The European Commission has called for the issue of animal welfare to be raised in negotiations on agriculture under the auspices of the world Trade Organization (WTO). In a proposal to the WTO, the commission said there was an urgent need to develop an approach compatible with both, animal welfare and trade liberalization. It said the objectives of the European Community were to ensure that trade does not undermine efforts to improve animal welfare.

The proposal suggested a basis for negotiations and a possible range of actions. It also stressed the EC’s concern to ensure that the WTO members who apply high animal welfare standards should be allowed to keep them. The issue of linking environment and labour standards with trade has not yet been resolved equitably among all WTO members, and now animal welfare has been added to the menu.

As far as animal welfare is concerned, animal welfare activists have been at all environmental meetings at the world trade fora, demanding for linkages with trade since a long time. If the movement to link it with trade is not successful, there have been the adverse effects of negative publicity and consumer boycotts. The latest in India was the case of animals, when being taken to the slaughterhouses.

The US NGO, People for Ethical Treatment of Animals (PETA) carried a worldwide campaign against the use of leather sourced cruelly from cows in India, since February this year. The second largest US clothing retailer, Gap Inc. and its subsidiaries, Old Navy and Banana republic, they already promised PETA that they are stopping the use of Indian leather. After causing Indian exports losses worth millions of dollars and sullying the reputation of the $2.5 billion leather industry, PETA has suspended its anti-leather campaign. Also it is now shifting focus to a tourist boycott of Tamil Nadu simply because the leather industry is based there!

Now PETA has launched a campaign against milk, saying that it causes prostrate cancer.

In future, gender, and human rights activists will also push for linking trade with their concerns. Therefore if all such issues continue to occupy the centre stage, and social activists continue to demand that the WTO be the ultimate arbiter for all ‘trade-related’ issues, it will then perhaps become the WESO, i.e. World Economic and Social Organisation.

The issue of linking trade with either labour standards or with environmental standards has been occupying the centre stage ever since the WTO came into being in 1994. It has further divided the rich North and the poor South. The tragedy is compounded by the fact that it is a one-way street i.e. the rich North is the demander and the poor South the defender. Inherently it is inequitable because the South cannot invoke any such ground to propose or justify trade measures, sheerly because it cannot afford to. It needs trade and investment to achieve economic growth, create more jobs and get their people out of poverty.

__________________________________________________________________________

One of the causes for the failure of the Seattle Ministerial Conference of the World Trade Organisation, was a polarized position of the North and South on the issue of incorporating labour and environment standards into trade accords. This state of opposition and conflict is the single most important challenge to the multilateral trading system. The concerns of Governments, cross section of civil society groups and more importantly the concerned strata of the society, viz. parents of working children, unorganised labour, etc. who are going to be impacted by the consequences; need to be answered. More so, analytical work is required in order to explore related issues intensively from the viewpoint of trade sanctions, accommodating the equity and sustainability perspective.

The CUTS Centre for International Trade, Economics and Environment proposes to examine to issue of labour and environment standards from the perspective of trade sanctions in international trade. The focus of this programme is to facilitate effective evidence-based dialogue in order to help both the camps of the linkages debate to understand each other’s positions better. The labour and environment standards will be studied intensively from different perspectives, taking into account the complex socio-cultural and economic issues that are currently not reflected adequately in the ongoing debate on linkages. The goal is to contribute to reducing the heat and tension with the hope that the problems are addressed in fair and equitable manner corresponding to different levels of development.

Tighter regulation, more so, in developed countries, is leading to the dumping of such substances and dirty technologies worldwide

Dirty and outdated technologies are generally tied with the FDI entering countries or to the aid that poor countries receive

High costs associated with inventing new technologies force host countries to accept outdated technologies that suit their demand for the time being

Ignorance about the existence of new cost efficient and environment friendly technologies are an important factor for the entry of old and dirty technologies

At times developing and poor countries have to accept FDI in the form of dirty industries to create jobs and reduce high unemployment

Cost of regulation, lack of transparency are important factors that are handicaps for poor countries

2. Tariff Escalation and Peaks

Objective: To analyse the relationship between tariff escalation, tariff peaks and environment and development issues.

Tariff escalation acts as a tax on development by discriminating against developing countries' processed goods

Similarly, tariff peaks operate in many areas of interest to developing countries, particularly agricultural products, thereby leading to unsustainable use of resources in developed world

Tariffs, as well as the rate of tariff escalation, have been reduced in the Uruguay Round, but is still a problem for developing country exports.

