Foreign Policy In Focus - What's This Organization (WTO): WTO Structure

What's This Organization (WTO):
An Annotated Glossary of Terms and Concepts
About the World Trade Organization

By Tom Barry, Codirector Foreign Policy In Focus

IV. Trade & Labor at WTO

Part 4of a new FPIF report, What's This Organization (WTO): An Annotated Glossary of Terms and Concepts about the World Trade Organization, written by Tom Barry, FPIF codirector.

(Editor's Note: The following description of trade and labor issues is part of a larger FPIF document called: "What's This Organization (WTO): An Annotated Glossary of Terms and Concepts about the World Trade Organization." Other parts of this document, whose online version will be constantly updated and revised, include: Key Concepts, Social Issues, WTO Agreements and Related Issues, and Developing Country Issues. Your comments, suggested changes, and criticisms are encouraged.)

Advisory Committee for Trade Policy and Negotiations (ACTPN):
This is a 35-member advisory group, created by the 1974 trade act to advise the President on trade issues. Its members are mostly U.S. transnational corporations, although it also includes several nongovernmental representatives including the AFL-CIO and the U.S. Chamber of Commerce. On October 25, ACTPN wrote a publicly released letter to the president expressing support for the administration's negotiating agenda at the WTO, calling it "bold and appropriately comprehensive." The letter's signatories, including Jay Mazur of UNITE!/AFL-CIO and John Sweeney of AFL-CIO, agree that "the WTO is the appropriate forum to expand new trade opportunities, reduce trade barriers, and enforce existing trade agreements through a rules-based regime." A key component of the letter for U.S. labor was the statement: "We agree that a successful conclusion to the negotiations must generate broadly shared benefits for the U.S. economy and its citizens, and to that end the agenda calls for increasing transparency, openness and accountability within the WTO; strengthening the dispute settlement procedures; continuing to work within the WTO to foster win-win strategies for trade and the environment, and, as mandated by statute, seeking to establish a working party in the WTO on core labor standards and trade." The U.S. government must further ensure that any agreements address the relationship between trade and labor are finally gaining attention. This is happening "only because they understand that failure to address these concerns will guarantee continued stalemate in trade policy." ACTPIN committee member Lenore Miller, president of the Retail, Wholesale & Department Store Union, declined to sign the controversial letter, as did the representatives from the environmental and consumer organizations.

AFL-CIO Position on U.S. Negotiating Agenda:
Although by signing the letter the AFL-CIO did join in expressing broad support for the U.S. negotiating position, the labor federation has declared its opposition to aspects of the U.S. government's agenda. According to Sweeney, it does not support "efforts to open new service sectors to international trade and major new negotiations on market access in the absence of progress on workers' rights." It does support these elements: seeking to establish a working group on trade and labor, taking steps to make the WTO more transparent and accountable (including timely derestriction of documents and opening dispute settlement panels to the public), seeking to address environmental problems, and rejecting proposals to reopen the Antidumping Agreement.

AFL-CIO Position on Global Economy Rules:
The AFL-CIO's position on globalization is articulated in a resolution (New Rules for the Global Economy) passed by the federation's 1999 national convention. In summarizing this resolution and in response to concerns about expressing support for the U.S. negotiating position, Sweeney said: "Our critique of the WTO and the world trading system is both broad and deep, and our demands in Seattle are strong: we want the WTO to incorporate enforceable rules protecting workers' rights and the environment, to open up its operations to give workers and other civil society representatives a meaningful voice, and to significantly overhaul its rules on safeguard protections and overturning legitimate national regulations on public health and the environment."

Developing Countries Position:
Developing countries reject attempts by the U.S. to insert labor rights issues into the WTO agenda, believing they will be used for protectionist purposes and would be used to meddle in domestic political affairs. At the August 1999 meeting of the G-15 (a group of 15 developing countries including Mexico, Algeria, Indian, Chile, Argentina, Brazil, and Egypt), the trade ministers stated that the labor standards issue had been dealt with adequately in Singapore and decided "to resolutely oppose any renewed attempt to raise this issue in the WTO." Generally, it is the position of developing countries that the WTO should first address the implementation of Uruguay Round agreements to increase market access to developed countries (by ending protection of agricultural and clothing markets) and increase the special treatment of developing countries through more technical assistance and exemptions from some trade rules. They would like the next round of trade negotiations to be a Development Round. Neither the U.S. government, business, labor, or the nongovernmental activist community have expressed support for proposals by the EU and groups of developing countries that the WTO members that are developed countries grant increased market access to produce and goods exported by developing countries.

