ILO is a specialized agency of the United Nations

276th Session
Geneva, November 1999

Working Party on the Social Dimensions of the Liberalization of  International Trade



Country studies on the social impact of globalization:
Final report

Main points for discussion

1. Document GB.276/WP/SDL/1 must be finalized for publication by the Office after the discussions in the Working Party. In order to focus on the discussion better and to facilitate completion of the text, it seems useful to present to members of the Working Party the following points which they may take into account should they wish to raise any issues during the discussion. It should be noted that these points are only provided as guidelines and should not be regarded as exhaustive.

A. Results of the seven country case studies
on the social impact of globalization

2. The research carried out within the framework of these country case studies shows that it would be too restrictive to focus the debate on international trade alone, since globalization is a complex and varied phenomenon.

3. The first question, which arises in both items on the Working Party's agenda, is whether the Working Party shares the view that, in order to discuss its social impact, it is necessary to consider globalization in the broad sense of the term and not solely international trade, which is only one aspect of this process. The report also suggests that fiscal competition which tends to lower direct tax on high incomes may further increase inequalities while reducing public-sector resources available to countries.

4. The seven country case studies show that globalization has had positive economic effects. In particular, openness to trade and foreign direct investment can contribute to job creation. However, globalization also brings about increased income inequalities and greater labour market instability.

5. In the light of the experience of their own countries or based on their own thoughts on the subject, members of the Working Party may wish to provide additional information as well as an assessment of the relative benefits and drawbacks of globalization.

6. The report supports the argument that measures taken by governments and the social partners to promote the four "social pillars" are a useful response to the challenges of globalization. The four social pillars are:

(a) measures in favour of vocational training and education;
(b) the creation of a well-functioning social safety net;
(c) the implementation of employment legislation that offers protection against certain risks while at the same time providing for an adaptable system; and finally
(d) the effective application of fundamental labour standards.

7. Do members of the Working Party consider that the strengthening of the four social pillars provides an adequate response to the effects of globalization? Have they any suggestions as to the concrete and specific ways in which these four social pillars could be implemented? Should complementary measures be envisaged? Is it for example foreseeable that a fund could be created to facilitate the integration of developing countries in the international economy, as advocated at the last meeting of the Working Party?

8. Developing countries face particular problems as a result of globalization, which is to them a clear challenge in the social sphere. At the same time their development provides the potential for growth of the world economy.

9. What priority should the ILO give to this issue in its technical cooperation activities, if need be, in cooperation with other competent organizations?

B. Further points for discussion

10. The report identifies subjects which could be topics for further research (see section E).

11. In addition to the aspects identified above and in section E of the report, on which they will no doubt wish to make comments, do the members of the Working Party have any further suggestions with respect to follow-up on the studies?

Geneva, 10 November 1999.

Updated by VC. Approved by NdW. Last update: 26 January 2000.