The Hindu : Push for labour standards

Online edition of India's National Newspaper
Wednesday, Sep 10, 2003

Opinion

Opinion - Editorials

Push for labour standards

The World Trade Organisation's ministerial meeting at Cancun from September 10 is set to face protests from influential trade unions from developed countries, which demand linking trade issues with labour standards. The question that needs to be faced squarely by developing countries is whether to continue to resist calls for linkage on the ground this is `protectionist' pressure from industries in the developed world. Actually, it is not so much manufacturing interests in developed countries as their labour constituencies, faced with increasing job losses as a result of movement of capital to countries with lower labour costs, that are keen to ensure that developing countries respect core labour standards. These standards, enshrined in the conventions and declarations of the International Labour Organisation, include the right to organise and to collective bargaining and the elimination of child labour and forced labour. Workers of developed countries fear that the less developed nations, ever eager to attract investment, will turn a blind eye to the denial of minimum rights to workers.

Such a fear is not without foundation. Several States in India have, until recently, indulged in a `race to the bottom' by granting lavish tax concessions to investors to woo them away from one another and thus compounded their fiscal troubles. Pressures are mounting on State Governments to relax labour standards, especially in special economic zones. It is true that India has put in place laws meant to protect worker interests in the matter of minimum wages, collective bargaining, safety and gender equality in the organised sector. However, these laws cover less than ten per cent of the total workforce. Also, many pieces of legislation such as the Factories Act and the law on minimum wages are hardly enforced where employers choose to flout them. Thus it would be very much in the interest of workers that India reviews its position and avoids rejecting outright any international covenant that would use the lever of trade to secure the minimum needs of workers. However, such a covenant should not be arbitrary. It should encourage a calibrated improvement in the observance of labour standards and discourage blatant disregard of labour interests. The improvement of labour conditions should be looked at as a driver of productivity rather than as an avoidable cost.

There are other dimensions to labour standards that should not be lost sight of. First, there is a growing response from consumers in developed countries to NGO calls for boycotting imported products that incorporate child labour or slave labour. These campaigns have induced many exporters in India to obtain certification of fair labour practices. Secondly, `globalisation' of labour standards is creeping in, not through the acrimony-ridden WTO, but through bilateral and regional trade agreements. In these `coalitions of the willing', put together in the sphere of trade by the United States and other developed countries, labour standards are made a part of the binding clauses. The developed countries are also trying to use unilateral trade concessions such as the Generalised System of Preferences (GSP) of the United States and the European Union and the Africa Growth Opportunities Act of the U.S. to stipulate minimum labour standards to be observed by the beneficiary countries. Thus links between trade and labour standards are a reality to a considerable extent. Indian trade unions can make good use of this global emphasis on labour rights irrespective of the motives behind the linkage. They should mount a campaign against child labour, which depresses the wages of adult workers by pitting them against children and, what is worse, deprives poor children of their basic rights to education and economic and cultural development.

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