WTO Discussions, and Decisions on Labour Standards

At the Multilateral level, every member of the WTO is committed to a narrower set of internationally recognized core labour standards namely freedom of association, no forced labour, no child labour, and no discrimination at work (including gender discrimination). Previously, at the Singapore Ministerial Conference, WTO members did identity the International Labour Organisation (ILO)  as the [competent] body mandated to negotiate [labour ] standards. The  ILO is described as the only ‘the  only tripartite U.N. agency, since 1919 the ILO brings together governments, employers and workers members who currently stand at 187.

There are not hard and fast [ WTO] rules in labour. However, in the discussions around labour standards, for key questions have elicited debate. First is the  analytical question: if a country has lower standards for labour rights, do its exports gain an unfair advantage? Would this force all countries to lower their standards, a concept often referred to as ‘Race to the Bottom’.  Second is response question: if there is a “race to the bottom”, should countries only trade with those that have similar labour standards? Third is rules question: Should WTO rules explicitly allow governments to take trade action as a means of putting pressure on other countries to comply? Finally, fourth is the institutional question: is the WTO the proper place to discuss and set rules on labour — or to enforce them, including those of the ILO? See more  on these  discussions here.

Labour standards have previously been subject of the WTO Disputes . In the EC — Tariff Preferences case, India requested consultations with the EC concerning the conditions under which the EC accords tariff preferences to developing countries under its current scheme of generalized tariff preferences (“GSP scheme”). In this case, India contended  that the tariff preferences accorded by the EC under the special arrangements, (i) for combating drug production and trafficking and (ii) for the protection of labour rights and the environment, created  undue difficulties for India’s exports to the EC, including for those under the general arrangements of the EC’s GSP scheme, and therefore  impaired  the benefits accruing to India under the most favoured nation (MFN0) provisions of Article I:1 of the GATT 1994 and paragraphs 2(a), 3(a) and 3(c) of the Enabling Clause.

Labour Standards in WTO Plus Trade Agreements

Recently concluded trade deals have been giving prominence to labour standards and essentially addressing the rules and institutional question. In these trade pacts, the approach by the US on labour standards stand out.  The United States-Mexico- Canada Agreement(USMCA), negotiated to replace USMCA, the North America Free Trade Agreement (NAFTA) has  a labour standards provisions in Chapter 23. Article 23.3 states that’ “Each Party shall adopt and maintain in its statutes and regulations, and practices thereunder, the following rights, as stated in the ILO Declaration on Rights at Work”. It all addresses forced labour, migrant workers, discrimination at the workplace. Further, it establishes a ‘Labour Council. There are different views regarding making labour standards a core part of FTAs.  One of the arguments [ for the inclusion] is that labour chapters improve supply chain resilience. Kevin Kolben notes that the most evident labour risk in supply chains is labour disputes that disrupt production. For more see his essay ‘Labor chapters improve supply chain resilience: The case of the USMCA’

Labour standards in North- South Bilateral Trade pacts.

The US- Morocco FTA has a chapter on labour standards essentially providing that Each Party shall strive to ensure that such labour principles and the internationally recognized labour rights. It does Neither Party shall fail to effectively enforce its labour laws, through a sustained or recurring course of action or inaction, in a manner affecting trade between the Parties. Further, the FTA expects the US and Morocco not to waive or otherwise derogate from, or offer to waive or otherwise derogate from, such laws in a manner that weakens or reduces adherence to the internationally recognized labour rights.

The  Economic Partnership Agreement Between Kenya and The United Kingdom  indicate that within five years upon its entry into force, the UK and Kenya would  to conclude negotiations on trade, environment and sustainable development  There are no further specific provisions concerning labour in the Agreement although several provisions underline the need for the Parties to take into account social impacts and promote livelihood security.

The ongoing negotiations in the United States-Kenya Strategic Trade and Investment Partnership (STIP) has labour related standards. These include enforcement of and compliance with labour laws, promotion of social dialogue, and cooperation in other areas of mutual interest on labour and employment priorities, including with respect to forced labour in global supply chains.

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