Possible environmental effects include: increased transport costs, misallocation of resources, leading to wasteful production, poor technology usage delaying adoption of greener technology and hampering industrialisation in developing countries.

Objective: To analyze the demand for sustainable consumption and production patterns in the context of demand for ecofriendly production, trade and consumption, in three developed and developing countries.

The South is expected to adopt production standards of the North without having adequate resources of all forms to implement the same

Standards pertaining to sustainable consumption and production that suit consumption and production patterns of the North are being popularised and thrust on the South.

Political, economic and social conditions are important ingredients that decide whether production and consumption standards followed by a particular region are sustainable or not

Lack of effective participation of developing countries in standard setting bodies does not allow them to influence discussions on these issues

Policy effectiveness vis-à-vis existing policies is a big hurdle countries face in implementing standards

Objective: To analyse core labour standards and their genesis, development and current place in the context of political economy.

Core labour standards are not being implemented properly in developing countries, which give them a competitive advantage in exports

Linking trade and labour standards with the WTO framework has the potential of being used as a protectionist device against exports from poor to rich countries

The monitoring mechanism in the ILO is inadequate for ensuring compliance of a country’s obligations under the ILO Conventions

Worker productivity varies from country to country hence implementation of common standards needs a sound logic

Labour markets are inflexible in the North and the immigration laws act as a barrier to movement of labour

Trade unions in the world and countries are divided over the issue of linking labour standards with trade at the WTO

Objective: To study the issue of child labour in South Asia with the perspective that whether trade sanctions are part of legitimate instruments for the eradication of child labour.

Economic compulsion (poverty) forces children to work rather than go to school

Differential/lower wage levels exist for child labour as compared to adult labour

While children are abused in the poor countries by making them work etc, in rich countries children are victims of negligence and social disarray caused by an increasing consumer culture

In many occupations such as gem cutting or fisheries or agriculture, vocational training starts at an early age

Objective: To study the behaviour of consumers from the viewpoint of efficacy of the implementation of the existing laws/conventions/voluntary initiatives vis a vis labour rights/ standards in both developed and developing countries.

Do consumers give consideration to condition of labour when they choose a product

Labour standards are poorly implemented it may reflect in the market value of a product .

Consumers in the rich countries have boycotted goods exported from poor countries, which were allegedly made by exploited/abused labour.

Other than boycott, there are other initiatives for fair trading, codes of conduct etc, which are brought to bear on developing country suppliers as well as the well known companies in the North.

US Trade Act to Enforce Child Labour

US President Bill Clinton has included an important amendment in the Trade and Development Act of 2000 that requires trading partners to meet and effectively enforce international standards to eliminate the worse forms of child labour. The amendment requires beneficiaries of US trade preferences to meet and effectively enforce the standards established by the ILO Convention 182 on the worse forms of child labour. With the President’s signature on May 18, ILO Convention 182 has now been codified in the US Trade Law. For the first time, a country’s progress on eliminating the worse forms of child labour will be a condition to US trade benefits. (Source: Child Labour News Service, June 1, 2000)

Swedish Dads Urged To Take Time Off For Their Children

An extra benefit incentive is being offered to get fathers play a fuller part in child cares. In a country where equality between the sexes has long held a key position in the political debate and where the percentage of women in the workforce is among the highest in the world, traditional roles for childcare have changed. Now the Social Democratic Government plans to introduce legislation aimed at persuading men to spend more time with their children. A manager of a team of 12 assistant radar designers recounts "I didn’t get to know my father until I was ten. He worked late in the week and was too tired at the weekends". (Source: Financial Times, June 23, 2000)

A study by the Organization for Economic Co-operation and Development (OECD) finds that trade bans are unlikely to cause countries to raise labour standards unless they allow unions to operate freely. The study also says that subsidizing the families of child labourers to keep children in school is more effective than trade sanctions in eradicating exploitative child labour. The unpublished study reaffirms the findings of a 1996 OECD report that low core labour standards do not give countries an export advantage and dismisses fears that companies will trigger a "race to the bottom" in labour standards by cutting employees benefits. Fierce international competition will deter, rather than encourage, such practices. It argues, "competition is forcing companies increasingly to focus on activities that require highly skilled employees and modern infrastructure". (Source: Financial Times, June 27, 2000)

Mcdonald’s Employing Child Labour To Produce Toys

Children as young as 14 were employed to make promotional toys for McDonald’s in sweatshop conditions in Southern China, according to local press reports. At City Toys Ltd., in Shajing in the special economic zone of Shenzhen, youngsters worked 16-hour days, seven days a week, earning 1.5 renmenbi an hour to produce Snoopy, Winnie the Pooh and Hello Kitty toys for McDonald’s, the South China Sunday Morning Post reported.

