¥þ ²y ¤Æ ºÊ ¹î

Putting Worker and Trade Union Rights in the WTO?

Gerard Greenfield

Some trade unionists and human rights groups argue that the WTO can be reformed” by including core labour standards” in the WTO agreements. By doing so this will protect basic worker and trade union rights and balance free trade with social guarantees. This notion of including special clauses on social protection in the WTO agreements was originally called the social clause” proposal.

Basically, there are three reasons why supporters of the social clause” believe it should be included in the WTO.

The first reason is that the ILO is too weak and has failed to prevent the violation of ILO Conventions.

The second reason is that the WTO is considered to have more teeth” than the ILO because the WTO can place trade sanctions on those countries where core ILO Conventions are violated.

Third, this will limit the negative social effects of free trade under the WTO and force the WTO to be more socially responsible.

What are core labour standards?

Labour standards” refer to the standards set by the International Labour Organisation (ILO). The ILO is an organisation of the United Nations created in 1919. The members of the ILO are governments. Trade unions and employers are not members of the ILO, but participate in ILO meetings at the invitation of their own governments.

The governments which are members of the ILO express their commitment to protecting labour standards by signing the ILO's International Labour Conventions. There are nearly 200 different Conventions signed by ILO members, including the protection of women workers’ health, chemical safety in the workplace, the right of workers to organise trade unions, etc. As such these Conventions refer to worker and trade union rights as universal principles common to all countries. However, we should be clear that even if a government is a member of the ILO, it does not have to agree to all of the ILO's Conventions.

In theory once a government signs an ILO Convention it must make sure that the worker or trade union rights protected in that Convention are not violated. This means that the government cannot have laws or policies which violate this right, and the government must make sure that employers do not violate this right. Instead, national laws and policies should follow ILO Conventions by protecting these rights. Of course, there is a very big gap between these principles and reality. There is not a single member of the ILO today which is not violating one or more of its Conventions.

Core” labour standards refer to only five ILO Conventions which are considered to be basic trade union and worker rights. These include freedom of association, the right to organise and bargain collectively, freedom from forced labour, equal pay for equal work, and no child labour. (See the BOX for more details).

The next question is how this social clause” supposed to work?

How is it supposed to work?

The social clause proposal is based on the idea that if a member of the WTO violates one or more of the core labour conventions then a complaint can be made to the WTO by another member. This complaint is made like any other trade dispute under the WTO. (See Globalisation Monitor, Issue 2, pp.6-8). A member of the WTO complains that part of a WTO agreement is being violated by another member, and the WTO then forms a panel to judge the case. If the WTO decides that the complaint is true, then it will order that member which is breaking the rules to make changes or face trade sanctions.

Here is an example of how the social clause in the WTO might work:

In the Free Trade Zones in Sri Lanka trade unions are banned. Nearly all of the products made in these Free Trade Zones are exported to other countries. This includes garments exported to the US and the EU. Since trade unions are banned in these Zones, this clearly violates two of the core labour standards - workers’ right to organise and freedom of association. This means that a country which imports these garments, such as the US, can make a complaint to the WTO. The WTO would then set up a panel to consider the case. This WTO panel would be supported by the ILO which then investigates whether labour standards are being violated. If the WTO decides that the ban on trade unions in Sri Lanka's Free Trade Zones violates core labour standards, then the Sri Lankan government is ordered to lift the ban on trade unions in the Zones. If it does not, then the WTO will permit the US government to place trade sanctions on Sri Lanka, preventing these goods from being exported to the US. The idea is that these trade sanctions would force the Sri Lankan government to lift the trade union ban.

Although it sounds as though it might be an effective strategy for supporting Sri Lankan garment workers’ rights, let us consider the following points about how it would really work in practice.

How will it really work?

