COMMUNICATION FROM THE COMMISSION TO THE COUNCIL - THE TRADING SYSTEM AND INTERNATIONALLY RECOGNIZED LABOUR STANDARDS
Date: 1996-07-24
Institutions: European Commission
Subjects: International Labour Organisation, World Trade Organisation, liberalisation of trade, social policy, working conditions

COMMISSION OF THE EUROPEAN  COMMUNITIES 

Brussels, 24.07.1996 
COM(96) 402 final 

COMMUNICATION FROM THE COMMISSION TO THE COUNCIL 

THE TRADING SYSTEM AND 
INTERNATIONALLY RECOGNIZED LABOUR STANDARDS 

THE TRADING SYSTEM AND 
INTERNATIONALLY RECOGNIZED LABOUR  STANDARDS 

Introduction 

Contents 

The international debate and the definition of core labour standards 
(a) 
(b) 
(c) 
(d) 

Earlier deliberations in the European Union 
The OECD study 
The work of the ILO 
The G7 conference on employment (Lille, 1-2 April 1996) 
and the Lyons G7 summit (28-30 June 1996) 
The social summit 
Definition of "core" labour standards 

(e) 
(f) 

Action taken by the European Union 
(a) 
(b) 

Unilateral action 
Bilateral cooperation with third countries 

Multilateral action 
(a) 
(b) 

Consolidating the role of the ILO 
The WTO 

1. 

2. 

3. 

4. 

1. 

Introduction 

At  the  end  of  the  Marrakesh  ministerial  meeting  in  April  1994  the  link  between  the 
multilateral trading system and internationally recognized labour standards was one of the 
subjects  mentioned  in the Presidency conclusions  on which  some participants  requested 
the WTO to do further  work. 

Since  Marrakesh,  the  question  has  been  discussed  and  debated  in  international 
its 
organizations  and  the  Council.  The  Commission  has  stated  its  position  in 
communication  on market  access,1 namely  that  "the  Singapore  ministerial  conference  ... 
could  take the  lead  in the  discussion  and  set up  a WTO  working  party to  look  into  the 
question of the links between international trade and working conditions." 

The  conclusions  of  the  113 Committee,  which  the  General  Affairs  Council  formally 
noted  on  13 May  1996, state that the possibility of this question  being discussed  within 
the WTO should be explored. The Community would  continue to take an active part  in 
related work done in other international  fora. 

Meanwhile in Geneva, at about the same time and whilst preparations were under way for 
the ministerial  conference  to be held in Singapore this December, the United  States  and 
Norway  submitted  two  non-papers  which  discuss  the  question  of  internationally 
recognized labour standards and the multilateral trade system (Annex I). 

The paper submitted here goes into more detail regarding the prospects for a discussion in 
the WTO and addresses the key issue of respect for the comparative advantage derived by 
the developing countries from their access to large, low-wage workforces. 

COM(96) 53 final. 

Economie  development,  which  is  promoted  by  trade  liberalization,  is  a  necessary 
condition  of  social  progress. It  is  axiomatic  that  improved  social  protection  becomes  a 
political objective  in the developing countries as soon as national income reaches a level 
capable of sustaining such protection. The long-term aim must therefore  be to help these 
countries  create  the  requisite  conditions  for  promoting  the  growth  of  domestic  demand 
and  improving  living  conditions. Each  state has the  sovereign right choose what  labour 
laws it will  enact  and the  choice made will reflect  both the country's  level  of  economic 
development  and  its political  and  social  priorities.  However,  the  need  for  development 
must  not be taken  as a pretext  for  abusive practices at the workplace  or, particularly,  to 
justify  non-adherence to a universally agreed core of labour standards. 

