The WTO’s Decision and the ILO

cigar factory cuba

The WTO’s Decision

Arguments concerning labor standards and the WTO came to a head in the 1996 Singapore Ministerial, where the WTO decisively stated that setting and enforcing labor standards did not fall within its domain. In Ministerial Declaration at the end of the conference, the Ministers asserted the following:

“We renew our commitment to the observance of internationally recognized core labour standards. The International Labour Organization (ILO) is the competent body to set and deal with these standards, and we affirm our support for its work in promoting them. We believe that economic growth and development fostered by increased trade and further trade liberalization contribute to the promotion of these standards. We reject the use of labour standards for protectionist purposes, and agree that the comparative advantage of countries, particularly low-wage developing countries, must in no way be put into question. In this regard, we note that the WTO and ILO Secretariats will continue their existing collaboration” (source).

In effect, this decision underlined the arguments of opponents to linking labor standards to the WTO listed above: (a) working conditions will improve faster through trade liberalization than by including international labor standards in the WTO, (b) incorporating such standards into the WTO would simply disguise protectionism, and (c) this would harm the comparative advantage of developing countries. Due to these reservations, the Singapore Ministerial delegated international labor standards to the ILO.

The ILO

In the Singapore Ministerial, the WTO named the ILO as the central  authority over international labor standards. The ILO responded to this charge with the 1998 Declaration on Fundamental Principles and Rights at Work. All Member States of the ILO must abide by these rules (whether or not they have ratified all of the Conventions of the ILO), which cover four specific areas:

  1. “Freedom of association and the effective recognition of the right to collective bargaining”
  2.  “The elimination of forced or compulsory labour”
  3.  “The abolition of child labour”
  4. “The elimination of discrimination in respect of employment and occupation” (source)

On an annual basis, Member States who have not yet ratified all ILO Conventions submit reports as to their progress in meeting these requirements. If some problem is preventing them from ratifying a Convention or reaching the given standard, states can request technical assistance from the ILO.

Thus, though labor standards have been codified in an international institution, several problems remain: there is no mechanism for enforcement of these standards and the standards themselves remain broad and too often violated. The ILO’s failure to fundamentally better working conditions around the world explains the continued agitation for labor standards to be included in the WTO, as seen, for example, at the Seattle Ministerial.