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Linkages of trade with environment and other activities have become the cynosure of WTO. Overloading the WTO with non-trade issues that are not the concern of the GATT agenda would distort and strain the multilateral trading system. Both developing countries and the international civil society are crying about the problems of the system, and urging the international community to take stock before pushing for further liberalisation. In this process, if the WTO continues to take on extraneous issues that pressure groups desire, then it would also be lobbied by other organisations to take into account their issues under consideration. Such protectionist barriers are likely to deny the transfer of benefits of trade liberalisation to the poor in the South. The WTO should not be extended to serve as a forum for disputes relating to trade and environment or social standards. Environmental protection or labour standards, and their cause poverty, and other such important issues should be pursued through all possible means but on independent forums, both nationally and internationally. As the developing countries inch towards preparing for the agenda for next WTO ministerial conference in Seattle, it is important that the prime important issues of trade and implementation problems that need to be discussed have to be made clear. Otherwise, the trading system would be contaminated with other issues and the mainstream trade issues will be given the short shrift. It is for this purpose, that we have prepared a Third World Intellectuals and NGOs’ Statement Against Linkage, which has been drafted by a group of eminent persons and approved by them. They are: Prof. Jagdish Bhagwati, Columbia University, USA, Prof. Arvind Panagariya, University of Maryland, USA, Prof. Jasper Okelo, University of Nairobi, Kenya, Prof. Muchkund Dubey, Retd. Foreign Secretary, Government of India and the undersigned. We therefore put this Statement forward for supporting signatures, if you agree. Please drop in a line in this regard at cuts@cuts.org Kindly also mention your designation and name of organisation after your signature. We are indeed grateful for your support. Pradeep S Mehta,
1. As intellectuals (including economists, political scientists and others) and NGOs from the Third World, we declare our unambiguous opposition to Linkage of Labour and Environmental Standards to WTO and to trade treaties. We also wish to disabuse the media and the governments in the developed countries of the notion that those who oppose Linkage are corporate interests and malign governments. 2. The demand for Linkage
via a Social clause in the WTO (and corresponding preconditions on environmental
standards for WTO-protected market access) is a reflection of the growing
tendency to impose an essentially trade-unrelated agenda on this institution
and on to other trade treaties. It is the result of an alliance between
two key groups:
Nor does the Social Clause look askance at yet other unpleasant social facts in the developed countries. For example, the United States has almost as little as 12% of its labor force in unions today. A country that insists on measuring trade openness of Japan by looking at "results" (i.e. actual imports), the US ought to be equally willing to treat the absence of unions in an industry as a prima facie presumption that there is some de facto deterrence to union formation. As it happens, unionization there has almost certainly been handicapped, among several factors, by legislation (on matters such as the right to hire replacement workers during a strike) that has impaired unions' chief weapon, the ability to strike. Nor has any developed-country proponent of the Social Clause proposed that the developed countries ought to take a far greater commitment to labour rights than the developing countries that are at a much lower stage of development. Thus, while unionization must surely be permitted in developing countries, should not the United States require, in the interest of genuine economic democracy, union representation on Boards of Directors the way some European nations do? Ironically, in the United States, one cannot even begin to do this in a meaningful way since unions are absent from most factories in the first place. Thus, in these ways, we see that the moral face of these developed-country lobbies agitating for higher labour and environmental standards in the developing countries, whether they are labor unions or corporate groups, is little more than a mask which hides the true face of protectionism. They stand against the trading and hence the economic interests of the developing countries and are in fact advancing their own economic interests; and they need to be exposed as such. 4. On the other hand, there are also morally-driven groups that genuinely wish for better standards for labor and the environment in the Third World; and they must be fulsomely applauded. But their demands for Linkage, i.e. the inclusion of provisions for improvements in standards as preconditions for trade access in the WTO and other trade treaties and institutions, while not deceptive and self-serving, are nonetheless mistaken and must also be rejected. Superior ways of advancing these objectives and agendas exist, which lie outside of the trade context and can be pro-actively pursued instead. Thus, consider: (i) Self-serving Selectivity: Contaminating the Moral Agenda: If we treat these standards from a moral viewpoint as "social" and "ethical" agendas to be advanced everywhere, we still confront the fact that the agendas will continue to be selected from the viewpoint of trade- competitiveness concerns. Therefore, they will inevitably tend to be selectively biased against the developing countries. They will also protect the developed countries from symmetric scrutiny of their own violations of non-selected social and ethical, "human rights" norms that have been incorporated in international agreements such as the United Nations International Covenant on Civil and Political Rights, and the United Nations Covenant on the Child. This has already happened. What a neutral and universal approach to the use of trade sanctions requires instead is that their use in the case of all significant human rights norms be subjected to an agreement among nation states. Thus, the possibility of juvenile capital punishment in the United States, an egregious violation of the Covenant on the Child that offends the moral sense of nearly all civilised nations today, should equally be a subject for suspension of trade access to US products generally. If trade proscription against the United States is rejected, as we agree, on the ground that it cannot proscribe even the widely-condemned possibility of juvenile capital punishment because it is politically extremely difficult to do so, how can the inability of India and Bangladesh to effectively eliminate (even "exploitative") child labor, an immensely more difficult economic and social problem, become a subject for rapid-fire proscription via the Social Clause? Surely, it makes sense to treat all such lapses from the human rights covenants, by every country, in their total economic, political and social context, advancing sophisticated