The European Union's interest in the question of core labour rights stems from the social 
roots of the Union itself, namely the principles of solidarity, social cohesion and respect 
for fundamental rights. It also arises out of its duty to defend the principles of democracy 
and  human rights, a duty reflected,  inter  alia,  in  its external  policy taken  in  its  widest 
sense.  For  instance,  the  objectives  of  the  T.E.U.  (article  F2)  of  the  CFSP  and  the 
development  cooperation  policy  include  developing  and  entrenching  democracy  and 
promoting the rule of law and respect for human rights and fundamental  freedoms.  And 
all  the  Union's  Member  States  have  signed  the  United  Nations  Charter,  the  Universal 
Declaration  of  Human  Rights  and  the  International  Covenants  on  Civil,  Political, 
Economic,  Social  and  Cultural  Rights,  and  a  number  of  other  universal  and  European 
human  rights  instruments.  Among  International  Labour  Organisation  instruments,  apart 
from  the  ILO  Constitution,  mention  can  be  made  of  Conventions  n°s  29  and  105  on 
prohibition  of  slavery  and  forced  labour,  Conventions  n°s  87  and  98  on  freedom  of 
association  and  right  to  collective  bargaining,  Conventions  n°s  100  and  111  on  equal 
remuneration  and  non-discrimination  and  Convention  n°  138  on  minimum  age  for 
employment.  The  general  principles  common  to  these  international  instruments  have 
been  accepted  by  the  international  community  as  universally  binding,  taking  also  into 
account  the  Vienna  Declaration  and  Programme  of  Action,  adopted  by  the  World 
Conference  on  Human  Rights  in  June  1993, the  Declaration  of the  Copenhagen  Social 
Summit of March  1995, and other  similar instruments  approved by consensus by recent 
world  conferences.  The  European  Community  insists  that  they  be  respected  by  all  its 
partners  and  acknowledges  its  own  corresponding  obligations  in  this  respect,  as 
demonstrated by its current bilateral treaty practice. 

Neither the European citizen nor the political authorities may therefore remain  indifferent 
to infringements  of human rights in the context of work, whether these take the form  of 
slavery,  forced  labour,  exploitation  of  children  or  the  prohibition  of  association  and 
collective bargaining. 

Yet the European Union does not ask countries aï a different  stage of development  from 
iis own, or having different  social structures, to align their social policies on those of the 
Union.  Nor  does  it  seek  an  economic  outcome  that  would  deprive  countries  with 
abundant,  cheap,  but  comparatively  unskilled  labour  of  the  option  of  exploiting  these 
advantages. What it does seek is guarantees that fundamental  freedoms  will be respected 
since  this  will  bring  about  working  and  living  standards  corresponding  to  the  level  of 
economic development and the social structures of the countries concerned. 

2. 

The international debate and the definition of core labour standards 

(a) 

Deliberations in the European Union 

The Community has not yet issued a detailed statement on the substance of this  question 
but  some  pertinent  statements  of  the  Commission's  or  the  Community's  position 
regarding the link between trade and core labour standards exist. 

The Commission's White Paper, "Growth, competitiveness, employment - The challenges 
and  ways  forward  into the  21st  century",  emphatically  concluded  that  neither  failure  to 
respect international labour standards nor, more generally, labour cost differentials  can be 
construed  as contributory  factors  in Europe's difficulties  in the  areas  of  competitiveness 
and  unemployment.  The  White  Paper  recognizes  that  these  difficulties  stem  from 
structural  distortion within the Community  and, consequently,  does not propose  placing 
trade  restrictions  on  countries  with  low  wage  costs.  Rather,  the  measures  it  proposes 
relate  to  need  to  set  multilateral  rules  instead  of  taking  unilateral  measures,  to  devise 
positive  economic cooperation policies, to refrain from resorting to trade  discrimination 
as  a  means  of  leverage,  and  to  prepare  discussions  about  the  best  way  to  promote 
adherence to existing and future agreements on social policy (Annex II). 

Then, when he addressed Parliament's Committee on External Economic Relations on 29 
March  1994,  Sir  Leon  Brittan  emphasized  the  fact  that  placing  social  matters  on  the 
agenda of the WTO was one of the Commission's clear aims. 

The  European  Parliament  has continued  to  contribute  to the  debate  on this  issue,  most 
recently  in  a  Social  Affairs  Committee  opinion  on  the  links  between  trade  and  social 
standards,  which  calls  on  the  Commission  to  campaign  for  the  creation  of  a  working 
group on trade and social standards by the Singapore Ministerial  Conference. 