They slept on wooden beds without mattresses and shared a 18´ 27 sq. m. room with 15 others, costing them 60 renmenbi a month. Many youngsters also worked under forged identity documents. While they had one or two days off a month, they could not leave the district where the factory was located because they could not afford the 350 renmenbi permit required for them to stay in Shenzhen. (Source: Agence France-Presse, August 27, 2000)

The United Nations (UN) had proposed a project involving multinational corporations to promote healthy labour and environmental standards and equitable distribution of the benefits of globalization. The project, dubbed ‘Global Compact’ would make the corporations follow higher standards while tackling labour and environmental issues without which protectionist tendencies could increase putting globalization in a jeopardy, UN officials said. 44 corporations together with labour unions and environmental advocacy groups would meet to pledge their commitment to healthy labour, social and environmental standards.

Each company would be required to post its statement and practices on a UN website to which labour unions, environmental and human rights groups could correspond. The programme has been denounced by some human rights groups and environmentalists as an attempt to provide the UN umbrella to corporations to cleanse their image. (Source: Business Line, July 21, 2000)

Us Imposes Ban On Beedi Import From India

The US imposes a ban on importing beedis (Indian leaf rolled cigarettes) from Tamil Nadu, India on the ground that they were manufactured by child labour. A consignment which was shipped recently is yet to be cleared. Suspecting that the company had engaged child labour to roll the beedis, the US authorities had sent a fact-finding team to Tamil Nadu. The visiting team was told that beedi rolling was more of a family affair. Nnormally a contractor, awarded to manufacture certain quantum by the company, invariably engaged the services of several workers to roll them. The workers who were mostly elders rolled them at their houses and it was customary on the part of children to supplement their parents’ efforts. (Source: The Hindu, April 29, 2000)

A panel discussion was organized by CUTS Centre for International Trade, Economics and Environment (CITEE) on the sidelines of the World Social Summit for Development-5 on June 29, 2000 at the ILO building in Geneva.

The subject of the panel was: Labour Linkage from the Viewpoint of Trade Sanctions. The panel is part of a project on Linkages, which the CUTS-CITEE is implementing globally with a view to develop consensus on a contentious issue.

The project involves research on trade and labour, and trade and environment issues, along with meetings to discuss the research as well as current issues around the topics. In pursuance of this mandate, this was the third international meeting organised by CUTS-CITEE. The first was held at Seattle in December 1999, on the sidelines of the 3^rd WTO Ministerial Conference, while the second was held at Bangkok in February 2000 on the sidelines of the UNCTAD X meeting.

The third, and the meeting under this report, was held in the ILO building, Geneva with protagonists and antagonists participating in a very exciting debate. In as much as the venue was appropriate, the discussions were moderated by Tony Hill, Coordinator of UN Non-Government Liaison Service. He had moderated the last meeting at Bangkok thus bringing a good experience of the issues to the meeting.

Pradeep S Mehta, Secretary General CUTS, introduced the CUTS-CITEE’s Linkages project. He stressed that there is a need for better understanding of the issues at the domestic level, and that labour rights are promoted and protected in a manner that there is no ground for complaint. As far as the violations are concerned, these cannot be protected through the trade sanctions route, but the ILO, as the appropriate body, should evolve effective methods to address and deal with the violations. For example, Myanmar and China are countries where labour rights are not well respected.

Mehta pointed out that their project will try and promote a dialogue and pursue capacity building in the North so that there is less tension and the real issues do not get sidelined. He said that as a Southern NGO they have a natural bias against linking labour standards with trade as it has a clear protectionist potential. This bias is as natural as many from the civil society in the North who are genuinely concerned with poor labour standards and human right violations. But that happens through out the world. He threw open the discussions by raising two questions: (a) can there be global standards in view of varying levels of socio-economic development, differences in culture and other stands, and (b) what is the type and level of coherence we are looking for at the international level.

