The World Trade Organization and Labour Rights: Man Bites Dog
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Like other post-World War II international economic institutions, the multilateral trading system ( the General Agreement on Tariffs and Trade) was an integral part of “embedded liberalism”—it was the trade trading system of that era, a counterpart to the progressive, interventionist welfare state; in other words, to a particular political and social vision, including at the same time respect for diverse ways of implementing this vision. The general kinds of worker protection that emerged from the Depression and the New Deal era, whether in America or Europe, were largely assumed as an acquis by this “embedded liberalism,” but this went hand in hand with the notion that the trading regime should be based on deference of states to each other's different approaches to, or cultures of, domestic regulation. Thus, an early dispute settlement ruling in the GATT, Belgian Family Allowances, rejected the notion that an importing country could, consistent with the letter and spirit of the GATT, make the treatment of important products depend on the exact nature of the system of social protection in the exporting state. More generally, the era of “embedded liberalism” was one where increasing “progressive” domestic regulation in a wide range of fields went hand in hand with deep cuts in tariff protection brought about through negotiating rounds in the GATT. The combination of progressive government domestically with negotiated multilateral trade liberalization produced extraordinary levels of growth, and improvements in living standards in the countries that were key founding members of the GATT. As embedded liberalism in the developed world began to unravel due to the economic pressures and changes of the 1970s and 1980s (the end of the gold standard, stagflation, etc….), the GATT dramatically expanded its membership to countries with the most diverse social economic and political conditions. The implicit normative floor for multilateral trade liberalization, supplied in “embedded liberalism” by a broad overlapping consensus on the post-New Deal regulatory and welfare state, did not apply in these new conditions, both because it was no longer apparent that one could avoid trade offs between domestic interventionism and open global markets, and also because large numbers of countries were welcomed as members of the multilateral trading system, without any attention to whether they shared even a minimalist conception of appropriate domestic public interest regulation. It is this legacy that has framed the fundamental divide today that is referred to as the “trade and labour debate”. Should there be a normative floor for international economic transactions (as there is domestically in every developed liberal democracy, even if in some cases (the US) it is rather minimal)? Those who believe in such a floor do not (despite what is sometimes claimed by their opponents) seek to define it in terms of one domestic system's standards; rather, policy divergence, in the post-“embedded liberalism” world is assumed, and it is international human rights, a movement that interestingly emerged at the same time as the collapse of the implicit normative floor of embedded liberalism, that provides the guiding idea; the International Labour Organization, increasingly, has had its focus shifted to defining a human-rights based normative floor for globalisation (as expressed in the idea of “Core” labour rights). Although the Membership of the WTO accepted in the 1996 Singapore Declaration the concept of such a “normative floor”, it did so on the basis of de-linkage of the normative floor from the institutions and functioning of the WTO itself, while assuming that WTO law was and should be an obstacle to enforcing the floor through trade sanctions. It has equally been apparent that the WTO has not, for example, sought to make compliance with the floor a condition for accession of new countries to the WTO. Underlying the WTO position has been a narrative of globalisation, widely shared among the trade policy elite, and consistent with the overall neo-liberal ideology, that puts in question the normative floor and indeed views it as antithetical to economic development: development comes through a Darwinist process of opening a countries' markets to cut-throat global competition and allowing the winners to survive; in this process entire generations of workers and their rights and well-being may have to be sacrificed to progress and growth. On this view labour standards have often been characterized as producing “rigidities” in markets and frustrating development. Labour rights are thus a cost and a tax upon development—one which international investment will seek to avoid and which rational governments should refrain from imposing. Labour rights are a set of luxury goods to be purchased with the wealth generated by growth and after the event.
Source Publication
Social Issues, Globalisation and International Institutions: Labour Rights and the EU, ILO, OECD, and WTO
Source Editors/Authors
Virginia A. Leary, Daniel Warner
Publication Date
2006
Recommended Citation
Howse, Robert L.; Langille, Brian; and Burda, Julien, "The World Trade Organization and Labour Rights: Man Bites Dog" (2006). Faculty Chapters. 869.
https://gretchen.law.nyu.edu/fac-chapt/869
