rare indeed," the Commission says, adding that the ILO has many Conventions that many nations have signed, but many in effect, are not binding. "The United States itself has signed no more than a tiny fraction of these Conventions and has ratified only eleven ILO Conventions , while India has ratified 36." Dr. Swamy said his Commission "is, however, against any 'brittle' or 'unthinking, unsophisticated' opposition to the social clause, which would be self-defeating as happened on the Intellectual Property Rights question." "While we should strive to prevent any linkage between trade and labour standards in the charter of the WTO, yet if linkage cannot be avoided, some principles on sanctions should be insisted upon; intervention, if called for, should be multilateral; there should be a menu of potential responses to perceived labour standards abuses; and finally pragmatism rather than dogmatism govern the decisions whether to intervene, and if so, how." The Commission says: "the linkage of labour standards in international commerce is an inevitable bitter pill that we may have sooner or later to swallow. The question is how to formulate a strategy to define its scope, minimise its side effects, and how to facilitate its painless implementation. Some of the labour standards are worthy of adherence on our own, such as abolition of child labour. We need a definite plan of action for that." India, the Commission says, "should suggest that if the developed countries insist on certain hard and costly labour standards urgently, they share the costs of upholding those standards in the affected country. An International Labour Fund or social facility should be set up and financed by developed countries to achieve higher and desirable labour standards and their role in global free trade should assess the need for action, what actions should be taken, and how, by whom they should be monitored and implemented." In his statement to the press, Dr. Subramanian Swamy said: "It is without doubt, in the view of the Commission, that the rationale for international labour standards turn on its positive implications for sustaining high levels of global economic growth over the long term. "Democratic and social justice enhance the economic growth potential of market-oriented trading system; therefore the global trading system must strive to eliminate unfair competition based on exploitation of people. In this sense, global labour standards are important for ensuring equity in the new global order." The statement added: "Therefore the Commission recommends that rather than a flat rejection or a complete surrender on the linkage between labour standards and trade privileges, the government should pursue a middle path, seeking to modify the developed countries' approach. India should lead in this." The statement quotes the Indian Prime Minister, Mr. Narasimha Rao, as correcting stating that raising labour standards is as much the concern of the developed countries that are keen for foreign investments abroad, as it is for the developing countries, since skilled labour can thrive when labour standards are prevalent. "We need not take pride in our low cost and cheap labour or hope to profit from it in trade, because that is illusory." The major portion of the Swamy report and his statement is devoted to what India should do to eliminate the scourge of child labour. Dr. Swamy's statement says: "It is to be borne in mind that in a federal democracy like India and in relation to the problem that is rooted in social tradition and economic compulsion, the elimination of child labour cannot be stopped through coercive measures. "It can be reduced and progressively eliminated through conscience-raising, provision of socio-economic infrastructure for the poor in villages, and in urban areas, a system of disincentives against employers, and most of all, welfare and rehabilitation measures for children. It also requires full international cooperation in terms of expertise and funding."