India, Indonesia caution against trade-labor link
India, Indonesia caution against trade-labor link
NEW DELHI (AFP): Indian Prime Minister P.V. Narasimha Rao and
Indonesian President Soeharto yesterday cautioned against western
attempts to link international trade with labor standards in the
changing global economy.
They spelled out their stand on the first day of a conference
on labor in the Indian capital where a message by Soeharto was
read out to delegates from nearly 80 developing countries.
The "social clause" proposed by the United States and other
western countries to the multilateral trade agreement to govern
labor standards is expected to dominate the five-day meeting
staged by the Non-Aligned Movement.
Such a clause could provide for the restriction or prohibition
of imports from countries or industries, which do not adhere to
stipulated labor standards, hurting the exports of developing
nations.
"Upgrading labor standards is an ongoing process in many
developing countries," Rao said in his opening speech to
delegates. "But it is a different matter when trade policy is
linked to labor standards."
Trade policy should not be made an instrument to dictate
labor standards, the 73-year-old Indian premier said.
He said the issue should be governed by the code set out by
the International Labor Organization rather than the multilateral
trade agreement, and called for "non-coercive compliance to
labor standards."
Soeharto
Soeharto, chairman of the Non-Aligned Movement, said in the
message read out by Indonesian Minister for Manpower Abdul Latief
that a trade-labor linkage could "directly or indirectly reduce
the export of developing countries."
He urged developing nations to forge a common stand and to
strive to improve the life of their workers so the issue will not
be used as a "pretext in limiting our participation in world
trade."
Participants in the Uruguay Round of trade negotiations, which
led to the formation of the World Trade Organization, have left
the issue of the "social clause" open.
Advocates of the clause say it is needed for "social progress"
keeping pace with economic progress and that industrial countries
would otherwise be seen as collaborating in the exploitation of
workers in developing countries.
It is also designed to ensure a level playing field so
developing countries do not gain an unfair trade advantage
through cheap labor, they say.
Developing nations have argued that the advantage is tilted
heavily in favor of rich countries because of superior
technology, economies of scale and access to finance and
marketing.
The enforcement of the proposed social clause would only make
third world producers more uncompetitive and reduce employment,
they say.
"The waking up of the Asian giants would seem to be causing
uneasiness in the competitive world consequent on which new forms
of readjustment of economies are being advocated by the affluent
part of the world," said Indian Labor Minister P.A. Sangma.
Heribert Maier, deputy director general of the International
Labor Organization, said both developed and developing nations
needed to respect fundamental labor standards.
"No country should accept, or be seen, building its
competitive advantage on the basis of a less than fair treatment
of its workers," Maier said in his speech, calling for a
consensus on the dispute.
Delegates to the conference, which ends Monday, will also
discuss issues such as the world trade scenario, employment
trends in developing countries, strategies for creating jobs and
the impact of economic reforms on labor.