In opening the discussions, Tony Hill remarked that it is an appropriate debate and that there is a huge potential for misunderstanding in the present scenario. He felt that this debate has pitted people against people in this world, who do not otherwise mean any harm. No NGO in developing countries will actually defend child labour or other poor labour standards. Similarly there are no NGOs in the developed countries which want to use these issues for protectionist purposes.

Panellist, Peter Prove of the Lutheran World Federation, and an human rights activist felt that the controversy wouldn't have been there if we all understood each other. Labour rights are a subset of human rights. Any competitive advantage based on exploitation of human rights is bad and illegal, and should be condemned by all. It is good that the whole world comes to know of any gross violation of human rights in a country through good and quick information systems. Thus it ceases to be considered a domestic issue alone.

He stressed on integration of human rights in the international economic policy making, and not linkages. Linkages is not the way to accommodate human rights in economic law and policy. The support is for integration and not linkages. Prove criticised the lack of knowledge on human rights among the trade negotiators. Human rights principles should be known and should be the starting point for international policy decision making. It was said that trade and economic liberalization even for those who consider it good, is not the end; the end is promotion of human well being. When we see a regression in social standards, it is by definition a violation of human rights.

Interesting issues were brought forth from the floor in the discussion. The major issues highlighted are given below.

The issue of lack of trust in the WTO was brought forth by Hassan Adebayo Sunmonu, Secretary General of the Organisation of African Trade Union Unity, Accra. He said that the WTO is a non-transparent and undemocratic body. It does not have experience and moral authority like the ILO. The African countries have been too trusting, but they can not be deceived always. The North have double standards and thus Africa cannot trust it any longer. In the matter of labour standards too, African countries would like that the issue is discussed only at the ILO.

Another participant, Mr Raj Bhandari from Global Traders Conference, Geneva, remarked that the global economy is exploitative and after globalisation it is competitive. Improvement of labour standards and human rights should be done independently of the WTO’s dispute settlement system. The whole issue has to be examined in the historical perspective i.e. the issue of linking labour standards was never a part of the discussions in the Uruguay Round of the GATT. It cannot now become an issue for negotiations.

Brewster Grace of the Quakers Mission to the United Nations, Geneva, said: "This debate has gone far and studies are going on in the ILO on the impact of globalisation in various countries. There is a need to look beyond ILO and initiate dialogue at various levels. WTO should respect the right balance, balance of rights and obligations. Labour standards should not be dealt with under the WTO, until there is a proper balance".

Vinod Rege, international trade consultant and former GATT director, noted that not everyone is familiar with rules relating to human rights. It is humanly impossible for any negotiator to know everything about all issues. The issues are becoming important, but if they are to be discussed in relation to trade, then what will be the ideal way forward. There will be differences of opinion on the concept of integration and on the concept of linkages. Does integration mean greater degree of obligation? When one talks of linkages what should be the pattern and the relationship?

The outcome of the discussion can be summed up in the points mentioned below.

The global trading system is brutal, exploitative and competitive, and is not an expression of solidarity. Hence countries should intelligently decide their choices.

The whole issue of linkages and social obligations has to be examined in the context of a globalising economy, where so many other issues get intertwined.

The ILO is the best place to deal with the issue of labour standards and international trade, and not the WTO.

The WTO is non-transparent and not the appropriate body to deal with the issue of labour standards or any other non-trade issues. It neither has the mandate nor the experience.

Right to development is a part of the human rights framework. It is both an individual and collective right. The economic, social and cultural rights under the UN framework provide greater leverage to the right to develop.

No economy or country in the world can function in isolation, therefore tools have to be strengthened/discovered to protect the weaker economies.

In all poor countries resource constraints, and in rich countries greed and avarice influence the level of policy effectiveness.

 

PETA Unfairly Targets Leather Exporters: Punishing Peter for Paul’s Sins

By Joseph Vackayil

People for Ethical Treatment of Animals (PETA) has declared a unilateral truce on its war against Indian leather industry. To ensure ethical treatment for animals in India it has targeted the leather retail stores abroad and forced them through reportedly violent methods to stop buying goods from India. The target and methodology followed by the PETA activists are unethical viewed in the light of objective moral principles. PETA is celebrating its achievements of cowing down some of the major retail shops in the US and Europe. Losing the US market is an inestimable loss for the Indian leather industry. But PETA has failed to identify the real victims of its warfare. The big shopkeepers of the US and Europe have been sourcing footwear from Indian manufacturers neither for love of India nor of Indians. Business expediency warranted buying from India.

