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ILO Director-general Urges Parallel Commitment to Labour Standards and Trade Liberalization


Press release | 06 March 1996


GENEVA (ILO News) - The Director-General of the International Labour Office today urged ILO and World Trade Organization members to adopt active and parallel commitments to achieving trade liberalization and social progress.

Speaking at the Wilton Park Conference in Steyning, West Sussex (United Kingdom), Michel Hansenne said that he believed it was possible to give tangible expression to the social dimensions of international trade. However he rejected "a single-minded insistence on trade sanctions or an inflexible resistance to any form of link between trade and labour standards." Rather than adopting coercive legislation, he suggested that the best hope "lies in bringing back into focus the objectives of fundamental labour standards and social progress and devising imaginative means of pursuing those objectives."

ILO and WTO Member States, he said, "must not only refrain from artificially maintaining inferior social conditions in order to gain an unfair comparative advantage in international competition, but, much more positively, they must also endeavour in good faith to distribute the fruits of the liberalization of trade within their societies equitably."

In Hansenne's view such a commitment, "is inherent in a country's membership of the ILO." Countries that are members of both ILO and WTO, "must take into account in one Organisation the commitments that they have voluntarily entered into in the other."

He said he did not anticipate any formal links being forged between ILO and WTO in the near future, nor did he consider the inclusion of a social clause in the next round of multilateral trade negotiations as something that can be done quickly or easily. However he warned that opponents of such a clause "should not assume that the issue will fade away. It will not."

While underlining the potential benefits of free trade under the terms of the Uruguay Round, he noted that "workers who feel their jobs and livelihoods threatened by the opening of markets will be extremely sensitive to competition they perceive as unfair, as based upon the exploitation of other workers."

Hansenne argued that consumers, who are already responsive to environmental concerns, will be increasingly reluctant to purchase goods produced by forced labour or child labour.

"If international agreement cannot be reached on a few rules of the game, some players will make their own rules. Unilateral trade sanctions by powerful individual countries or trading blocs, restrictions on development aid or financial flows, and consumer boycotts will be hard to avoid. The risk of renewed protectionism cannot be discounted," he said.

In his speech, Hansenne recognized that the degree of social protection that its Members can subscribe to depends on levels of economic development and industrial Organisation. However he argued that "Members of ILO are not free to ignore the general commitment they have entered into to "play the game" of social progress fairly" by promoting social objectives in line with economic means. That same commitment, he added, "also applies to them as Members of the WTO."

The debate thus far on trade and labour standards has been, in Hansenne's view, characterized by "the vigorous re-statement of existing views" and "oversimplified into allegations of unfair competition or "social dumping" on the one hand and disguised protectionism on the other." Hansenne acknowledged that an ILO Working Party on the social dimensions of the liberalization of world trade, established in 1994, has been unable to reach consensus on whether a "social clause" in trade agreements would be desirable. However, he added that the deliberations "have succeeded in clarifying and defining the terms of the debate."

Proponents of a social clause, said Hansenne "are not calling for global minimum wages, uniform working conditions or anything of the sort." The content of any proposed social clause would be limited to the very basic workers' rights that are prescribed in fundamental ILO Conventions: "the prohibition of forced labour and child labour, freedom of association and the right to organize and bargain collectively, equal remuneration for men and women for work of equal value, and non-discrimination in employment."

The Social Summit held in Copenhagen in 1995, he recalled, "invited all governments to protect and promote respect for these rights. This endorsement by the Heads of State and Government of virtually all countries around the globe was, in my view, extremely significant", he added, "because it both circumscribed the notion of fundamental rights and affirmed their universal validity."

Throughout the debate opponents of any "social clause have reaffirmed their recognition of these basic rights and their commitment to improving social conditions as economic development proceeds."

Both sides recognize that developing countries have the right to pursue their economic growth by making full use of their legitimate comparative advantages. Hansenne observes that while "fears and suspicions have by no means been quelled ... I am reasonably optimistic that it will be possible to agree on a number of common rules, even though these common rules may be a far cry from the kind of social clause originally proposed."

As a way of ensuring that the economic progress that liberalized trade produces goes hand in hand with social progress, Hansenne urged the observance of certain "fundamental rules which apply to all countries irrespective of their level of development and which in fact are a precondition for social development."

"Indeed, the ban on forced labour, the recognition of freedom of association, the right to engage in collective bargaining and protection against discrimination are merely the conditions that must be fulfilled for the labour market to function optimally."

These rights, argues Hansenne, "can be seen as the logical extension to the labour market of the principles that are inherent in the liberalization of markets in products and services."

"There remains one component of international standards generally recognized as fundamental that does not easily fit into either of the two categories: the elimination of child labour", said Mr. Hansenne. "Pursuing this objective is at once a matter of political will and of economic and social development. It is certainly the issue attracting the greatest public attention but also the problem most difficult to overcome. Those who rightly insist upon the elimination of child labour as one of the rules of the game have a responsibility to give practical support to countries making a serious endeavour to attack the problem.