(Courtesy:Two young Bolivian girls give a piglet a bath before dressing him for dinner. / United Nations Photo / Jean Pierre Laffont.)
The issue of linking labour standards to international trade is a contentious one. The proponents of universal international labour standards and enforcement through international trade agreements argue that lower labour standards, including child labour, creates an unfair advantage to the countries using them and results in cheaper goods entering their markets endangering their products as well as labour. They argue that similar labour standards must be implemented across to avoid unfair competition and trade and propose that countries should be allowed to impose trade barriers when labour standards are not followed. The opponents of this view argue that labour standards are the domain of domestic governments and should not be linked to enforceable international trade agreements. While accepting that improvements in standards of labour is a compelling prerogative for countries its linkage to trade is a veiled attempt at protectionism by the developed world to protect their products and labour. They oppose any linkage with international trade and argue that the WTO is no the right forum to take up this issue. I had blogged about child labour and trade issues in earlier blog posts here and here .
The Boston Review carried a piece on this issue titled "Hype or Help - Globalisation and the fight over labor standards". It argued that the fight for better labour standards by the developed world would actually not benefit it to the extent that is normally believed.
It would be interesting to see the debate in the context of existing WTO Agreements. Article XX (General Exceptions) of the GATT provides countries to take certain measures under specific circumstances to further certain public policy goals. Article XX (a) is as follows:
"Subject to the requirement that such measures are not applied in a manner which would constitute a means of arbitrary or unjustifiable discrimination between countries where the same conditions prevail, or a disguised restriction on international trade, nothing in this Agreement shall be construed to prevent the adoption or enforcement by any contracting party of measures:
(a) necessary to protect public morals;"
Can the universalisation of labour standards be argued from a standpoint of public morals? Let us take an example of a developed country which is impacted by cheaper goods from a developing country where labour standards are less stringent than its own. Can the developed country legislate banning products of countries which do not follow a certain labour standard on the grounds that using such labour standards goes against its "public morals" as it considers a certain degree of labour standards as necessary and moral. Though it would not violate the "national treatment" principle as goods produced within the developed country too must follow similar standards, is it a disguised restriction on international trade? Does it constitute veiled protectionism? Can the "public moral" standard be used to impact processes, in this case labour standards, outside one's country?