In Marrakesh, the Commission stated that the WTO should also discuss matters such as 
the  exploitation  of  children,  forced  labour  and  refusal  to  allow  freedom  of  speech  or 
association. It underlined the need to ensure adequate safeguards  against unilateralism or 
unwarranted  protectionism  and  the  right  of  developing  countries  to  make  the  most  of 
their comparative advantages. 

There is also the  1994 White Paper on European social policy, which examines the  link 
between social policy and international trade, advocates discussion of the question in the 
WTO  and  calls  for  observance  of  fundamental  social  rights -  particularly  those  of 
collective bargaining and freedom of association -  and the questions of forced  labour and 
child labour to be taken into account. The conclusions of the June  1994 Corfu  European 
Council  consider  that  social  aspects  should  be  discussed  by  the  World  Trade 
Organization whilst the Social Affairs  Council of 27 March  1995 held a major  discussion 
on the subject  and the General Affairs  Council of  12 June that year issued the  following 
conclusions: 

"The Commission and the Member States will make an active contribution to the studies 
in  progress,  particularly  within  the  OECD.  To  that  end,  the  Council  requests  the 
Commission  to  provide  its  own  assessment  of  the  situation  for  the  Union's  internal 
discussions." 

More recently, the Commission sent the Council a paper on a market access strategy  for 
the European Union which mentions multilateral negotiations and the possibility of study 
programmes  on some of the topics proposed  by the Ministers  in Marrakesh.  In view  of 
the direction taken by the international  debate on the link between labour  standards and 
trade, the Commission called for a gradual approach based on fundamental  human rights 
which  would  not  undermine  the  right  of  developing  countries  to  use  their  comparative 
advantage of abundant, cheap labour.  The Commission concluded by proposing that the 
Singapore conference  should establish a WTO working party to look into the question. 

Finally,  as  already  mentioned,  the  113 Committee  looked  into  the  possibility  of  these 
matters  being  discussed  in  the  WTO  and  came  to  the  conclusion  that  this  merited 
consideration.  The  Committee  communicated  its  conclusion  to the  Council  which  took 
formal note on 13 May 1996. 

(b) 

The OECD study 

This  study  began  in  1994  following  a  Ministerial  request  to  undertake  an  analysis  of 
"areas where further progress with liberalization and the strengthening of the multilateral 
system may be required ...", these areas included  "trade, employment and  internationally 
recognized labour standards". 

The  discussion  of  the  study  took  place  under  the  responsibility  of  the  OECD Trade 
Committee and the Committee on Employment,  Labour and Social Affairs and lasted two 
years as the issue is a very controversial one.  At the very end an agreement was reached 
on a joint report to the Ministers.  No consensus was reached on the study itself which 
has been presented only on the responsibility of the OECD Secretariat General. 

The Study is divided in three parts: 

1. 

The  Study  lists  a  set  of  "core"  labour  standards: freedom of  association  and 
collective  bargaining,  elimination  of  exploitative  forms  of  child  labour, 
prohibition of forced labour, non-discrimination in employment. 

These  core  labour  standards  have  the  characteristics  of  human rights, they are 
universally  recognized  and  they  are framework conditions  for  other  labour 
standards.  They  are  embodied  in  ILO  Conventions  and  United  Nations' 
instruments. 

The OECD study innovates when its speaks of "elimination of exploitative forms 
of child  labour instead of  "elimination of  child  labour";  it  underlines  that ILO 
Convention on Child Labour (No  138) sets out a minimum age for Child Labour 
but  has  no  provision  on  exploitation  and  abuses.  The  UN  Convention  on  the 
Rights of the  Child (adopted  in  1989)  contains  such provisions.  As  a matter of 
fact the Governing Body of the ILO has expressed its intention to include an item 
on child labour in the agenda for the  1998 International Labour Conference with 
the objective to strengthen the arsenal of ILO standards with a binding instrument 
geared to banning the most intolerable forms of child labour. 

2. 

Part two of the study focuses on the role that core labour standards might perform 
in the economy. It is the "analytical part" of the study. The analysis is limited and 
the study itself refers to the difficulties encountered in this part. 

