Non Trade Issues

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Non Trade Issues

• Shashank Priya
• Director, Trade Policy Division

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LABOUR ISSUES IN WTO

• On conclusion of UR, US raised the issue of
  linkage between trade and core labour standards
  (CLS)
• Indias proposal- relationship between trade and
  immigration policies be examined in WTO
• US did not pursue the issue further for sometime

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Singapore Ministerial Conference

• In 1996 SMC, US proposed to include labour
  standards as an agenda in the WTO but failed
• SMD endorsed the stand of DCs
• ILO is the competent body to deal with CLS and
  WTO affirms its support in promoting such
  standards
• It rejected the use of labour standards for
  protectionist purposes and agreed that the
  comparative advantage of countries, particularly
  low wage DCs must in no way be put into question
• WTO and ILO Sects. would continue their existing
  collaboration

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Seattle Ministerial Conference

• Concerted attempts by developed countries to
  include labour linkage in WTO agenda
• Proposals made for Working Party either inside or
  outside WTO
• Strong opposition by DCs led by India
• Seattle failed

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Post-Seattle Developments

• No formal proposals in WTO post-Seattle
• EU/US Summit meeting called for linkage
• Trade and Development Act 2000 passed in
  US-inclusion of forced/indentured child labour in
  definition of forced/indentured labour
• Linkage of CLS with GSP Scheme estd.-specifically
  ILO Convention 182 (Elimination of worst forms of
  child labour)
• UNCTAD X Conference of 2000 made no mention of
  any work relating to Trade and Labour

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Broad Stand of Countries

• US-set up a working group in WTO to deal with
  issues like Trade and Employment, Trade and
  Social Protection, including CLS particularly
  Child Labour. Favoured use of trade sanctions for
  non-implementation of CLS
• EC-have a joint ILO/WTO Working Forum on Trade,
  Globalisation and Labour issues outside WTO to
  promote dialogue between govt. employees, trade
  unions etc. Rejected use of trade sanctions

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Indias and other DCs Stand

• Fully committed to observance of CLS and
  promotion of labour welfare through domestic
  policies
• Issue of CLS at international level can be
  addressed only by ILO and not WTO
• Reject the concept of linkage between trade and
  CLS as it can be a protectionist device hindering
  the comparative advantage of low wage developing
  economies

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Indias and other DCs Stand (contd)

• Use of trade sanctions to implement CLS would be
  counter productive as this could aggravate lower
  standards and poverty
• Poverty is the root cause for lower commitment to
  CLS and cannot be tackled by trade sanctions
• SMD has clearly rejected the linkage
• ILO is taking effective steps to implement CLS.
  E.g. In 1999 the International Labour Conference
  unanimously adopted a Convention on the
  Elimination of Worst Form of Child Labour.

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Possible Consequences of including labour in WTO

• Possibility of trade sanctions being imposed by
  developed countries
• Comparative advantage of cheaper labour could be
  neutralised in small scale and handloom sectors
• Sovereignty of domestic laws could be compromised
• Use of extra territorial authority for
  enforcement of various CLS
• Possible resort to DSU for any violation of CLS
• Enhanced role for NGOs in WTO through backdoor
• Possibility of financial and technical assistance
  provided by developed countries, multilateral
  orgns, etc., being linked to adoption of CLS

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Doha Ministerial Declaration

• DMD reaffirmed the declaration made in SMD
  regarding internationally recognised CLS
• It took note of the work underway in the ILO on
  the social dimension of globalisation

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Core Labour Standards and ratification status in
India

• Convention No. 29 concerning forced
  labour-ratified
• Convention No. 111 concerning discrimination in
  employment and occupation-ratified
• Convention No. 100 concerning equal
  remuneration-ratified
• Convention No. 105 concerning abolition of forced
  labour-ratified
• Convention No. 87 concerning freedom of
  association-not ratified because of separate
  treatment of govt. servants

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Core Labour Standards and ratification status in
India

• Convention No. 98 concerning collective
  bargaining-not ratified because of separate
  treatment of govt. servants
• Convention No. 138 concerning minimum age of
  entry for employment-not ratified
• Convention No. 182 concerning elimination of
  worst forms of child labour-not ratified

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Trade and Environment debate

• Link between trade and environmental protection
  recognised since 1970s
• 1972 Stockholm Conference on Human Environment-
  GATT Sectt prepared a study titled Industrial
  Pollution Control and International Trade
  reflected concerns of green
  protectionism (environmental protection policies
  becoming an obstacle to trade)

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Trade and Environment debate (contd)

• This study led to creation of a Group on
  Environmental Measures and International Trade
  (EMIT group) in GATT in 1971
• The group to convene only at the request of
  Contracting Parties
• First request came only in 1991 by members of
  EFTA (Austria, Finland, Iceland, Liechstentein,
  Norway, Sweden and Switzerland)

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Why Environmental Issues became important by 1991?

