WTO SET FOR SHOWDOWN ON LABOUR RIGHTS by Guy de Jonquières in Berlin
The US set the stage at the weekend for a showdown in talks on the agenda for a new world trade round by tabling a controversial proposal that the World Trade Organisation should examine the links between international trade and labour.
The long-awaited US demand is expected to speed up the pace of debate and horsetrading in the WTO over plans to launch a round at its ministerial meeting in Seattle late this month.
"The US action means the rules of engagement are now in place," one trade diplomat said.
Developing countries, the vast majority of WTO members, have long condemned US efforts to raise the issue of labour rights as a pretext to legitimise protectionism. Arguments about the issue almost paralysed the WTO's ministerial conference in Singapore in 1996.
But while some developing countries, notably in Latin America, are against the US proposal, others are ready to consider it if offered trade concessions in return. "The question comes down to what the US is prepared to pay to get labour rights on the agenda," a diplomat in Geneva said.
Developing countries are lukewarm about launching a trade round and are seeking to set conditions for participating in one.
They want to lighten the burden of existing WTO obligations, such as enforcing rules on intellectual property protection and eliminating performance requirements for foreign direct investment.
Washington has hinted it is ready to be more flexible on these points.
However, other important developing country demands, notably for the dismantling of barriers to their textiles exports and curbs on anti-dumping measures, are fiercely opposed by politically influential US industry lobbies.
Diplomats say the task of winning support for the US proposal will be made harder by some governments' insistence that it be approved by an absolute consensus. That would require all WTO members to approve it, rather than allowing doubters to abstain.
The US wants a WTO working group to draw up in two years a report on the relationship between international trade and employment, social protection, core labour standards and forced or exploitative child labour.
It also wants the working group to examine the impact of derogations from national labour standards for purposes such as export processing zones.
Further, the US wants the WTO to grant observer status to the International Labour Organisation.
WTO members agreed three years ago that the ILO should remain responsible for labour standards, but that the two institutions should co-operate on the issue.
Washington says it wants labour rights on the WTO's agenda because they contribute to higher living standards.
But critics say the demand is simply a pay-off to US labour unions, on whose campaign funds Democratic candidates rely to fight elections.
Critics say US unions have systematically opposed trade liberalisation initiatives, such as the Uruguay Round agreement, and have lobbied hard for protection from imports of steel and other products from developing countries hit by emerging markets turmoil.