Labour and Trade-Related Regulation: Beyond the Trade-Labour Standards Debate?
| Author | Rorden Wilkinson |
| Published date | 01 June 1999 |
| Date | 01 June 1999 |
| DOI | http://doi.org/10.1111/1467-856X.00009 |
| Subject Matter | Article |
Vol. 1, No. 2, June 1999, pp. 165–191
Labour and trade-related regulation:
beyond the trade-labour standards debate?
RORDEN WILKINSON
Abstract
As well as consolidating and enhancing the process of trade liberalisation, the completion of
the Uruguay Round of Multilateral Trade Negotiations establishing the World Trade Organ-
isation (WTO) formalised the expansion of multilateral trade regulation into areas of com-
mercial activity previously deemed to be trade-related. This expansion, however, has been
highly uneven, privileging the needs of capital, and to a much lesser degree land, over labour.
Attempts to secure a degree of regulatory protection for labour in the legal framework of
the WTO—by requiring that the Organisation’s members adhere to a set of core labour stand-
ards when engaged in trade-producing activities—have so far failed. Both the Singapore
(1996) and Geneva (1998) Ministerial Meetings of the WTO witnessed discussion of this
issue, yet neither resulted in a comprehensive and satisfactory outcome for labour. That said,
significant opportunity exists for the reconstruction of the trade-labour standards debate
within the WTO. This article, seeks to demonstrate how this might be the case. In doing so,
it first reviews the process of General Agreement on Tariffs and Trade (GATT )/WTO involve-
ment in the regulation of trade-related areas. Second, it explores the current deadlock that
characterises the issue of trade and labour standards within the WTO’s legal framework as
well as the more significant positions that have emerged among the Organisation’s member-
ship by focusing on British, US and EU involvement in this issue. Third, it identifies the
reactions of certain key member states to the protests of civil society at the 1998 Geneva
Ministerial Meeting of the WTO as the means by which the issue of trade and labour stand-
ards may once again be raised. And finally, it considers how the effective regulation of
labour standards might be made within the confines of the WTO’s legal framework by
examining a range of options.
© Political Studies Association 1999. Published by Blackwell Publishers, 108 Cowley Road, Oxford OX4 1JF and
350 Main Street, Malden, MA 02148, USA
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Rorden Wilkinson
The second Ministerial Meeting of the World Trade Organisation (WTO),
which took place in Geneva in May 1998, witnessed increasing disquiet
among non-governmental organisations and grass-roots movements about
the nature and further expansion of the multilateral trade agenda (Financial
Times 1998a). The concerns of the protesters present at the Ministerial
Meeting broadly revolved around three issues: first, the lack of trans-
parency and accountability in WTO working procedures; second, the lack
of adequate environmental provisions in the existing legal framework of
the WTO; and third, the WTO’s failure to incorporate certain social pro-
visions, directed at securing the rights of workers, into its legal framework.
Common to all these issues is the concern that multilateral trade regulation
is rapidly expanding into selected areas of economic activity at an alarming
rate, while other areas, primarily those dealing with the social con-
sequences of increased trade liberalisation, are conspicuously ignored.
This uneven expansion in trade regulation has been an intrinsic part of
WTO activities since its inception. The completion of the Uruguay Round
(1986–94) of multilateral trade negotiations and the subsequent estab-
lishment of the WTO has expanded intergovernmental regulation beyond
the traditional sphere of trade in goods, to include such areas as trade in
services, intellectual property rights and investment measures. But this
expansion has not been simply a movement into other areas of trade. The
nature of this regulation has also undergone a significant change. Under
the auspices of the General Agreement on Tariffs and Trade (GATT), inter-
governmental trade regulation was primarily concerned with the construc-
tion of rules directed at the liberalisation of trade flows among participating
states. However, the results of the Uruguay Round have ensured that trade
regulation has taken on another form. While the WTO still places a great
deal of importance on liberalising world trade, and constructing and modify-
ing rules to that end, there has also been a general movement towards the
regulation of trade-related areas; that is, those aspects of the production
process that are intrinsic to the production of goods and services for trade,
but in themselves do not constitute, in the normal sense, tradable entities.
