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Editor’s Note
Searching
a New Route
The issue of social clause was at its peak during the
Seattle WTO ministerial conference. The US with support from few other
countries tried to push labour standards into the agenda of WTO. The
Clinton administration never softened its stand on the issue of linkages
between trade and labour standards.
After failing to push forward its protectionist
agenda in the last WTO Ministerial, the US now is trying to search a new
route. Since the Seattle fiasco US has been continuously making efforts to
form bilateral and regional trading agreements with the provisions of
labour and environmental standards. The North American Free Trade
Agreement (NAFTA), which was signed in 1993, already has labour and
environment.
We have witnessed some such agreements after the
aborted Seattle Ministerial meeting. The US-Jordan bilateral trade
agreement also contains labour and environment. It has yet to get the
approval of US Congress. These two issues are also very much part of the
agenda of ongoing negotiations between Chile and US over a bilateral trade
agreement.
Negotiations are also going on to form a Free Trade
Area of Americas (FTAA), comprising 34 countries from Western Hemisphere.
Though US’s FTAA negotiating group on market access has not proposed to
include labour and environmental standards in it, the Canadian Prime
Minister has advocated for the same.
Where will all this lead to? The South has put
forward a very strong opposition to incorporation of labour standards in
the WTO, and if the see saw continues it will harm the multilateral
trading system immensely.
Pradeep
S Mehta
Secretary General
I.
Global Programme on Linkages: Ongoing Research Studies
US
Ban on India’s Ganesh Beedi: A Report of Field Survey
The
US has played the bully against Indian Beedis (an indigenous cigarette);
the sufferers are however children particularly girls of the poor Beedi
workers who are left with no option but to quit schools and earn their
livelihood in the wake of sanctions. A recent field survey conducted by
the CUTS Centre For International Trade, Economics and Environment (CITEE)
in the Beedi making areas of South India show that sanctions on Indian
Beedis have backfired and, the children who used to help their poor
parents in work at home are now worse off.
What
prompted the US administration to add the Indian Beedi manufacturer:
Mangalore Ganesh Beedi to the taboo list was a 60 minute TV programme on
the CBS TV channel, which showed how child labour was used in Beedi
manufacturing. Ironically,
experts say that children’s statements in Tamil quoted in the programme
were mistranslated and the facts were highly exaggerated.
Most of the Beedi workers families in India are poor and in
case of destitute families that children help their parents in their work
at home to ensure two square meals a day. Existence of hired child labour
in Mangalore Ganesh Beedi works was ruled out on the very next day of
telecast of the CBS programme by the chief labour official of Karnataka,
the southern Indian state in which the company is located. However the US
authorities never considered these facts.
An important feature of Beedi industry is that about 50 percent
(80 percent in case of Ganesh Beedi) of the labourers are household
workers. Women undertake Beedi making as household activity and in the
poorest families, children do help their parents in rolling related works
as the family incomes are very low.
It
is almost one year after imposition of sanctions that CITEE conducted a
field survey in order to find out whether the sanctions in any way have
helped in eradicating child labour from the Indian Beedi industry. The
survey indicates that after the sanctions the Beedi workers are getting
less work from Ganesh and have been forced to take work from other Beedi
companies, which pay far less than Ganesh.
In
the wake of reduced earnings, parents have been forced to pull their
children out of school and put them into Beedi making or other works.
The boys have chosen to polish boots, domestic home service, or
agarbatti manufacturing over Beedi rolling as they get higher wages there.
But the girls cannot do anything other then Beedi rolling, as they aren’t
able to go out of their homes (More than 80 percent of the Beedi workers
are from the highly conservative Muslim community).
The
survey further indicates that around 60 percent of the poor children who
used to help their parents also went to schools before the sanctions.
However after one year of the sanctions this number is not even one fourth
of the earlier. In case of girls, 90 percent of them have dropped out of
schools and helping their parents to earn enough for meeting the basic
needs or in some cases to arrange school fees for their younger siblings.
The
existence of child labour in the Beedi industry is closely linked with the
prevailing socio-economic situation and the choices before the poorer
sections in terms of economic and educational opportunities. Nevertheless
bans or sanctions on the product create serious threats to the survival of
the cottage industry and to the livelihoods of thousands engaged in it.
II.
News Roundup
1.
Developing
Countries Condemn Belgian Law.