and nuanced public policy programs that enable sustainable progress to be made on implementing the desired change; and this approach should be symmetrically applied to the problems endemic to the developed countries as much as to those afflicting primarily the developing countries. In short, the human-rights approach must reflect a genuine commitment to the entire slate of important human rights, treating the matter of sanctions impartially and symmetrically sans borders and without favouritism towards the rich and the powerful nations. We are distressed that we see no evidence that, except for a few groups such as Amnesty International, this symmetric approach is taken to the issue of trade sanctions. The developing countries, looking at the Social Clause for instance, cannot but regard it as having therefore been contaminated by the selectivity imposed by the rich nations. And this is not a matter for surprise. For, deep down, this selectivity reflects the competitiveness concerns that inevitably dominate trade negotiations and treaties and institutions: competitiveness is the name of the trade game! You cannot expect anything but hard play if you go to a poker game; to expect the poker players to burst into singing hymns while they drink whiskey and utter profanities is to be naive. (ii) You Cannot Kill Two Birds with One Stone: By thus contaminating and devaluing the moral objectives, even though the subset of groups advancing them have truly a moral rather than a disguised competitiveness objective, we wind up harming both trade liberalization (which is the true objective of the WTO) and advancement of the social and moral agendas. Thus, the proponents of trade liberalization divide over the appropriateness of these agendas: developing countries oppose them and developed countries end up with internal division. In the United States, we have Democrats who want to go after the developing countries on their standards even more vigorously than the Clinton administration and many Republicans who instead oppose Linkage altogether. Not surprisingly, the Clinton administration failed to get fast-track authority for trade liberalization renewed for the first time in US history last year. At the same time, the advancement of the social and moral agendas gets held up because it is being pursued (under protectionist pressures) in an evidently cynical and self-servingly selective fashion by the developed countries that push for it, mainly the United States and France. So, we undermine both of these important tasks that we, as progressive intellectuals and NGOs in the Third World would like to see advanced. The underlying reason for such an unsatisfactory outcome is that you are trying to kill two birds with one stone. Generally, you cannot. So, trying to implement two objectives, the freeing of trade and advancing social and moral agendas, through one policy instrument such as WTO, you will undermine both. You will miss both birds. (iii) Our Proposal: Get Another Stone: This leads to our main proposal: Linkage is like trying to kill two birds with one stone, so we need another stone or a whole slew of sharp pellets. That stone has to be a pro-active set of agendas, at appropriate international agencies such as the ILO, UNICEF and UNEP; moral and financial support for NGOs in the developing countries; and so on. The opponents of this idea argue that the ILO, for instance, lacks teeth. But the teeth fell out because the ILO was sidelined when the United States had pulled out of it. Today, if we are serious, we can open ILO's mouth and give it a new set of teeth. ILO can be asked, like the WTO with its built-in trade reviews under the Trade Policy Review Mechanism (TPRM), to bring out annual Review Reports on member countries' conformity to the ILO conventions; UNICEF could do the same for Children's Covenant; UNEP for Environmental Standards, and so on. Appropriate agencies putting out such impartial reviews would enable numerous NGOs to build their crusades on impartial analyses that are truly symmetric just the way the WTO has managed with the TPRM. Do not underestimate the value of information and exposure as long as it is impartial between nations. The Dracula Effect --- expose evil to sunlight and it will shrivel up and die --- can be very potent indeed. 5. Therefore, we urge that Linkage be buried. It should be replaced by Appropriate Governance at the international level, where each agenda is pursued efficiently in appropriate agencies. This does not mean that there are no necessary interfaces. This is especially true between UNEP and WTO to address inherently overlapping problems. But these interfaces can also be addressed often by imaginative solutions that can be pursued without sacrificing either trade or the environment. In lieu of the confrontations
that have become common now between NGOs pushing for trade and those pushing
for the social agendas, it is time at Seattle that we banish the Linkage
issue from the WTO agenda. Instead, we must devote all energies to these
"necessary-interface" questions with goodwill and creative solutions.
This subject does not really
belong to the WTO whose organizing principle must be the basic attribute
of free trade: that each member benefits since trade liberalization is
a mutual-gain policy. By contrast, the WTO Trade-Related Intellectual Property
Rights or TRIPs Agreement, which enshrines IPP into the WTO, essentially
redistributes income from the developing to the developed countries. We
cannot even claim that the TRIPs Agreement advances the world good: nearly
all economists agree, for instance, that the 20-year Patent length, which
was built into the TRIPs Agreement, is almost certainly inefficient and
exploitative of the vast majority of the developing-country nations. But
it got into the WTO, as part of the Uruguay Round agreement, simply because
it was backed by developed-country power as reflected in Special 301 retaliations
by the United States, and also because of endless repetition in the public
arena-despite economic logic to the contrary-that it was good also for
the developing countries (an assertion in which the World Bank economics
leadership joined, evidently under the shadow of Washington). The intellectual
objections of Third World economists, and of the negotiating objections
of their governments, were simply brushed aside. The same is likely to
happen on Linkage unless the Third World unites and is vociferous. This
time, the NGOs of the developed countries, like the corporate lobbies under
IPP, are into the game as well. In fact, they now argue that, having delivered
IPP to Corporations, the WTO must now give Linkage to Labor and for Nature.
So, having been successfully harmed once, we are to be harmed again for
equity among the lobbies of the developed countries. The NGOs pushing for
Linkage need to be reminded that IPP was pushed into the WTO, not for corporations
everywhere, but for their corporations!
The Statement has been signed by the following 103 Signatories before the document was published by us in a special edition of the Newsletter Economiquity: 1. Jagdish Bhagwati, Professor
of Economics & Political Science, Columbia University, USA
15.11.1999
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