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

Implementing labour market reforms (minimum wages, health insurance, limits to working hours, rights of association, use of child labour, etc.) depends on raising living standards and productivity. Only that way are surpluses produced to finance social reforms.

The safest and surest way to promote labour standards in non-OECD countries is for OECD countries to remove all trade restrictions on labour-intensive imports. Yet these are the sectors where tariffs (and quotas) are still the most restrictive, because liberalisation would require adjustments from the workers and the unions. To prevent such structural adjustments, unions pursue labour standards in the WTO.

Introducing the ‘precautionary principle’ in WTO deliberations on the environment or attempting to find a new agreement on biodiversity would also be unwise when so many questions remain unanswered. In any case, developing countries have other priorities. Moreover, the ‘precautionary principle’ would be a blank cheque for opportunistic interventionism by NGOs, which would quickly undermine WTO agreements.

NGOs favour bureaucratic approaches. After all, lobbyists do not thrive in transparent markets. The larger the negotiating group, the greater their chance of being included. This is consistent with their commitment to ‘global governance’ built around the UN model.

The present agenda of the WTO is loaded with issues that lend themselves to the bureaucratic approach and large committees. This alone should convince WTO supporters that the agenda needs to be pruned and some subjects diverted elsewhere. The first task should be to remove outstanding weaknesses already identified in the multilateral trading rules and to improve enforcement procedures for dispute settlement.