This Symposium was the second event in the series of international events being organised by CUTS to promote understanding between antagonists and protagonists on the issues of linkages between trade and labour standards, and trade and environmental standards.

The event was organised on the same pattern as the London event, however the two sessions on environment were merged to a single session addressing general topics in this issue area.

brief event report

3.1 Prof. Jagdish Bhagwati of Columbia University, and Chairman of CUTS’ Advisory Committee, made the opening remark in the inaugural session, which was chaired by Prof. Robert Litan of Brookings. While welcoming the participants, Mr. Pradeep S. Mehta, Secretary General, CUTS threw some light on the importance and relevance of the ongoing linkages debate and CUTS’ efforts in this regard. He emphasised the intention of the meetings, to provide a forum for constructive discussion and an opportunity to bridge differences of opinion.

3.2 Speakers in the inaugural session said that both environmental and labour standards are important but the important question is which institution should deal with them. They also said the WTO already has an overloaded agenda and any new issues will only harm the system. It was mentioned that TRIPS has already opened the doors of the WTO to non-trade issues, raising the possibility that labour and environmental standards would be next in line.

3.3 At the same time WTO's capacity to handle non-trade issues was also discussed. With an annual budget of merely US$100mn, the capacity of the WTO secretariat to deal with anything more than its current economic analyses was brought into question. This situation is worsened by the resistance of developed countries to providing any additional funding for the WTO secretariat.

3.4 In the first session on trade and labour standards, there was a heated discussion among proponents and opponent of social clauses. The supporters said that it is of utmost importance implement measures which can ensure basic rights of workers all across the globe. They argued that social clauses are essential to safeguarding workers’ rights in developing countries as much as in developed countries. They said that importance of core labour standards has been recognised by all countries at the ILO. Under these circumstances, the only question is how standards may be most effectively implemented and they argued that this could best be done by an institution with “teeth”, like the WTO.

3.5 However, representatives of the opposite camp remarked that the North has always exploited the South. Now they continue to do so by means of economic tools. These opponents argued that rich countries are not worried about the state of workers in the developing countries. Rather they are interested in restricting trade through economic sanctions. Moreover, trade sanctions do not help the workers who are really vulnerable. The example of India was cited where most of the workers with low labour standards are employed in the unorganised sector and trade sanctions will only increase their immeserisation.

3.6 They referred to the perception that rich countries will put the eradication of child labour and forced labour as top priorities, effectively banning products made directly or indirectly with child labour or forced labour from global markets. Countries in which child labour is an endemic problem could then face severe restrictions on all their exports.

3.7 If the social clause is rigorously implemented, it would amount a virtual and veritable ban on a large range of developing county exports. This would have devastating implications for the 350 million people in the unorganized sector who would have to be excluded from any productive activity. Unlike the US, for instance, India does not have a national minimum wage policy. So, in the strict legal sense, virtually all those who are in the unorganized sector come in the category of ‘forced labour’. Also, nearly 65 million children below the age of 14, who should be in education are forced by poverty to work to earn their livelihoods.

3.8 The speakers pointed out that trade sanctions have in the past in fact backfired. They cited example of child labourers employed in the textile sector in Bangladesh. As a result of sanctions children were immediately thrown out of jobs and they became worse off. Rather than going into school they entered more dangerous professions. It was emphasised that child labour is a socioeconomic problem that requires a different kind of solution. Given their state of poverty, most parents prefer child labour over child starvation, they argued. The solution lies in poverty reduction, to which trade liberalisation rather than trade barriers will contribute.

3.9 During discussions it was also pointed out that the ICFTU’s actual position (which emerged in Durban congress of ICFTU in 2000) is that the ILO, not the WTO, should be the standard setting body and the ultimate decision making body on sanctions. However, in a recent statement for the Doha ministerial conference, the ICFTU contradicted, coming out in favour of the WTO as the ultimate decision making body to impose sanctions, which was declared unfortunate by most of those present.

3.10 In the session on "Voluntary instruments and fair trade", while the importance of voluntary instruments was highlighted it was recognised that in some cases they are also becoming trade barriers for products from developing countries. It was pointed out that these instruments could promote fair trade and satisfy those concerned about state of labour standards, provided they are developed and encouraged in the right spirit.

3.11 In the afternoon session on "Trade and environment", speakers mentioned that the debate on trade and environment was entirely different from that of trade and labour standards. There is already a Committee on trade and environment at the WTO which has been discussing these issues for over five years. It was pointed out that the issue of clarification of WTO rules to recognise trade measures taken pursuant to Multilateral Environmental Agreement (MEAs) is not an urgent one and there is only a small chance that such issues will be raised in the near future.

3.12 The speakers said that environmental concerns are important to developing countries as well as developed ones. However it was recognised that lack of resources is a problem in most of these countries. The developing countries should take part in discussions to set any environmental policies/standards, and they should be encouraged to participate in the process through technical and financial help. Speakers noted that trade and environment disputes have so far been resolved in favour of environmentalists, so the negative impact of trade on the environment was not such a cause for worry.

3.13 Mr. Pradeep Mehta at the end thanked all the participants and speakers for coming and contributing the event. He conveyed his special thanks to the Brookings Institution who provided tremendous help in organising this event. He also assured all the participants that this debate would be taken forward and that the dialogue would continue at many such events in future. Prof. Robert Litan of Brookings also thanked all the participants and congratulated CUTS on organising such a useful and productive event.

Conclusions

This was a unique initiative taken by CUTS to organise events in developed countries with the aim of giving policy makers and civil society groups in the North, an opportunity to interact with developing countries representatives and understand the ground realities on the issues of labour and environmental standards. The tremendous response by participants in both the events demonstrated their willingness to understand each other’s positions better.

