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DEVELOPING NATIONS REJECT LABOUR ISSUES IN WTO

by Chakravarthi Raghavan


Seattle, 1 Dec 99 -- Key developing nations, with some differing agendas for any new round, joined together at the plenary sessions of the WTO to reject efforts of the US and EU to bring the labour standards issue into the WTO.

Brazil, India and Hong Kong China were among those who spoke up clearly and firmly.

Brazil's Felipe Lampreia was caustic to the point of being politely acidic, in noting that developing countries were still exporters of agricultural products and raw materials, and accounted for a very small percentage of the trade in manufactures. Yet they were being accused of causing unemployment and lowering of labour earnings and standards in the North, through their exports, and sought to be kept out by a variety of instruments -- ranging from high tariffs in the industrial world on agricultural imports, subsidized exports, and new demands for trade-linked labour standards and trade-linked environment standards.

They must be seen for what they are: protectionist instruments.

Brazil insisted on a mandate for further negotiations in agriculture that would ensure elimination of export subsidies, domestic support in various guises, and high tariffs to keep out imports. In essence, Brazil wanted both industrial and agricultural products and sectors treated alike by the trading system.

India's Murasoli Maran said that while India was committed to observance of labour standards, had ratified most of the ILO conventions, and cherished all the values of democracy, workers' rights and good governance, these issues were not under the purview of the WTO. At Singapore, once and for all, the WTO Ministerial had decided that labour related issues belonged to the ILO, and "India resolutely rejects renewed attempts to introduce these in the WTO in one form or another. Any further move will cause deep divisions and distrust that can only harm the formation of a consensus on our future work programme."

As for NGOs and the keen interest of international civil society in WTO activities, while these have a vital role to play in any democratic polity, said Maran, "it is really for national governments to deal with civil society within their domestic domain. The responsibility cannot be and should not be transferred to the WTO. What we can and should do is to spread greater global awareness about WTO's activities."

Earlier, Maran stressed that it was India's assessment that the Uruguay Round agreements had not served all of the membership well, that there were critical gaps that need to be urgently addressed, that the asymmetries and inequities in several of them (anti-dumping, subsidies, intellectual property, TRIMS and non-realization of expected benefits from agriculture and textiles during implementation) need to be corrected. This was the reason for many developing countries highlighting the implementation issues and concerns. But some (referring to the US and the EU) had avoided substantive engagement in finding solutions on the plea that these would involve renegotiations. "This is a disturbing signal" and only by addressing them up-front would it ensure an image of fairness and equity to the WTO. And economic integration cannot advance if interests of the poor are left behind.

While holding out a carrot (to the US) of "examining in a constructive role" e-commerce and information technology in the development process, Maran rejected directly or implicitly some of the demands of the US and EU on new issues. He insisted that the developed countries should eliminate export subsidies and other trade-distortive support. At the same time, future agricultural negotiations should not limit flexibility of large rural agrarian economies to support and protect domestic production so as to achieve objectives of food security and rural employment. And while India was open to foreign investment, it did not subscribe to the view that a multilateral framework of rules on investment was either necessary or desirable.

Hong Kong China warned that the labour standards issue had the potential to polarize the WTO and could do irreparable damage. As decided at Singapore, the ILO was the competent body to deal with labour issues, and the WTO's support to raising living standards could only be indirect by raising prosperity of people everywhere through increased trade. That could be the only relationship between trade and labour standards. The WTO should concentrate on its core business of progressive multilateral trade liberalization and leave labour standards to the ILO.

Earlier, Hong Kong China drew attention to the statement of the International Textiles and Clothing Bureau which had made "painfully clear" that the progressive liberalization promised had not been delivered. "Developed countries would face an uphill task in carrying the developing world with them into a new Round so long as they are seen as so begrudging in liberalizing one of the few areas in which poorer countries enjoy comparative advantage, and which, contrary to the norms of the multilateral trading system, have been restrained by quotas for 40 years already."

Singapore said, in a somewhat ambiguous presentation, that for developing countries to discuss the relationship between trade on the one hand, and good governance, environmental protection and core labour standards on the other, these were viewed with mixed feelings. All of them desired good governance, environmental protection and core labour standards. "But it cannot be those who live far away care more for these issues than we ourselves do. The key is to see clearly the motivations behind the proposals. Where the motivations are protectionist, let us recognize them for what they are. Where the motivations are well-intentioned we should in our own interest listen carefully and adjust our policies."

In supporting 'comprehensive' negotiations, Singapore argued that for some sectors in developed countries there were strong domestic pressures to protect inefficiencies. This was a political fact that could not be ignored. For this reason, it was important that the new round be broad-based enough for each country to make necessary internal trade-offs, and each country must be able to garner enough supporters for trade liberalization. But the call for 'comprehensiveness' should not be a cynical way to prolong the negotiations and delay the opening up of politically-sensitive sectors.

But Singapore did not even address the fact that several new sectors were introduced into the Uruguay Round, on the same argument of trade-offs (and Singapore had sold this idea in 1986 to the ASEAN summit in Tokyo and split the developing country group), to enable the North to liberalize the textiles and clothing sectors and agriculture, with mandated future negotiations, but without achieving any benefits for the developing world. And now developing nations were being asked to do more to provide trade-offs so that the developed nations could carry out their earlier commitments. (SUNS4564)

The above article first appeared in the South-North Development Monitor (SUNS) of which Chakravarthi Raghavan is the Chief Editor.

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