U.S. trade negotiators have tabled a formal motion in GATT -- the General Agreement on Tariffs and Trade -- to have a working party consider whether workers' rights should be more explicitly recognized under the new GATT rules. This follows months of U.S. efforts right up to the ministerial level trade meeting at Punta del Este last year.
However, many governments, especially in the Third World, almost instinctively look upon such moves -- to influence labor policy through the leverage of trade -- as an attempt to bring about changes in their domestic policies by outside agencies. If this goes unchallenged, similar pressures, they fear, could be used to influence them in other policy areas as well.
Resistance to regulatory linkage between trade and workers' rights also stems from a strong suspicion that the real motive for the move is curbing competition from newly industrializing and other developing countries. The suspicion is not confined to the developing countries alone. A number of U.S. legislators perceive the provisions in the new trade bill before Congress -- to curb commerce with countries failing to recognize workers' rights -- as nothing short of "protectionism disguised as humanitarianism."
Safeguarding jobs goes with protection of markets. Domestic jobs are lost not merely when, due to foreign competition, production is curtailed and plants are closed within a country but also when companies go offshore. If companies in Europe or North America move their factories to Southeast Asia or Mexico, lured by the low labor costs there, then they will in fact be exporting jobs.
A hefty dose of workers' rights in these countries would make such conditions less attractive for these companies to move. The migrating jobs would thus be saved. Domestic groups in any country having a vested interest in protecting their markets and jobs may well be prepared to use humanitarian arguments to avoid threats of competition -- just as a country which finds itself vulnerable on the trade union or human rights issue would normally be averse to any attempts at linking trade to these rights. The present world economic environment -- tensions and mistrust among trading partners, with massive unemployment in a large number of them -- only exacerbates the situation.
But progress on linking trade and workers' rights is still possible if the method of approach is clear and consistent. It is hard, we must recognize, to impose enduring changes on domestic labor and social policies unless the country itself is convinced of the need for such changes and is genuinely committed to them. Pressure through external trade, especially if applied on a unilateral basis, as envisioned in the proposed U.S. trade bill, is rarely effective for this purpose. Free and open multilateral discussions, with no preconditions attached to them, are far more useful in the long run.
At the International Labor Conference in Geneva earlier this year, William Brock, the U.S. labor secretary, recognized that unilateral action in defining unfair labor practices and withholding trade benefits will encourage retaliation and result in trade restrictions among many countries. Developing countries, for their part, should be aware that if multilateral action totally fails, there will be, as Brock candidly pointed out, temptation to link workers' rights and trade through unilateral efforts.
Countries competing in an integrated world market are bound to think of their competitive edge while deciding on their social or labor policies. But this may not be a good enough reason why the trade-worker rights issue should be invoked only in the context of competitive advantage. Introducing the notion of competitive advantage has largely contributed to the suspicion that commercial interests rather than humanitarian considerations were the real motivation behind some of the past efforts.
A country may be guilty of flagrant violations of workers' rights, but may not, as a result of this, derive any competitive advantage in international trade; or the gains may not be easily measurable: What happens to workers' rights in such cases?
Workers' rights are a universal concept. Wage rates, on the other hand, vary between countries, depending primarily on domestic factors and circumstances. There may be legitimate differences in wage levels between industrial and labor-surplus developing countries even for the same industries -- textiles, leather goods, agricultural processing or whatever. If such wage differentials are confused with cases of real labor exploitation or used as a bogey to fuel protectionist trends, as has sometimes been done in the past, this will only derail the discussions on trade-worker rights issue.
Finally, the credibility of the rights issue will suffer if political considerations are too often allowed to interfere with them. Under the 1984 U.S. trade measure which made workers' rights a consideration in granting preferential trade benefits, the president was given the power to waive actions against workers' rights violations; and in most cases he used that power.
These reflections may sound more like negative injunctions -- in the form of "don'ts" -- but they should help clear the decks.
A key issue, however, will still remain to be addressed. There are, roughly speaking, more than 1.1 billion unprotected workers in the Third World, representing around 77 percent of its total labor force. From the enforcement point of view, the sheer pressure of these vast masses, other difficulties apart, will make it nearly impossible for the Third World governments to apply effectively a highly preferential labor policy for the trade sector without raising conditions in the others. And if by some miracle this can be done, it surely will add to social tension and unrest throughout these countries.
Efforts to include in future trade agreements a workers' rights provision will thus need to be supported by parallel action to improve the conditions of all unprotected workers. Part of the funds resulting from the granting of trade benefits and additional aid resources could possibly be used for this purpose. At the international level, this will entail sustained and concerted work by the International Labor Organization, GATT and the various development funding agencies, notably the World Bank.
The writer, who has served for many years as a senior director in the International Labor Organization and other U.N. bodies, is coordinator of the North-South committee in Switzerland.