For example, of the major agreements negotiated during the Uruguay
Round, only the General Agreement on Trade in Services (GATS) has fol-
lowed the traditional GATT format of trade liberalisation. This is in con-
trast to the Agreement on Trade-Related Aspects of Intellectual Property
Rights (TRIPs) and the Agreement on Trade-Related Investment Measures
(TRIMs) both of which have sought to regulate areas related to trade.
Furthermore, the nature of this trade-related regulation is such that it
introduces, rather than removes, elements of protectionism. The TRIPs has
166
© Political Studies Association 1999.
Labour and trade-related regulation
been constructed to endorse and safeguard the international ownership of
intellectual property; and the TRIMs has been developed to free up the
flow of investment from capital-rich to capital-scarce countries. As such,
neither the TRIPs or the TRIMs seek to affect a direct expansion in the
volume and value of trade, rather they aim to facilitate the establishment
of an environment conducive to the expansion of trade by regulating
capital in a particular manner.
The extension of trade-related activities by the WTO has not, however,
been confined to the regulation of capital in the form of intellectual prop-
erty and investment. Measures adopted during the Uruguay Round have
sought to regulate land, in the form of environmental provisions, in a com-
parable manner.1 The objective of sustainable development, as enshrined in
the preamble to the Agreement Establishing the World Trade Organisation,
the accompanying Ministerial Declaration on Trade in Services and the
Environment and the Ministerial Decision on Trade and the Environment,
all aim to regulate land, though at a much lower level than that offered to
capital, in a manner compatible with the establishment of an environ-
mentally conscious global trading system.
The plight of labour, the third factor of production, has not, however,
faired as well as its counterparts. Other than a brief note in Paragraph (e)
of Article XX of the GATT,2 nowhere in the legal structure of the WTO are
there provisions designed to regulate labour in a manner comparable to
capital and land. Furthermore, despite continued attempts to put labour
issues on the multilateral trade agenda, the organisation has made it clear
that it will not seek to modify its legal framework to include any degree of
labour regulation, nor will it seek to extend its regulatory coverage into
this area in the near future. This perhaps comes as no surprise to those that
have long argued that economic liberalism seeks to protect capital and to
a lesser degree land, while marginalising labour. Nonetheless, there is a
significant debate surrounding the linkage of trade to some kind of labour
protection (Hughes and Wilkinson 1998; Lee 1997; Langille 1997;
Haworth and Hughes 1997; Maskus 1997; OECD 1996; Fields 1995; US
Department of Labor 1994; Charnovitz 1987). Such a linkage aims to safe-
guard certain basic standards of labour in exporting countries, safeguards
comparable to those attributed to land and capital, enabling workers to
enjoy the ‘fruits’ of trade liberalisation (OECD 1996, 6–13; International
Labour Organisation 1997; Haworth and Hughes 1997, 180; Fields 1995,
10–13, 21–22). These labour standards would ensure that states adhere to
certain core International Labour Organisation (ILO) conventions, relating
to freedom of association, the right to collective bargaining, the prohibition
© Political Studies Association 1999.
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Rorden Wilkinson
of forced labour, restrictions on the usage of child labour and non-
discrimination in employment,3 when engaged in the production of goods
and services for trade.
This article, building on the assumption that the process of multilateral
trade regulation must be critically engaged with as a means of ensuring a
degree of protection for labour in the face of continued liberalisation, seeks
to assess the future of a linkage between trade and labour standards within
the legal framework of the WTO in the aftermath of the recent Geneva
Ministerial Meeting. As a means of achieving this, it first reviews the pro-
cess of GATT/WTO involvement in the regulation of trade-related areas.
Second, it explores the current deadlock that characterises the issue of
trade and labour standards within the WTO’s legal framework, as well as
the more significant positions that have emerged among the organisation’s
membership by focusing on British, US, and EU involvement in this issue.
Third, it identifies the reactions of these Member states to the protests of
civil society at the Geneva Ministerial Meeting as the means by which the
issue of trade and labour standards may once again be raised. Finally, it
considers how the effective regulation of labour standards might be made
within the confines of the WTO’s legal framework by...
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