Experts as well as participants present in both the events generally recognised that non-trade issues should not be allowed as devices to deny market access to developing countries. They also recognised that the genuine concerns of developing countries should be addressed before finalising any policies with respect to labour or environmental standards.

Both the events gave the clear message that the WTO was created to facilitate trade and its agenda should be limited to this. Introducing other issues will mean that neither are resolved adequately. The importance of both labour as well as environmental standards was recognised but it was emphasized that these should be addresses in the proper fora. The need for more discussions on how to strengthen and use other organisations like UNEP for environment and ILO for labour standards was also highlighted.

Feedback received from most of the participants highly appreciated CUTS’ efforts in organising these symposia and more importantly recognised the need to maintain the level of dialogue. Only more and more such discussions can lead to better understanding between the antagonists and protagonists and this is the only way we can bridge the gap and find a solution that promotes development while protecting workers and the environment.

list of participants

1. Luis Arnal, World Bank, USA

2. John Audley, Carnegie Endowment for International Peace, USA

3. Claude Barfield, American Enterprise Institute, USA

4. Chantal Blouin, The North South Institute, USA

5. Inbom Choi, Institute for International Economics, USA

6. Susan Collins, Brookings Institution, USA

7. Hugh Corbet, Cordell Hull Institute, USA

8. Judith M. Dean, U.S. International Trade Commission, USA

9. Gordon Betcherman, World Bank, USA

10. Eckhard Deutscher, World Bank, USA

11. Michael J. Ferrantino, U.S. International Trade Commission, USA

12. Monty Graham, Institute for International Economics, USA

13. Jaime Granados, USA

14. Daniel T. Griswold, Cato Institute, USA

15. Jon Horowitz, USA

16. Merit E. Janow, Columbia University, USA

17. Kyle Johnson, U.S. International Trade Commission, Washington, DC

18. Hiau Looi, World Bank, Washington, DC

19. Serge Le Gal, World Bank, Washington, DC

20. Stacie Harting, International Labour Rights Fund,

21. Jose Luis Machinea, Inter-American Development Bank,

22. Christine A. McDaniel, U.S. International Trade Commission,

23. Van Dorn Ooms

24. Joseph Pelzman, George Washington University, Washington, DC

25. Kenneth Reinert, George Mason University, Arlington, VA

26. J. David Richardson, Institute for International Economics

27. Sandip Sukhtankar, Brookings Institution,

28. Elliot Schwartz, Committee for Economic Development, Washington, DC

29. Beata K. Smarzynska, World Bank, Washington, DC

30. Karen Tramontana, GSA

31. Sidney Weintraub, CSIS

32. Trudi Witbreuk, Embassy of Australia

33. Yoram Wurmser, Columbia University,

34. Robert Litan, Brookings Institution,

35. Pradeep S. Mehta, CUTS, India

36. Jagdish Bhagwati, Columbia University,

37. Lael Brainard, Brookings Institution,

38. Thea Lee, AFL-CIO,

39. Swami Agnivesh, Bonded Labor Liberation Front, India

40. Arvind Panagariya, University of Maryland,

41. Robert Scott, Economic Policy Institute,

42. Kimberly Elliot, Institute for International Economics,

43. Alice Tepper Marlin, Social Accountability International,

44. Dale Andrew, OECD Trade Directorate, Paris

45. Steve Charnovitz, Wilmer, Culter & Pickering,

46. Konrad von Moltke, International Institute of Sustainable Development, Hanover

47. Tariq Bunuri, Stockholm Environmental Institute

48. Gregory Shaffer, University of Wisconsin,

49. Sandeep Singh, CUTS, India

50. Olivia Jensen, CUTS, India

51. Sylvia Ostry, University of Toronto, Canada

52. Lyuba Zarsky, Institute for Security and Sustainable Development,

53. Rob Scott, Epinet

54. Alicia Jones, Brookings Institution

55. Donald Tench IV, Brookings Institution,

56. D.R. Khatkhate, 6500 Wilson Lany Bethesda MD 20817

57. Mindy Rogers, US International Trade Commission,

58. Simona Pasca, American Enterprise Institute, Washington

59. Chantal Blouin, The North South Institute Ottawa , Canada

agenda for event

Morning dialogue: Trade and Labour Standards

09h00 Opening Session

Chair: Robert Litan, The Brookings Institution

Welcome: Pradeep S. Mehta, CUTS

Speaker: Jagdish Bhagwati, Columbia University

09h45 Trade and Labour Standards

Chair: Lael Brainard, The Brookings Institution

Thea Lee, AFL-CIO

Swami Agnivesh, Bonded Labour Liberation Front

Arvind Panagariya, University of Maryland

Robert Scott, Economic Policy Institute

11h15 Coffee Break

11h30 Voluntary Instruments and Fair Trade

Chair: Kimberly Elliott, Institute for International Economics

Alice Tepper Marlin, Social Accountability International

Dale Andrew, OECD Trade Directorate

13h00 Lunch

Afternoon dialogue: Trade and the Environment

14h00 Trade and the Environment

Chair: Steve Charnovitz, Wilmer Culter & Pickering

Konrad von Moltke, International Institute of Sustainable Development

Tariq Banuri, Stockholm Environmental Institute

Gregory Shaffer, University Of Wisconsin

15h30 Closing

Claude Barfield, American Enterprise Institute

Sylvia Ostry, University of Toronto

CUTS Centre For International Trade, Economics & Environment (CITEE)

D–217, Bhaskar Marg, Bani Park,

Jaipur 302 016, India,

Ph: +91(0)141-228 2821-3

Fx: +91(0)141-228 2485

Email: cuts@cuts.org

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