Setting the record straight: free trade, NGOs and the WTO

At the Singapore Ministerial Council in December 1996, member governments agreed that International Labour Organisation (ILO) ‘core’ labour standards should be observed. But it was also recognised that economic growth and development, fostered by increased trade and trade liberalisation, would promote these standards. The Ministerial Council therefore rejected the protectionist sentiment behind calls for labour standards and agreed that the comparative advantage of developing countries in labour-intensive production should be safeguarded.

Developing countries are also opposed. They do not want first world standards for the environment, labour, intellectual property, industry, and social welfare if the cost is deeper poverty, slower growth and more dependence on OECD charity.

Anti-globalisation NGOs express concerns about the political rights of minority groups, including citizens of developing countries, yet the standards they demand are seldom helpful to the poor in non-OECD countries. Mexico’s former President, Ernesto Zedillo, expressed this concisely after the Seattle meeting when he said:

"A peculiar alliance has recently come into life. Forces from the extreme left, the extreme right, environmentalist groups, trade unions of developed countries and some self-appointed representatives of civil society, are gathering around a common endeavour: to save the people of developing countries from—development." (quoted in Lukas 2000)

The environmental lobby

Punitive trade policies designed to punish developing countries that do not adhere to the standards of high income countries would only increase the very gap between rich and poor nations for which the NGOs blame the WTO.

Uniform standards would not allow for differences in income levels, cultural and community priorities, climate and geography, demographic structures, industrial structures, etc. They would erode national sovereignty.

Legitimate transnational environmental differences should be addressed through global environmental agreements. Imposing trade sanctions on poor countries that do not comply with prescribed production methods or environmental standards would divert resources from development, which, perversely, would increase pressures on the environment.

As economic progress raises living standards, it also tends to raise national environmental standards as more resources can be devoted to reducing environmental degradation. Using trade sanctions as a punitive instrument would reduce trade and growth, and probably increase environmental damage.

The labour lobby

Linking labour standards—i.e. uniform conditions of employment—to WTO sanctions would increase protectionism. Labour unions in rich countries with declining industries do not try to disguise this basic fact.

Since the ILO is already charged with raising labour standards around the world, the only reason to introduce labour standards into the WTO is to gain additional leverage through trade sanctions.