The study concludes that the economic effects  of core labour standards are likely 
to  be  small;  developing  countries  must  not  fear  that  core  standards  would 
negatively  affect  their  economic  performance  or their  international  competitive 
position. Regarding the relationship between trade flows  and core standards, the 
study underlines  that there  is  no  evidence  that  low  standards  countries  enjoy a 
better  global  trade  performance  than  high-standards  countries.  The  strongest 
finding is  that  there  is  a  positive  association  over  time  between  successfully 
sustained trade reforms and improvements in core standards. 

On  the  question  of  foreign  direct  investment,  the  study  concludes  that  while 
labour standards may not be systematically absent from the location decisions of 
OECD investors in favour of non-OECD destinations, aggregate FDI suggest that 
core  labour  standards  are  not  important  determinants  in  the  majority  of  cases. 
Host  countries  may  be  able  to  enforce  core  labour  standards  without risking 
negative repercussions on FDI flows. 

Regarding the unemployment question, especially the concern that trade with low 
standards  countries  has  an  impact  on  the  unemployment  of  unskilled  workers 
and/or  growing  wage  inequality  in the  industrialized  countries,  the  study  shows 
that the shift in total employment associated with changes in trade patterns should 
be  small  although there is no consensus  among researchers  on the magnitude  of 
the trade  impact  on sectoral  employment patterns relative to the  impact  of  other 
forces, e.g. technological progress and institutional changes. 

3. 

Concerning the mechanisms, the main problem was the role of the  WTO and to 
place  on  an  equal  footing  the  existing  mechanisms  to  promote  core  labour 
standards  (as  ILO)  and the possible  inclusion  of  new  mechanisms  in the  World 
Trade  Organization.  The  final  text  approved  recognizes  the  differences  of 
opinion among the OECD Member States. 

When  discussed  in  Paris  at  the  Ministerial  Council  (21/22  May),  the  Ministers 
have committed  "to continue working for the promotion of core labour  standards 
around the world. They welcomed the conclusions of the OECD report on trade, 
employment  and  labour  standards  as  making  an  important  contribution  to  the 
understanding  of  this  issue.  They  encouraged  Member  governments  to  discuss 
these conclusions as well as the Secretariat's analytical report on the subject,  with 
a wider, non-member audience, with a view to considering any further  action; this 
discussion  could  start in the context  of the Policy Dialogue with  Dynamic Non-
Member Economies due to take place in the autumn". 

(c) 

The work of the ILO 

(i)  Working group on the social dimension of liberalizing international trade 

In  1994  the  Governing  Board  set  up  the  above  tripartite  group  to  discuss  all 
pertinent  aspects  of  this  question.  After  its  first  few  meetings,  because  of  the 
difficulties  encountered,  the group agreed that  it would  not pursue the  aspect  of 
trade  sanctions  and  would  suspend  further  discussion  on  whether  to  create  a 
linkage between  international  trade and  labour  standards by introducing  a  social 
clause and a penalty mechanism. 

At Its last meeting, in March  1996, the group agreed guidelines for  further  work, 
particularly  that  it  should  examine  the  consequences  of the  globalization  of  the 
economy  to  see  what  might  be  done  to  take  advantage  of  the  positive 
consequences  and  attenuate  the  negative  ones.  It  was  also  decided  to  send 
member states a questionnaire  (since done), carry out country-by-country  studies 
and analyse the work done by other international bodies such as the OECD. 

10 

The group will also press on with its work on the elimination of child labour and 
the ratification  of core standards (see (ii)). It will be holding  its next meeting  in 
November  this  year  just  before  the  Singapore  ministerial  meeting,  and  the 
possibility of issuing a statement in advance of this meeting has been mooted. 

(ii)  Work in fora other than the ILO 

Child labour:  Here the need is beginning to be felt for a new convention to cover 
the  harshest  forms  of  child  labour,  since  existing  conventions  cover  only  the 
minimum  age  at  which  children  may  begin  to  work.  The  Governing  Body  has 
decided to place the matter on the agenda for the International Labour  Conference 
to be held in June 1998. 

