(Excerpts of debate between Deepmala Mahla of CUTS, and James Howard of ICFTU, in 5th International Business Forum, Hanover, Germany, October, 2000)

James Howard:
Evidence from Malaysia, Mexico, Turkey, Lesotho, Egypt and many other countries shows that a negative link between globalization and basic workers' rights exists. Instead of being a source of wealth for improving living conditions, trade has too often resulted in governments lowering workers' rights standards in order to minimize labor costs. Many countries are relying more and more on an export model of development which is based on exploitation and increased competition with other countries. Governments have introduced export-processing zones where unions are not usually tolerated. That keeps working conditions dangerous and wages low, especially for the women who make up 80 percent of the work-force in the zones.

The World Trade Organisation (WTO) needs to find a response to this downside of globalisation, or there will be a collapse in public confidence in the international trading system - just witness what has taken place in negotiations or on the streets of Seattle. Countries might even stop implementing WTO rulings. If that happened, the trade system could break down entirely. The only way for the WTO to make headway is by putting trade policy into a context of overall international objectives which include labour and environmental standards as well as unfair terms of trade. This major challenge is no longer avoidable.

Developing countries have charged industrialized countries with trying to remove their comparative advantages by introducing binding labor standards. From the viewpoint of the International Confederation of Free Trade Unions (ICFTU) however, two thirds of whose affiliates come from developing countries, the inclusion of core labor standards in the WTO is not a question of protecting markets but of protecting workers' basic rights worldwide. Core labor standards are fundamental workers' rights.

Deepmala Mahla:
In heated controversies, developed countries have made charges against developing countries based on myths about the latter's labor standards. Child labor in the Indian carpet industry, for example, allegedly negatively affects the Nepalese carpet industry. Yet research has shown that there is no evidence to support this claim. The Nepalese carpet industry is fine. These charges, however, have fueled increasing demand for linking trade and labor standards in the WTO. If we open one window on non-trade issues, then other issues like gender or human rights will continue to enter. This contamination of trade with non-trade issues does not promote the trade agenda. Rather, this sort of linkage has immense potential for abuse as a protectionist device of the North. It would help only a few rich countries, not global welfare.

To be clear: The South is very interested in workers' rights as well as the welfare of children and their education. The Consumer Unity and Trust Society (CUTS) supports demand for better regulation of labor standards, but regulation must be introduced domestically in order to do justice to cultural differences. While the South carries the burden of complying with complex WTO codes, the North hardly understands the problems deriving from poverty coupled with unfair terms of trade. Much of the South's sovereignty has already been sold to financial authorities. It is asking too much of the South to let social standards be determined by authorities other than domestic parliaments.

The ILO is a democratic body and the WTO is a non-transparent body. Demanding the inclusion of social issues in the WTO implies weakening the ILO. Why should we do that? A forced coupling of the wagon of labor standards with the trade engine of the WTO will harm both the advancement of the social agenda and trade liberalization. We cannot kill two birds with one stone. Instead, we need a new stone, which is to say that we need appropriate international institutions that can effectively handle an agenda different from the trade agenda. It would be better to give those institutions a fresh set of sharp teeth than it is to overload the WTO with non-trade issues.

James Howard:
I don't regard social and environmental standards as being non-trade issues. You yourself refer to links existing between the two. We need to ensure that globalization doesn't lead to further negative repercussions on social and environmental standards.

Within trade unions, there is tremendous support for linking workers' rights and trade. The only exceptions are the Indian trade unions. 95% or more of the trade unions from developing countries, including South Africa, Brazil, Malaysia, the Philippines and Korea support linking the issues. The Indian unions are afraid of protectionism from the North. We have made it very clear that when taking steps against the negative effects of trade on workers' rights, protectionist risks cannot be accepted. In the unions, ptotectionism has not been on anyone's mind. The debate should be shifted away from protectionism towards a debate between democratic countries committed to human rights and dictatorships that use labor standards as a device for global competition.

Deepmala Mahla:
Labor standards are definitely helpful - for instance, because children need education. However, standard rules are for standard situations. When situations are non-standard, standard rules must fail. We are all going on the assumption that child labor is necessarily bad, for example. Some research shows the opposite. In rural India, a woman could force her child to go to the car mechanic rather than to school because he can earn a livelihood there. A fisherman makes his son go to sea when he is very young to help him avoid developing seasickness later. Sometimes, you just have to get into someone's skin. Only then you can handle their problems.

James Howard:
Cultural differences between countries must certainly be appreciated. At the same time though, there are also basic human rights which have been internationally agreed upon and are included in the UN Governance on Human Rights. Laws are not everything, but laws are a start. A law provides a basis for governments to set up political action programs. The ILO Convention 138 against child labor is one example. It doesn't seek to banish child labor overnight, but instead talks about getting governments to demonstrate the genuineness of their fight against child labor.

Deepmala Mahla:
First of all, I agree that a law can provide a basis, but laws must be introduced at a domestic level, where issues are more clearly understood. Secondly, the majority of workers are working in the domestic and not in the export sector. If labor standards were imposed on domestic workers as well, unemployment would rise and working conditions would deteriorate. Finally, if the export sector is found guilty of violating workers' rights, then corruption and forgery of documents will increase. We don't want to increase either unemployment or corruption.

James Howard:
The WTO would primarily address the situation of workers in the export sector. In Asia and Latin America, however, this sector is expanding much faster than the overall growth rates. WTO regulation would thus ensure that an increasing number of workers in the export sector would benefit from their labor standards.

Deepmala Mahla:
The data show the domestic sector as being slightly larger than the export sector. We cannot afford to let only export workers benefit from workers' rights. We would pit workers against workers. That would be the most unfortunate thing that could possibly happen.

James Howard
Director Employment and International Labor Standards,
International Confederation of Free Trade Unions (ICFTU)-
Brussels, Belgium

Deepmala Mahla
Consumer Unity and Trust Society (CUTS)
Jaipur, India

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Debates with the trade unions through the columns of Financial Times: An Example

Social Clause is a Blind Alley
Financial Times, London, June 03, 2000

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.

Human Rights at Work are a Building Block of Stability
Financial Times, London, June 09, 2000

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.

CONTACT US

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Jaipur 302 016, India,

Ph: +91(0)141-228 2821

Fax: 91.141.2282485

Email: cuts@cuts.org

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