Stake Of Labor And WTO
Stake of Labor in the WTO Seven years of trade negotiations at last gave birth
to the World Trade Organization (WTO) in 1995, the U.S. labor movement was one
of its leading skeptics. A world trade organization, labor supporters argued,
would only accelerate the headlong rush to laissez-faire by dismantling national
regulations. It would overwhelm attempts by nations to defend living standards
and the ability of unions to fight for wages and health and safety laws—and it
would make it harder for nations to defend the rights of workers to join unions.

Labor lobbied hard against the WTO. But now, ironically, the WTO could become a
critical venue for advancing workers\' rights worldwide. For the WTO has the
power to review nations\' domestic laws that create unfair trade advantages
including, potentially, labor laws. The WTO could define fair trade to include
labor standards. Such linkage would be a historic change in the world\'s trading
regime, and labor\'s stake in it. The idea of linking labor rights with trade
policy has been around since shortly after World War II when efforts to create
an international trading regime began in earnest. However, the WTO represents
the first opportunity since 1948 to give the issue serious attention. Proponents
of linking labor rights to trade rules build on the conventional case for free
trade. For international commerce to be free, markets within countries must not
be rigged to encourage exports and discourage imports. This is the fundamental
principle of free trade and it is the central precept of the WTO. Labor markets
are a special case, because they are not conventional free markets. Minimum-wage
laws and guarantees of free collective bargaining change the wages that market
forces might otherwise produce. But the economic mainstream in advanced
industrial countries has long accepted that some regulation of wages and working
conditions can enhance overall economic efficiency, as well as fairness. If
employers are compelled to treat workers decently, they will deploy them more
productively. By that logic, certain labor practices common in undemocratic
countries, such as child labor, prison labor, and denial of the right to form
unions, can be seen as unfair trade practices—and, potentially, violations of

WTO principles that trade should reflect acceptable rules of market competition.

Since wages affect all traded products and services, labor issues are central to
the ultimate credibility of the WTO as the arbiter of a consistent rule-based
international trading system. To the extent that wages are artificially held
down because labor rights are abrogated, an indirect subsidy is extracted from
these workers by their governments\' policies, which arguably violate the WTO\'s
free trade philosophy. During the WTO\'s second-year review in late 1996 in

Singapore, the United States actively sought to link labor rights with trade.

However, this effort was blocked by a coalition of Third World nations (who saw
the initiative as a form of protectionism) and the European Union (which was
then dominated by conservative governments). Nonetheless, the attempt put the

U.S. government on the side of trade-labor linkage and forced WTO members to
officially consider the issue of linkage for the first time. Even Sir Leon

Brittain, the Thatcherite vice-president of the EU who actively opposed
trade-labor linkage, was compelled by sister EU governments to affirm that
"labor standards and other apparently domestic political issues are now the
legitimate concern of the WTO because they are concerns of our
constituents." The United States, according to the U.S. Trade

Representative\'s office in Geneva, will continue pushing for linkage. THE

ORIGINS OF THE WTO Established in the wake of World War II, the WTO\'s
predecessor, the General Agreement on Tariffs and Trade (GATT) formed the third
pillar of the Bretton Woods system, which included economic development loans
through the World Bank and monetary stabilization via the International Monetary

Fund. While the IMF and the World Bank date to the original Bretton Woods
conference of June 1944, trade rules were first addressed in a 1946 meeting that
set tariff levels and developed a draft charter for an International Trade

Organization (ITO) that was presented at the 1948 UN Conference on Trade and

Employment in Havana. John Maynard Keynes, the original architect of the Bretton

Woods system, had hoped to develop worldwide trading rules that would avoid the
destructive protectionism prevalent during the Great Depression, while
preserving a commitment to full employment. The ITO charter contained sections
on employment, commodity agreements, business practices, international
investment, and services. However, the ITO was to be stillborn. And the
prominence of employment in the construction of the 1948 ITO would be lost in
the creation of the 1995 WTO. Between 1946 and