6:08 AM Jun 9, 1994


Geneva 9 June (Chakravarthi Raghavan) -- The United States brought to the International Labour Organization Thursday its battle to link trade and labour standards in the World Trade Organization.

The US Secretary of Labour, Robert B. Reich speaking at the plenary session of the 75th International Labour Conference claimed that the issue of international labour standards had gained "an extra degree of salience, symbolized by the recognition at Marrakesh that labour standards must be taken into account in formulating the work for the new World Trade Organization".

"We have advanced beyond the conceptual gridlock that plagued the international community for so long," Reich declared, adding: "few are willing to argue openly that labour standards, however egregious, are strictly internal affairs. Nor are there many candid advocates for the opposite extreme that standards must be identical in every country. We have achieved that essential prerequisite to agreement -- a consensus to look to the middle ground."

But despite Reich's claim, the Marrakesh meeting closing the Uruguay Round negotiations and establishing a Preparatory Committee for the WTO was unable to reach any such agreement. The United States and a few others raised the issue of trade and labour standard linkages, but were vehemently opposed by others including many developing countries.

In his concluding remarks, the Chairman of the Marrakesh meeting, Uruguay Foreign Minister Sergio Abreu Bonilla listed over a dozen issues raised by various Ministers in their speeches and said that a function of the WTO preparatory committee (which would take decisions by consensus) would be to discuss suggestions for inclusion of additional items in the agenda of the WTO's work programme.

The US and France are reportedly joining forces in their attempts to raise the issue, which is viewed by developing countries as an attempt to forge new protectionist instruments for post-2005 when the MFA restrictions have to be dismantled under the WTO.

Reich insisted on the "legitimacy" of defining some "absolute standards" to which every country was expected to hew. Any list of core labour standards, he said, should include gods produced by prison or salve labour, some forms of child labour.

Beyond a "short list" of core labour standards, judgements "must become more conditional" and the international community should not attempt to dictate levels of working hours, minimum wages, benefits or health and safety standards uniformly matching those of the US and other industrialized nations.

He saw merit in the belief that developing countries must grow richer to improve living and working conditions, and that they must trade to grow richer. This observation, he added, implicitly acknowledged that standards should not be static and that a country's ability to offer its citizens better working lives rose with development and international expectations might properly rise as well.

By listing, but not defining the "core" labour standards, and staking out a claim for international expectations on increasing labour standards in developing countries, Reich laid out a justification for future trade restrictions by saying: "If a country pursues policies that hold down living standards and limit to a narrow elite the benefits of trade, the promise of open commerce is perverted and drained of its rationale".

The US labour secretary then went to suggest democratic institutions and trends as the criteria by which the international community should focus attention on the legitimate right to expect rising labour conditions to accompany third world growth.

Where there were reasonably robust democratic institutions, it could be presumed that the labour conditions reflected what a country could afford, given its level of development. Where democratic institutions were absent trends of low-wage workers becoming better off as trade and investment boosted national income, and the narrowing of the rich-poor gap could be used.

It was preferable for any intervention to be authorized and implemented multilaterally to exploit the expertise of global organizations. There must be a menu of potential responses to labour-standards abuses, varying on nature and severity of their effects. The range could include technical assistance to clear the path to improve, 'sunshine' provisions to highlight abuses, ineligibility for international grants and loan programs and "targeted trade measures".

There should also be "pragmatism" so that intervention would bring about change in the offending nations and not losing sight of the fact that trade itself could be a catalyst for progressive change.

Earlier, Reich said the Clinton administration would pursue ratification of major ILO conventions, but mentioned only the relatively innocuous Convention No 150 as the one that he had recommended the President seek Senate ratifications. Reich also said that the administration was engaged in tripartite discussions on Convention 111 -- the 1958 Discrimination (Employment and Occupation) Convention.

The US has the lowest track record in terms of accession to ILO conventions -- and is not party to any of the basic or core conventions nor those of such global importance as the 1990 Chemicals convention or the 1993 one about prevention of Major Industrial Accident Convention -- agreed to at the ILO in the aftermath of the Bhopal disaster in India in the US Transnational Chemical Company, Union Carbide's plant in that city.