Only governments can make complaints to the WTO. Trade unions, NGOs or other social movement organisations cannot. So it is up to the government to decide whether or not it makes a complaint to the WTO about another member's violation of core labour standards. For example, when the AFL-CIO asks the US government to make a complaint to the WTO about the ban on trade unions in Sri Lanka, the US government will make the final decision. It will make this decision with many other political, economic, military and foreign policy considerations in mind. So the decision to use the social clause in the WTO will be a foreign policy decision - not a decision on social justice or workers’ rights. So trade unions supporting the social clause proposal are actually encouraging powerful governments to make the final decision on the meaning of workers’ rights by letting them use workers’ rights as a bargaining tool over other foreign policy and trade issues.
The WTO would treat the violation of core labour standards like any other trade dispute. This means that the WTO will make its decision based on whether a violation of core labour standards leads to unfair trade. So the ban on trade unions in Free Trade Zones in Sri Lanka is not judged in terms of the violation of worker and trade union rights. It is only judged in terms of whether, as a result of this trade union ban, Sri Lankan garment exports are cheaper and therefore competing unfairly with other garment exports.
Again, the real meaning of universal workers’ rights will be lost. Everything will be judged in terms of the ideology of free trade.”
The trade sanctions which follow a WTO decision are not limited to the product under dispute. We have already seen this when the US won the case in the WTO against the EU over bananas. The US government put trade sanctions on many other imports from the EU, including cheese and telecommunications*, not just bananas. So if the US government won a complaint against garment exports from Sri Lanka, then it could place trade sanctions on coffee and tea or any other export. Again, it's up to the government to decide which products it will ban or restrict.
When the WTO decides on a trade dispute, it places blame on the governments of member-countries. It does not take into consideration the TNCs operating in those countries.

Let us look again at the example of Free Trade Zones in Sri Lanka. The fact is nearly all of the production in these Free Trade Zones is by foreign companies or subcontractors of foreign companies. So it is clear that these foreign companies benefit from the ban on trade unions, which keeps wages low and allows employers to repress workers. In fact, there are many Hong Kong companies operating garment factories in the Free Trade Zones in Sri Lanka. These garments are exported to the US and EU. Under the social clause proposal, the WTO would rule against the Sri Lankan government and trade sanctions would be placed on the country. It would not target the Hong Kong companies directly involved in this exploitation or any other foreign companies. While the WTO is investigating the case - which could take between two to seven years - the Hong Kong companies could easily avoid the trade sanctions by moving to Cambodia and doing the same thing there. But Sri Lanka would be stuck with trade sanctions on its garments and other exports.

Another example would be sports shoes made in Indonesia. If the US government won a complaint in the WTO against the Indonesian government for violations of workers’ rights in the sports shoe industry, then the US could place trade sanctions on any imports from Indonesia. The fact that it is Nike that is using subcontractors which violate worker and trade union rights is ignored. So we have a US TNC making huge profits from the repression of workers’ rights in Indonesia, but the ruling of the WTO is only against the country, not the TNC.

In this sense, the proposal for a social clause in the WTO fails to take into the reality of globalisation. TNCs, TNC subcontracting, and relocation of production from country to country are all part of the globalisation strategy. But the proposed social clause strategy only targets countries and their governments.

BOX
The five core labour standards are based on the following ILO Conventions:
Freedom of Association (Convention No 87): This means workers are free to form workers’ organisations (such as trade unions) of their own choosing and that these organisations should be free from interference or repression by governments and employers. The idea here is to protect the independence of workers’ self-organised unions and to make sure they are free from government or employer control.
Right to Organise and to Collective Bargaining (Convention No 98): This means that workers have the right to organise themselves into trade unions and cannot be stopped by the government or employers. These unions have the right to negotiate with employers on a collective basis. This gives workers the right to bargain with employers collectively instead of individually.
Forced Labour Convention (Convention No 29): This protects workers from being forced to work by political means, and includes protection from slavery and prison-labour. (Note: I use the term 'political’, because under capitalism all workers are forced by economic and social means to sell their labour!)
Equal Remuneration Convention (Convention No 100): This gives all workers the right to equal pay for equal work. That means there cannot be wage discrimination based on sex, race or ethnicity. For example, women workers doing the same work as men workers must be paid the same wages as men workers.
Minimum Age Convention (Convention No 111): This means that there must be a minimum age for workers. The idea here is to prevent child labour.