At
the session of the WTO Committee on Technical Barriers to Trade (TBT), a
number of developing countries voiced serious concern over the
notification of a Belgian law that would create a label for goods and
services produced in a socially responsible fashion. According to the
Belgian submission, the draft legislation – which in its conceptual
stages – calls for a label that companies could affix to their products
if the latter meet criteria and standards recognised in particular by the
ILO.
Egypt, Hongkong-China, Brazil, India, Argentina,
Malaysia (on behalf of the ASEAN), and Pakistan were among those who
condemned the Belgian law.
“This would link the social concept to trade and
would be a burden for developing countries,” said the Egyptian delegate.
“The relationship between trade and core labour standards is out of the
WTO and should not be discussed here,” they said.
Malaysia said that the matter was a non-trade-related
issue that would restrict trade. “This is a matter for the ILO, not the
WTO and is disturbing even if it is a voluntary initiative,” the
Malaysian delegate argued. For its part Pakistan echoed that the issue did
not belong to WTO and requested that Belgium withdraw its legislation.
2.
Bush Shifts Stand on
Carbon Dioxide
The
US President said, he wouldn’t cap carbon dioxide and had made a mistake
calling it a pollutant. This turnaround will have broad ramifications. It
will undermine the Kyoto Protocol, a treaty designed to curb global
warming by cutting carbon-dioxide emissions. Domestically, the decision is
the first major issue on which Mr. Bush has veered away from his campaign
promises.
With
just 4 percent of the population of the globe, the US produces more than a
quarter of the total greenhouse gases that are responsible for raising the
temperature of the earth and inducing unexpected climate changes. This
shift in stand by the US has given a big jolt to the efforts to save the
planet.
It seems that environment protection is only a mouth-word for
developed countries. The 1997 Kyoto Protocol, which was signed by 100
countries, has so far been ratified by only 30 developing countries. No
industrial country has yet ratified it.
3.
PETA Drive Rubs Leather Sector
The campaign announced by the People for Ethical
Treatment of Animals (PETA) against the leather industry will not serve
any constructive purpose and will in turn jeopardise the initiatives taken
by the industry to prevent cruelty to animals, according to the Council
for Leather Exports (CLE).
Any agitation against domestic industry will have
serious implications on the livelihood of about 2.5 million people engaged
in the sector.
According to the CLE, the leather industry has taken
action since May 2000 to prevent cruelty to animals during transport and
slaughter. Irrespective of PETA’s decision to renew agitation, the
Council proposes to continue the animal welfare programme.
4.
Football’s Lost Generation
The growing popularity of football is fast transforming the sport
into a huge multi-billion dollar industry. It is also bringing millions of
young people around the world into contact with the charm of the game.
So strong and positive is the image of the glittering world of the
game that almost every kid who loves football in the developing world is
trying to travel to Europe to play professional football. But more often
than not, this dream ends up in frustration.
“The slave trade.” That is how Brazilian-born Pele, the man
widely acclaimed as the greatest football player of all times, describes
the poor treatment of kids under the age of 16 who are brought in from
Brazil, Argentina and many African countries as potential players in
Europe’s expensive leagues.
Painting a vivid picture of how the whole process begins, Pele says
agents go to parents and get their consent to bring 16 and 17 year olds to
Europe. Instant success is all they want from these teenagers so they can
sign them up with big clubs for big money. “The agents don’t want to
know, they drop them” if the kids are not making it big, Pele asserts.
The Soccer hero says the trade is already so pervasive that today agents
are even operating and recruiting over the internet.
Many European cities today have their share of these heart-broken
kids who have chased the European soccer dream but met a brick wall.
5. Moore Rules Out Sanctions to
Enforce Labour and Green Standards
In a speech at the London Business School on 13th
March, Mike Moore, DG WTO, pushed for the interests of developing
countries in the context of new negotiations, saying that poorer members’
interests must be given high priority for a new round to succeed.
On labour and environment, Moore ruled out the use of
trade sanctions to enforce workers’ and green standards. “WTO members
will never agree to use trade sanctions to enforce labour standards. It is
a line in the sand that developing countries will not cross. They fear
such provisions could be abused for protectionist purposes,” he stated.
Many developing countries from Africa, Asia, and
Latin America have repeatedly stated that discussion on trade and labour
cannot be included in any formal or informal meetings in the lead up to
Qatar. Pakistan’s Ambassador to the WTO, Munir Akram, told the General
Council that bringing the issue of labour to the Ministerial discussions
“would be a recipe for disaster.”
III.
