Reconciling International Trade and Labor Protection

Why We Need to Bridge the Gap between ILO Standards and WTO Rules

Wolfgang Plasa - Preface by Mogens Peter Carl

Over the last two decades or so, a number of developing countries have become important suppliers of manufactured goods. A good deal of these goods are produced under extremely poor working conditions, incompatible with the fundamental rights and freedoms. However, WTO rules do not allow restrictions on imports of such goods, and the ILO hardly ever sanctions violations of international labor standards. On the one hand, this leaves exporting countries free to compromise on labor protection in order to enhance their competitiveness on foreign markets. On the other hand, importing countries are obliged to keep their markets open for goods produced under substandard labor conditions.

This gives rise to the question of whether the rules of the multilateral trading system should be linked to international labor standards. This study argues that there are two trade-related reasons for establishing such a link.

The first one is commonly referred to as social dumping. GATT rules enshrine the principles that should govern international trade: fairness and responsibility. These principles should also apply where trade meets labor protection. Exporting goods made under substandard labor conditions is unfair and distorts trade. It would therefore be consistent to make social dumping actionable.

The other reason concerns the responsibility of importing countries. Increased imports of goods produced under substandard labor conditions are an incentive for the exporting country to produce more goods under the same labor conditions, and ship them to the same importing country. This results in a proliferation of violations of labor standards, for which the importing country shares the responsibility. There is a need to adopt a link between trade and labor standards enabling the importing country to cap imports in order to escape the blame.

Lexington Books

Pages: 268 • Trim: 6 x 8¾

978-1-4985-2138-3 • Hardback • August 2015 • $109.00 • (£84.00)

978-1-4985-2140-6 • Paperback • April 2019 • $41.99 • (£32.00)

978-1-4985-2139-0 • eBook • August 2015 • $39.50 • (£30.00)

Subjects: Business & Economics / Economics / General, Business & Economics / International / General, Business & Economics / Labor

Reconciling International Trade and Labor Protection

Why We Need to Bridge the Gap between ILO Standards and WTO Rules

Hardback

Paperback

eBook

Summary

Over the last two decades or so, a number of developing countries have become important suppliers of manufactured goods. A good deal of these goods are produced under extremely poor working conditions, incompatible with the fundamental rights and freedoms. However, WTO rules do not allow restrictions on imports of such goods, and the ILO hardly ever sanctions violations of international labor standards. On the one hand, this leaves exporting countries free to compromise on labor protection in order to enhance their competitiveness on foreign markets. On the other hand, importing countries are obliged to keep their markets open for goods produced under substandard labor conditions.

This gives rise to the question of whether the rules of the multilateral trading system should be linked to international labor standards. This study argues that there are two trade-related reasons for establishing such a link.

The first one is commonly referred to as social dumping. GATT rules enshrine the principles that should govern international trade: fairness and responsibility. These principles should also apply where trade meets labor protection. Exporting goods made under substandard labor conditions is unfair and distorts trade. It would therefore be consistent to make social dumping actionable.

The other reason concerns the responsibility of importing countries. Increased imports of goods produced under substandard labor conditions are an incentive for the exporting country to produce more goods under the same labor conditions, and ship them to the same importing country. This results in a proliferation of violations of labor standards, for which the importing country shares the responsibility. There is a need to adopt a link between trade and labor standards enabling the importing country to cap imports in order to escape the blame.

Details

Lexington Books

Pages: 268 • Trim: 6 x 8¾

978-1-4985-2138-3 • Hardback • August 2015 • $109.00 • (£84.00)

978-1-4985-2140-6 • Paperback • April 2019 • $41.99 • (£32.00)

978-1-4985-2139-0 • eBook • August 2015 • $39.50 • (£30.00)

Subjects: Business & Economics / Economics / General, Business & Economics / International / General, Business & Economics / Labor

Author

Wolfgang Plasa is a former official of the European Commission.

Table of Contents

Introduction: What This Book Is About

Chapter 1. The Institutional Framework

Chapter 2. The Framework of the Discussion

Chapter 3. Linking Trade to Labor Standards for Non Trade-Related Reasons

Chapter 4. Linking Trade to Labor Standards for Trade-Related Reasons

Chapter 5. Alternative Approaches

Chapter 6. Links in the Trade Regimes and Arrangements

Chapter 7. The Shape of the Links Proposed in this Study

Chapter 8. Objections to Linking Trade and Labor Standards

Chapter 9. Additional Benefits of Linking Trade and Labor Standards

Chapter 10. Getting Agreement on Linking Trade and Labor Standards

Chapter 11. My Own Proposals

Final Remarks

Summing Up

Reviews

This book shows what can be done against the deplorable working conditions in many developing countries that we encourage when buying vast quantities of imported goods produced in conditions that would not be unfamiliar to Dickens. It is, however, not yet another incendiary, bleeding heart pamphlet but the opposite of a dogmatic treatise, far away from the one-track-mind approach that has led so many worthy causes to defeat. It should be read by anyone concerned about the impact of our actions or inactions on the rest of the world, and especially by those who can influence public or private policy- and decision-making.
— Mogens Peter Carl

Mr. Plasa's book is, to my knowledge, the most comprehensive study of every aspect of the trade labor relationship. It shows the price that workers have paid for the sake of trade and corporate interests. I have the greatest respect for this extraordinary piece of work that should be brought to everybody's knowledge.
— Hervé Jouanjean, European Commission