Labor Getting Its Way in Pacts

October 15, 2000 |
Although it is not widely recognized, the effort to link labor rights to trade agreements has already gone well beyond the drawing board.

Although the issue has not gotten as much attention as tax cuts and Social Security reform, the 2000 elections present voters with a sharp contrast on the future of international trade agreements. Vice President Al Gore favors addressing labor rights and the environment in trade agreements; Texas Gov. George W. Bush calls such measures a needless bow to protectionists. But there is far more to this issue than campaign rhetoric would suggest. Rather than being a barrier to free trade, the full integration of labor rights and the environment into trade agreements may not only provide an avenue to advance those issues around the globe, but also may be critical to forging a domestic consensus in favor of future trade pacts.

There is fairly wide recognition that at least some environmental issues need to be addressed in trade negotiations, especially when international environmental agreements may conflict with trade agreements. Labor rights, however, have been widely painted, in discussions under the aegis of the World Trade Organization, as a "deal breaker" that cannot be addressed in trade agreements.

This is actually an old debate. Since the creation of the world trading system after World War II, the appropriate link between labor standards and international trade has been debated. Many developed countries, including the United States and the nations of Western Europe, historically favored some linkage. Developing countries stridently opposed it, contending that it was nothing more than an attempt by developed countries to deny them their rightful economic advantages. The issue still has resonance. One of the reasons the World Trade Organization meeting broke down in Seattle last year was that developing countries violently opposed even the establishment of a working group to consider the relationship between trade and labor rights.

Many opponents blasted the Clinton administration for considering linkage. In their view, the effort was tantamount to imposing a global minimum wage or converting the WTO into a worldwide OSHA. In fact, the Clinton administration's objectives were more modest. The U.S. effort in trade negotiations, with some support from the European Union, has focused on core labor rights, including prohibitions against slave and child labor and the right to organize unions. The International Labor Organization (ILO) has long recognized these basic rights, and most countries at least claim to support them. Thus, this is not an example of the United States trying to impose American values, but an attempt to support universally recognized objectives.

Although it is not widely recognized, the effort to link labor rights to trade agreements has already gone well beyond the drawing board. During its tenure, the Clinton administration has negotiated two trade agreements with significant labor-rights provisions and may be on the verge of striking a third. The North American Free Trade Agreement was actually negotiated by the Bush administration, but upon taking office. President Bill Clinton called for the negotiation of side agreements on labor and the environment. The record of these agreements is mixed, and critics have rightly pointed out that they have not done enough to raise environmental standards and labor protections in Mexico. That said, they have at least provided a forum for continuing discussions of these issues and spotlighted particular abuses.

In a more ambitious achievement, the United States recently struck a textile trade pact with Cambodia that conditioned expanded access to the U.S. market upon Cambodian observance of basic labor rights. To facilitate this agreement, the ILO agreed to monitor Cambodia's progress and report the results to U.S. officials. It is too early to evaluate this agreement, but it includes several features that could be a model for future agreements, including the role of the ILO as a neutral reporter on labor rights.

In this vein, the Clinton administration is seeking to strike free-trade agreements with Jordan, which is said to include significant labor-rights provisions. There appear to be an excellent chance that negotiations could be concluded this fall, setting up a potentially heated trade debate when the agreement comes up for congressional approval.

These. initial, tentative steps to integrate labor rights into trade negotiations have considerable potential. If large markets like the United States begin to link the trade benefits they grant to observance of basic labor rights, the working conditions of many in developing countries could be improved. This could likely be done without any significant disruption of commerce. Enforcing a global prohibition against child labor, for example, is likely to prove no greater burden upon the world trading system than a similar ban the United States places on interstate commerce.

Just as important, the inclusion of basic labor rights in trade negotiations could go a long way toward reestablishing the political consensus that has allowed the United States to pursue freer global trade. Since World War II, the United States has led the global effort for free trade. As last year's street demonstrations in Seattle demonstrated, that consensus has largely disappeared. If the United States is to again play a leadership role in expanding trade and reaping the benefits that can flow from it, a new consensus that explicitly recognizes the appropriate roles of labor rights and environmental protections in trade negotiations must be forged.

It is unrealistic to expect trade agreements to address all labor problems around the world. Some differences are the result of differing levels of development, and tying trade too closely to labor rights might make it impossible to reach new trade agreements. Linking observance of basic labor rights, however, to access to major markets is an achievable and valuable goal. Linking observance of such rights to international trade agreements may also improve working conditions around the world and nurture a political consensus on new trade agreements in the developed world, a true win-win proposition.

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