WTO: Implementation of
Existing Provisions is Necessary
On 24th March 2001, CUTS Centre for
International Trade Economics and Environment (CUTS-CITEE), organised a
half-a-day panel discussion on the subject: “WTO: Implementation Issues
Versus Expansion” at New Delhi, India. It was the fourth in the series
of quarterly CUTS-CITEE’s New Delhi Working Group Meetings organised
since the beginning of 2000 to discuss current issues pertaining to
international trade and economic policy.
Mr. Nripendra Misra, Special Secretary, Ministry of
Commerce, Government of India and Mr. Joe Cunnane, First Counsellor (Eco.
& Comm.), Delegation of the European Commission in India were the two
key discussants in the panel. Mr. Pradeep S Mehta of CUTS-CITEE moderated
the discussion.
Mr. Cunnane started his speech by outlining the EU’s
position on the coming Ministerial. According to him, there is no inherent
contradiction between implementation issues and expansion. He expressed
the need of a new WTO round to renegotiate the existing agreements as well
as discuss the new issues. EU wants new issues like Investment,
Competition and Environment to be in the agenda of a new round. Many
implementation issues (e.g. anti-dumping, TRIPS) are renegotiation issues,
he said. Hence, there is a need of a new round if they are to be properly
addressed.
The EU has been the most
forthcoming to developing country demands and interests in terms of trade.
The main areas of concern for developing countries are textiles and
anti-dumping. In textiles the EU is ready to consider further
liberalisation but this could be only in return for increased market
access. In anti-dumping and countervailing duties, the EU is willing to
discuss the imposition of tighter disciplines.
On the issue of trade and
social development he said that these two issues are closely related and
the relationship needs to be discussed. The issue of labour standards
should be kept outside the agenda of a new round of WTO. The social issues
should be addressed outside the trade negotiations but through cooperation
between the WTO, the International Labour Organisation (ILO), UNCTAD and
the World Bank.
Mr. Nripendra Misra,
emphasised that implementation issues must be resolved before launching
any new round. Developing countries have already given so much without
receiving a fair return. There is a need to assess the gains and losses in
the post Uruguay Round period. If unfinished tasks are resolved, then it
would benefit developing countries.
In agriculture, steps were
taken in the right direction during the Uruguay Round, raising hopes that
trade distortions could be removed. In textiles, the Uruguay Round raised
hopes that developing countries would benefit as implementation was phased
in and finally abolishing the system of quotas by 2005. In return
developing countries would bind their tariffs and the agenda was expanded
to include TRIPS, SPS, services, TRIMS and a new settlement procedure.
Before the Seattle
Ministerial, developing countries drafted a common agenda, consisting of
94 points. These issues were drawn from various existing agreements. Out
of the 94 points of common agenda, 92 are still unresolved.
Issues like anti-dumping, agriculture, harmonization etc. need
to be resolved well before the launch of a new round so that the
confidence of the developing countries can be restored in the multilateral
trading system. Resolving these issues require political will and perhaps
in some cases redrafting. In most cases it is a matter of delivering what
is already there.
Lack of progress is demonstrated in textiles where
implementation could happen very quickly. But developed countries want to
do it only in exchange for new concessions from developing countries and
blame developing countries for delaying the launch of a new round. This
means the concessions made by developing countries in the past are
liquidated.
India is very keen for the success of the forthcoming
Ministerial meeting. Otherwise the multilateral trading system will be
threatened by the proliferation of bilateral and multilateral trading
agreements. Developing countries are the clear loser if we move away from
the multilateral trading system.
EU should not try to launch a new round without
congruence of views. This will only be harmful in the long run. The new
institutional setting of the WTO means that any time views converge on an
issue and an agreement can be formulated.
Mr. Pradeep S Mehta, Secretary General, Consumer
Unity and Trust Society, mentioned that there are some issues that deserve
further attention and debate. The relationship between WTO and
globalisation is one of them. Some NGOs are arguing that WTO should be
shut down. We need to counter such arguments and try to rebuild faith in
the system.
So far business interests have been given priority in
trade negotiations at the expense of consumer interests. In this regard he
emphasised the importance of civil society in the decision making process.
The discussion of the future of the WTO needs to be held without bias or
prejudice to lead to the right result.
IV.
View Points
1.
Trade Expansion Has Net Positive Effect on Human Rights: Pascal
Lamy
Chinese entry to the WTO has raised concerns both in
and outside China on human rights. The formal answer is that the WTO is
about trade, and that it has nothing to do with human rights. This is of
course true, but it is not very convincing – indeed, it simply draws
attention to the uncomfortable separation of the WTO from the rest of the
UN system.