• Tokyo Round Agreement on TBT tried to address the
  concern how environmental measures could create
  obstacles to trade-it called for
  non-discrimination in preparation, adoption and
  application of technical regulations and
  standards
• Concern of DCs regarding continued export of DPGs
  by developed countries to DCs

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Why Environmental Issues became important by 1991?

• Dispute between Mexico and US (1991) regarding US
  embargo on import of tuna from Mexico caught
  using purse seine nets which resulted in the
  incidental kill of dolphins-Mexico won the case
  in GATT
• A 1987 report of World Commission on Environment
  and Development called Our Common Future
  (Brundtland Report) identified poverty as one of
  the most important causes of environmental
  degradation- Pollution of Poverty could be
  combated by greater economic growth through
  increased international trade-term sustainable
  development coined

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Outcome

• EMIT group focused on effects on environmental
  measures (like eco-labelling schemes) on
  international trade, relationship between MTS
  rules and trade provisions in MEAs, and
  transparency of national environmental
  regulations with an impact on trade
• Ministerial decision of UR on Trade and
  Environment (April 1994) led to formation of CTE
  as a successor to the EMIT group

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CTE Agenda

• 10 Agenda items seek a balance of issues of
  interest to developing and developed countries
• Relationship between MTS provisions and trade
  measures in MEAs-EC proposed amendment to GATT
  Article XX to include protection of the
  environment as one of the exceptions to WTO
  rules status quo proposed by India, Egypt and
  Mexico ASEAN proposed further tightening of
  environmental exceptions to reduce disguised
  protectionism

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CTE Agenda (contd)

• Relationship between environmental policies
  relevant to trade with significant trade effects
  and the provisions of MTS-developed countries
  wanted to incorporate some principles of CBD in
  WTO like Rio principles 17 (encouraging
  environmental impact assessment) and 15
  (precautionary principle). India insisted on
  other principles like 7 (common but
  differentiated responsibility of nations towards
  environment) and 11 (equivalence in the wake of
  differential standards)

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CTE Agenda (contd)

• Relationship between MTS provisions and
  environment related border taxes and other
  requirements like standards, regulations,
  packaging, labelling etc.- India and some other
  DCs strongly oppose inclusion of npr-PPMs (
  non-product- related-Processes and Production
  Methods) in any manner in TBT Agreement. EC wants
  to include eco labelling schemes by an amendment
  to the TBT Agreement (npr-PPMs are measures that
  relate to processes that do not impart any
  distinguishing characteristics to the final
  product e.g. organic products produced without
  chemical fertilisers incorporated PPMs-pesticide
  free cotton)

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CTE Agenda (contd)

• Provisions of MTS with respect to transparency of
  environmental measures-US has suggested
  environmental reviews of national policies under
  TPRM. India- environmental reviews of trade
  measures are best done at the national level
• Relation between dispute settlement mechanism in
  MTS and MEAs- EC wants a decision in WTO that any
  action under an MEA would be considered as WTO
  compatible. India and other DCs do not favour
  such a a-priori decision

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CTE Agenda (contd)

• Effect of environmental measures on market
  access, particularly of DCs and environmental
  benefits of removing trade restrictions and
  distortions-discussion has centred around the
  issue og agricultural subsidy. India has proposed
  safeguarding the market access of DCs from
  unwanted trade effects of environmental policies
• Export of DPGs-African countries have demanded
  disciplines on developed countries to prohibit
  export of DPGs

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CTE Agenda (contd)

• Relationship of TRIPS Agreement to (a) TOT and
  development of environmentally sound technologies
  and (b) MEAs, which contained IPR related
  obligations-India has made two proposals (i)
  where environmentally sound technologies and
  products are mandated in national or
  international laws, right holder should be
  obliged to make them available on fair terms to
  DCs (ii) Harmonise different approaches towards
  biological materials and traditional knowledge in
  TRIPS and CBD (patent applicant to disclose
  source of origin of biological material or TK
  accessed for invention)

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Doha Mandate on environment negotiations

• Para 31 of DMD mandates negotiation on
• Relationship between existing WTO rules and
  specific trade obligations set out in MEAs
• Procedures for regular information exchange
  between MEA Sectts and the relevant WTO
  Committees
• Market access negotiations for environmental
  goods and services

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Doha Mandate on environment negotiations (contd)

• Para 32 of DMD mandates CTE to give particular
  attention to following agenda of its work
• The effect of environmental measures on market
  access specially in relation to DCs
• The relevant provisions of TRIPS
• Labelling requirements for environmental purposes

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