Comparable quality products were available from India at much cheaper rates than from Italy, Eastern Europe or Korea. They will not let go their Indian sources that fast. They will continue buying from Indian companies with just one condition: "do not use Indian leather". It is not a tough condition. Already most Indian shoe companies are importing semi-finished leather from the US and the other Western markets for making shoe uppers. They have been doing this for the simple reason that in India, they do not get good quality cow hides from which shoe uppers are made. The reason behind this is that good cows are not slaughtered in India. Those slaughtered are past their prime and unable to provide quality hides.

Nobody disputes the agonizing fact that in India, animals earmarked for slaughter are not treated properly. But they are treated far better than the Americans treated the Blacks just about 100 years ago. A low level of compensation, in the survival struggle in a poor country, is part of the development process. In India, we are not able to treat all our children the way children should be treated. However, India’s treatment is far better than it was a few decades ago. Things are changing. One should be grateful to PETA for urging us to go faster while realizing its unethical attack on the leather industry. Tanners are not butchers. Tanners should not be blamed for the cruelties of the butchers and transporters, or the inefficiency and lethargy of the law enforcement agencies.

PETA would have been more ethical if they had turned their attention to the unethical and cruel slaughterhouses, transporters of animals and violators of animal protection laws. PETA seems to have a hidden agenda to jeopardize the Indian leather industry and its growing export market by targeting the leather retail stores. Leather comes into the picture only when an animal is dead. In India, nobody kills an animal just because it had hide.

Letters to the Editor, Financial Times

(a) Social Clause is a Blind Alley

By Pradeep S Mehta

D.S. Hoskins argues (Letters, May 27) that not racism but the fear of cheap labour coming into the UK is worrying Britons. Rightly so, despite the fact that labour market flexibility demands the lowest costs to maintain competitiveness.

The matter demands a closer look from the ICFTU-led trade union brigade and the AFL-CIO bosses, so they can better understand the situation, rather than continuing to bray for a social clause in the WTO agreements which will deny the poor countries their chance of economic development.

Leading employment lawyers are advising UK companies to adopt techniques imported from the US for keeping unions out of the workplace before new trade union rights recognition came into force on June 6. The Trade Union Congress rightly criticized the initiative, but it should hit at the root of the problem: attack AFL-CIO for its tardy organization in the US, where only 12 percent of the workers are unionized. Their right to strike is also nullified by the right of employers to hire alternative workers.

Notwithstanding its failure to prevent the US Congress approving the China deal, the AFL-CIO needs to consider the problems workers will face in the sunset industries such as textiles and clothing in the US. Quite fairly Stephen Byers, UK trade and industry minister, decided not to intervene over the 60,000 job losses in the UK’s textile industry that resulted from Marks and Spencer buying clothes from overseas. After all, the quota ridden Agreement on Textiles and Clothing requires all wealthy countries to structurally adjust their textile industry so the more competitive developing countries can prosper. And when they prosper, their workers will, not through a social clause. (Source: Financial Times, June 3, 2000)

Human Rights at Work are a Building Block of Stability

By James Howard

Pradeep Mehta ("Social clause is a blind alley", letters, June 3) takes such wild and irrelevant pot-shots at trade unions that most of those attacks do not merit a response. However his unsupported assertion that developing countries and their workers would be losers if there were a way of ensuring respect for basic workers’ rights in the trading system needs rebutting. On the contrary, developing countries who want to protect the fundamental rights of workers and their families in a globalising world economy are precisely the ones that are suffering the most right now, as they face intensifying competition from all countries like China which violate all internationally recognized core labour standards.

That form of competition is a one-way race to the bottom. As Bill Jordan, the ICFTU general secretary, has noted, respect for fundamental human rights at work is a building block for long-term stability and sustainability of the world trading system.

Mr. Mehta would better be advised to turn his energies to helping achieve that objective, rather than casting aspirations on those who are trying to defend workers’ basic rights worldwide. Ironically, the country he writes from, India – where freedom of association is generally respected – will find it hardest to compete with trading rivals rather less scrupulous in their respect for their own citizens’ human rights at the work place.

Seminar on Linkages between Trade and Environment, Trade and Labour Standards, New Delhi, October 12, 2000

A seminar will be held in New Delhi on the issues related to linking trade with environment, and on trade and labour standards on October 12, 2000. Further information will be available on our website.

This is a strictly non-commercial and educational service for non-profit organisations and individuals.For subscription please write to cuts@cuts.org  or cuts@cuts.org