The debate over trade and labor standards is one of the most divisive in relations between industrial and developing countries. Concern about the impact of trade on workers is undermining support for trade liberalization worldwide. Ministerial meeting later this month in Seattle. The United States wants the WTO to establish a formal working group on trade and labor. Industrial country labor unions claim that low or poorly enforced labor standards violate the rights of developing country workers and threaten jobs and wages in industrial countries.
Unions often urge trade sanctions to enforce internationally recognized labor standards.
Developing country governments fear that linking trade with labor standards will give cover to protectionism and undermine their labor-cost comparative advantage. Free-trade advocates and most international companies worry that using trade measures to promote social and economic reform will jeopardize trade liberalization and the wealth it can create. Led by the United States, a handful of industrial country governments straddle the trade and labor debate, supporting trade liberalization but seeking ways to accommodate labor concerns in trade policy. Multilateral dialogue on trade and labor would serve the interests of all these stakeholders. It would give labor supporters a chance to shift the terms of the debate.