This question needs to be tackled on its own merits:
is trade expansion good or bad for human rights? One tends to believe that
the net effect is positive, and therefore to be encouraged. That is the
real justification for improved trade links.
2.
Business Officials to Fight Labour, Environment Trade Sanctions
Drawing a line in the sand on an issue that has vexed
them for years, several top business officials said in interviews that
they would not agree to make sanctions enforcing labour and environmental
standards part of trade deals.
While some business leaders said it is a political
reality that labour and environmental issues must be addressed in the
context of trade, most are currently unwilling to provide the “teeth”
of sanctions that environmentalists and union leaders demand.
Alarmed at aggressive efforts by European and Asian
rivals to forge trade deals with less industrialised nations, US business
leaders are concerned that adding sanctions to the mix will cause
potential US partners to walk away from agreements. And they fear that
once the door is open, demands will ratchet up for fines, tariffs and
quotas. “We just cannot see having sanctions in trade agreements, “said
Frank Vargo, who works the trade issue for the National Association of
Manufacturers. Other top officials concurred. “I think that everybody
agrees that there will not be sanctions,” said US Chamber of Commerce
Vice President of Congressional Affairs William Morley. Emergency
Committee for American Trade President Calman Cohen said his group, which
represents many US trading giants, also opposes sanctions. One business
lobbyist said the move makes no political sense.
But
Vargo said he was open to “dialogue” on linking labour and environment
to trade. And Cohen suggested that labour and environmental issues could
be written into trade agreements without the hammer of trade sanctions.
Although he argued the issues were best left to separate forums such as
the international Labour Organisation (ILO), Cohen said specific trade
deals could include calls for changes in a country’s laws that promote
anti-environmental policies or offers of technical assistance from the US
to help its partner’s environment.
3.
Discuss Labour Rights and Environment Within a New Forum: Former
WTO/GATT Chiefs
Former Directors-Generals of the WTO and its
predecessor the GATT released an unprecedented joint statement recently,
expressing their full confidence in the WTO trading system. Arthur Dunkel
(GATT 1980-93), Peter Sutherland (GATT/WTO 1993-95) and Renato Rugiero
(WTO 1995-99) described the WTO as “one of the most precious tools of
global economic management at the disposal of governments” which
provides an “effective framework” for nations to pursue their economic
and development goals. They also expressed their belief that the public
undermining of the WTO has gone too far, calling in particular on
businesses and governments to “speak up for the WTO”.
However,
while stating that the principles that underlie the system are not in
serious dispute, they conceded that the WTO could be improved, in
particular with regard to internal and external transparency.
Regarding labour rights and environment, the three
former WTO leaders agreed that these areas should not be linked as issues
to be dealt with by the WTO, but rather should be discussed within a new
forum that would bring together the heads of all relevant trade, financial
and development institutions.
V.
Announcement
International
Workshop:
“Negotiating Agenda for Market Access: Cases of SPS and TBT”,
Geneva, Switzerland on 24-25th April 2001.
The CUTS Centre for International Trade, Economics
& Environment (CUTS-CITEE), Jaipur, India with the cooperation of
United Nations Conference on Trade and Development (UNCTAD), Geneva and
the International Centre for Trade and Sustainable Development (ICTSD),
Geneva will be organising an International Workshop on “Negotiating
Agenda for Market Access: Cases of SPS and TBT” on 24-25th
April 2001 in Geneva, Switzerland.
The meeting will
focus on enhancing the participants’ capacity, especially those from the
least developed countries (LDC), to understand and respond to SPS and TBT
issues. It endeavours to demystify issues related to these rules
vis-à-vis negotiating market access. Given the growing use of such
instruments one need to develop a better understanding of various
dimensions of the Rules in the WTO acquis.
The meeting will consist of four sessions held over
one and a half days. Four issue-specific sessions will cover case studies
highlighting the impact of these rules will be presented. Each session
panel will consist of the chair, speakers who present case studies and two
discussants.
The participants will consist of officials who handle
SPS and/or TBT measures, trade negotiators, civil society representatives
and media persons from different countries.
The venue is Salle XXVI, Palais des Nations; Ch1211,
Geneva 10.
Further information is available on our website
www.cuts-international.org
About
‘The CUTS-CITEE Linkages Update’
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is a strictly non-commercial and educational service for non-profit
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