The WTO and the ILO: Considerations for the US Fast Track Debate

 
In the months leading up to the Doha, Qatar Ministerial Meeting of the WTO in November, certain items make an interesting comparison to the current debate in the US Congress over Trade Promotion Authority. Labor and environmental issues have assumed a prominent role in the accelerating discussions over providing the Bush administration with "fast track." Many of the same issues affect the WTO. The BRIDGES Weekly Trade News Digest (June 26, 2001) has some interesting comments on the role of the International Labor Organization in the WTO process:

"On 19 June, after seven years of indecision, the International Labour Organization (ILO) agreed to take the lead in multilateral discussions over the social dimension of globalisation, which some believe may take the pressure off of the WTO on the issue of trade and labour.

The ILO's existing Working Party on the Social Dimension of Globalisation -- which includes representatives from government, employer groups, and labour unions -- has agreed to boost its mandate, commissioning the ILO's Director-General Juan Somavia to prepare an authoritative and comprehensive report on "the social dimension of globalisation, particularly the interaction between the global economy and the world of work." The Working Party avoided the specific mention of trade and labour, but details of the mandate, composition of the commission, and funding are expected to be approved at the next ILO Governing Body meeting in November.

Commenting on the ILO initiative, EU Ambassador Carlo Trojan said the report could provide a politically acceptable solution for both advocates and opponents of the trade and labour linkage. He declared that if the report is done properly, "there is no particular reason why we have to deal with this in a new round of negotiations in the WTO."

For their part, several developing country diplomats welcomed the ILO's plan on the condition that labour standards are not used for protectionist purposes. According to one Cuban official addressing the ILO meeting on behalf of the G77/China, "labour standards must not be used as trade barriers to their exports and (for) competitive advantage." And in a strongly worded statement to the ILO delegation, Pakistani Ambassador Munir Akram reiterated his country's position on the relationship between trade and labour. "[Labour] has never has been in the WTO and never will be in the WTO," Akram said.

However, some developing countries -- Brazil for instance -- were not as dismissive as Pakistan, and took the view that the discussion on the social dimensions of globalisation should be broadened to include dimensions other than the negative effects of trade liberalisation. According to Brazil, the discussion should also be concerned with the impact of trade protectionism and cross-border financial flows on employment and social development.

The preparation of the report, intended to take two years, is expected to include input from the secretariats of other international organisations, including the WTO.

Trade and labour at the WTO

In the final Declaration of the 1996 Singapore Ministerial Conference, WTO Members agreed that the ILO was the competent body for setting and dealing with core labour standards and trade. The decision was meant to assuage a standing dispute among developed and developing countries members over whether the issue of labour should be on the WTO's work agenda.

Despite this decision, the labour-trade debate has continued to be a contentious feature of the multilateral trade system. The issue came to the fore during the failed 1999 Seattle Ministerial Conference, when then-US President Bill Clinton suggested linking labour standards to trade sanctions. In the lead-up to the Doha Ministerial Conference, unresolved debates over whether to include labour and environment standards in the WTO have re-emerged.

For his part, US Trade Representative Robert Zoellick has made it clear that to obtain domestic and Congressional support for a new round of multilateral trade negotiations and for 'trade promotion authority' -- formerly 'fast-track' -- the labour and trade issue will have to be addressed in some form."

This turn of events bolsters the Bush administration's view that the best strategy for addressing labor and trade is a basket approach which includes both carrots and sticks but not direct trade sanctions. This approach has been rejected by the AFL-CIO and many environmental, developmental and human rights NGOs, as well as the Citizens Trade Campaign of the Global Trade Watch. However, many of these groups consider the fact that the AFL-CIO didn't block the ILO move as undermining these efforts to hang tough on the FTAA and fast track. The ILO/WTO relationship will be interesting to watch as we assess the current trade debate in Congress.