EU Proposal:
As a way of introducing labor issues into trade negotiations, the EU proposes the creation of a Joint ILO/WTO Standing Working Forum as a way of promoting better understanding of trade and labor issues. The Joint Forum, which unlike a working group would not have official standing within the WTO, would prepare for a WTO ministerial meeting on labor by 2001. Other elements of the EU proposal are: positive incentives offered by WTO to promote respect for core labor rights, increased WTO dialog with affected sectors of civil society, opposition to any sanctions-based approach to promoting labor rights, rejection of initiatives that would use labor rights for protectionist purposes, and the enhancement of labor rights by improving market access for developing country exports rather than applying trade-restrictive measures. Also, with respect to labor rights and conditions in developing countries, the EU agreed that the comparative advantage of countries, particularly low-wage developing countries, must not be threatened by measures designed to improve labor standards.

Labor Working Group:
According to U.S. Trade Representative Barshefsky, the working group that the U.S. government proposes would not address the enforcement of core labor rights but focus on analyzing such issues as job growth and trade, and the relationship between market opening and living standards. Both the AFL-CIO and the Chamber of Commerce have met criticism for signing the letter endorsing the working group. In the case of the Chamber of Commerce, some members oppose inserting labor issues into the trade forum even though the Chamber's Chief Executive Officer said that the working group would not violate Chamber policy because it is limited to a study. Teamster president James Hoffa criticized the AFL-CIO's decision to sign the ACTPN letter supporting the U.S. negotiating agenda, saying that the WTO should not be expanded because, among other reasons, "the trade panelists at the WTO take steps everyday that would subvert rights that are guaranteed by the U.S. constitution."

U.S. Negotiating Agenda:
The U.S. goes to the Seattle Ministerial seeking increased trade liberalization (increased market access and reducing market distortions) for U.S. agricultural and industrial products. In services, the U.S. Trade Representative is seeking to expand market access for U.S. services and a commitment for national treatment of U.S. service providers. The U.S. does not want the WTO to address competition policy and investment policy, and opposes demands, particularly from developing nations, that the Antidumping Agreement be reopened.

U.S. Proposal:
The U.S. has submitted a proposal to the WTO that a Working Group on Trade and Labor be established. If accepted (unlikely because of the strong and united opposition of developing countries) at the Seattle ministerial meeting, this working group would in two years produce a report for ministerial consideration. The work of the group would be limited to the following issues: trade and employment (impact of increased trade and investment on levels of employment); trade and social protections (relationship between economic liberalization and social protections); trade and core labor standards; child labor; and trade and derogation of national standards. According to the U.S. proposal, the establishment of the working group is consistent with "the underlying principle of the WTO that the future expansion of trade can support improved opportunities for the greatest number of people."

Singapore Ministerial:
In response to a U.S. call for increased WTO consideration of the relationship between trade and labor, the ministers expressed their commitment to the observance of internationally recognized core labor standards and supported WTO and ILO collaboration (while at the same time noting the different mandates of the two entities). The U.S. has been virtually alone in calling for inclusion of labor rights issues within the WTO, and in 1996, after calling for the establishment of a working group, signed on to the following declaration: "The International Labor Organization is the competent body to set and deal with [internationally recognized labor] standards, and we affirm our support for its work in promoting them. We believe that economic growth and development fostered by increased trade and further trade liberalization contribute to the promotion of these standards. We reject the use of labor standards for protectionist purposes, and agree that the comparative advantage of countries, particularly low-wage developing countries, must be no way put into question."

Uruguay Round Implementing Bill:
In approving the UR in 1994, the U.S. Congress instructed the president to seek the creation of a working party to examine the relationship between respect for internationally recognized labor rights and the WTO.

WTO Committees and Working Groups:
The proposed labor working group would be among three other working groups: Relationship between Trade and Investment, Interaction between Trade and Competition Policy, and Transparency in Government Procurement. It would not have the permanent status of the WTO major committees, which in addition to sponsoring studies host symposiums and make recommendations. In this respect, the working group on labor would have less status and impact than the newly established Committee on Trade and Environment (CTE). Other WTO committees are Trade and Development, Regional Trade Agreements, Balance of Payments Restrictions, and Budget and Finance.