APPENDIX 13
Memorandum by the Trades Union Congress
When we presented evidence to the Committee
on 22 November, we were asked to provide a note on the the long
term aim of the international trade union movement to establish
a formal link between ILO core labour standards and the rules
of the international trading system established by the WTO. This
aim was set out in a resolution of the ICFTU Congress in 2004
which noted, "The commitment made by member states at the
1st WTO Ministerial Conference (Singapore, December 1996) to the
observance of core labour standards demands urgent action by the
WTO together with the ILO. The ICFTU reaffirms that it can best
be honoured through the incorporation of a workers rights clause
into WTO statutes that would require all products traded between
countries to be produced and distributed in compliance with core
labour standards. Such a clause would be anti-protectionist, pro-development,
and a crucial instrument for social justice in an open world trading
system."
We use this opportunity to stress three key
issues:
— Core labour standards are basic human
rights. We are not proposing global minimum wages or universal
standard working conditions. The aim of establishing a formal
link is to prevent governments trying to gain competitive advantage
through the repression, discrimination and exploitation of workers.
— We consider the proposal for a social
clause to be anti-protectionist, aimed at opening markets and
increasing growth and employment. Such provisions will help spread
the benefits of trade more fairly within and between countries
and help counteract the threat of a popular backlash.
— The key to any successful linkage
would be agreement on a step by step procedure which is open,
fair, and multilateral and gives time for problems to be resolved
by discussion and negotiation; trade measures would be reserved
only for cases of the most prolonged non-cooperation.
We do not wish to introduce a system in which
punitive sanctions are threatened as soon as a violation of CLS
is identified rather this is part of a wider package of measures
aimed at changing behaviour. This has been our experience to date
with existing trade measures such as the GSP where preferences
can be granted as lead to a process of review and improvement
and only after an extremely exhaustive process are tariff preferences
threaten to be remove eg the EU GSP and Belarus.
One possible format would be the creation of
a joint WTO/ILO advisory body which would oversee the implementation
of a social clause. It would review periodically, or on the basis
of well-justified complaints, the application of CLS in law and
practice by individual national governments.
An analysis of the application of CLS could
also fairly easily be included in the current system of trade
policy reviews carried out on every WTO member. The reports of
the reviews would typically show that either the standards were
being followed or that certain specific changes in law/practice
were needed to achieve compliance. In the latter case, the ILO
would make recommendations to the country concerned on the changes
required and, if necessary, offer technical assistance and make
additional resources available to help countries reach these objectives.
The next stage would be a further report after
an adequate period of time for the government concerned to take
remedial action; the original ICFTU proposal gave a time span
of two years. This second report would typically reach one of
three conclusions; (1) the country was in conformity with CLS,
(2) there was a problem, but progress was being made, (3) the
government had failed to cooperate with the ILO and standards
were still not being met. In the event that progress was being
made a further report and investigation would take place after
a specified period. If there was clearly no progress being made
the government concerned could be issued with a warning that if
after a specified period there was still no cooperation the matter
would be referred to the WTO Council/Secretariat for consideration
of possible measures including punitive ones.
In examining what measures the WTO could then
potentially take we would expect there to be a range of options
which could be escalated over time if the government in question
continued to fail to take remedial action. A first potential step
for instance could be to suspend a countries right to use the
WTO's binding rules for dispute resolution. Other options might
well then also include the application of tariffs on exports from
the country concerned on a gradually increasing basis or measures
in specified sectors. In reality this would really involve bringing
the pressure of the existing WTO trade disputes settlement mechanism
(suitably adapted to include ILO expertise) and currently nine
out of 10 cases before the disputes body result in remedial action
by governments to amend their laws/practices before hostile measures
are needed. So punitive sanctions in the form of increased tariffs
would be very much a last resort after a clear and transparent
process had been followed, allowing plenty of time for dialogue
and remedial action. In all such cases fully transparent procedures
would ensure that there was no way the process could be misused
for protectionist purposes.
With apologies for the delay, I hope this is
nevertheless useful.
Owen Tudor
Head, European Union and International Relations
Department
| 