Examination of ILO policy on standards:  In November  1995 a group established 
by  the  Governing  Body  made  a  detailed  examination  of  ILO  policy  on  labour 
standards.  Similarly,  the  Governing  Body  is  examining  the  possibility  of 
extending  the  control  mechanisms  which  apply to freedom of association  to  the 
areas  of  forced  labour  and  equal  treatment  (although  neither  governments  nor 
employers had expressed themselves in favour).  Also in November  1995, the ILO 
launched a campaign to encourage ratification  of its  basic Conventions. This took 
the  form  of  the  Director-General  of  the  International  Labour  Office  sending  all 
member  states  a  questionnaire  requesting  them  to  explain  what  obstacles  to 
ratifying the Conventions they had encountered. 

(d) 

The G7 conference on employment (Lille, 1-2 April 1996) 
and the Lyons G7 summit (28-30 June 1996) 

The question of basic social standards was discussed  at the G7 conference  held  recently 
in  Lille.  The  communiqué  agreed  by  the  economy  and  labour  ministers  stressed  the 
"importance  of  enhancing  core  labour  standards  around  the  world  and  examining  the 
links between these standards and international trade in the appropriate fora". 

The matter was raised again at the G7 summit in Lyons in the discussion  on broadening 
the WTO agenda with a view to the forthcoming  Singapore Ministerial  Conference.  The 
heads of state recognized  "that there is a will to address the question of the  relationship 
between trade and internationally recognized core labour standards." 

11 

(e) 

The social summit 

Some guidelines are therefore  already emerging from the debates within the OECD and 
the  WTO.  Firstly,  it  would  seem  that  consensus  is  emerging  regarding  the  principles 
which  should  be  recognized  as  "core  labour  standards".  These  could  be  regarded  as 
encompassing  the  fundamental  human  rights  set  out  in  the  Universal  Declaration  and 
therefore  recognized  everywhere.  They could  directly  improve  working  conditions  and 
therefore  represent a framework within which other standards could become  established. 
They could be regarded as prerequisites for social development. 

The  principles  underlying  labour  standards  are  best  reflected  in  the  relevant  ILO 
Conventions,  as  was  recognized  in  the  final  declaration  of  the  Copenhagen  social 
summit,  which  states  that  the  countries  concerned  will  make  every  effort  to  provide 
quality employment  and defend  the fundamental  rights  and interests of workers. To this 
end  they  will  freely  promote  adherence  to  the  provisions  of  the  relevant  ILO 
Conventions,  namely  those  on  the  prohibition  of  forced  labour  and  child  labour,  the 
freedom  of  association,  the right  to  organise,  collective  bargaining  and  the principle  of 
non-discrimination. 

(f) 

Definition of core labour  standards 

The  fact  that  heads  of  state  and  government  throughout  the  world  accept  these  labour 
standards  is highly  significant  since  it  confirms  their universality  and helps  consolidate 
their position as fundamental rights. 

While the UN, the ILO and other international  organizations have adopted a wide range 
of human rights as well as labour standards, some of which are quite detailed  in nature, 
the international  discussion on trade and fundamental  workers'  rights  has during  recent 
years  focused  on  a  minimum  core  of  rights  generally  recognized  as  universally 
applicable.  Particular  attention  has  been  paid  to  the  prohibition  of  slavery  and  forced 
labour,  freedom  of  association  and  right  to  collective  bargaining,  elimination  of 
discrimination in employment and suppression of the exploitation of child labour. 

12 

Slavery  and  forced  labour  are  prohibited  in  a  number  of  international  instruments, 
including  the  Universal  Declaration  of  Human  Rights,  the  International  Covenant  on 
Civil  and  Political  Rights,  the  Slavery  Convention  of  1926  with  subsequent 
supplementary  conventions  as  well  as  ILO  conventions  Nos  29  and  105.  These 
prohibitions have a long and firm standing in international law and are part of the general 
principles  of international  law from which no derogation  is allowed  (peremptory  norms 
of international law). 

Freedom of association  and the right to form  and to join trade unions are recognized  in 
the  Universal  Declaration  of  Human  Rights  and  the  ILO  Constitution.  Two  ILO 
Conventions in particular, Nos 87 and 98, as well as the International Covenants of 1966, 
provide more detailed rules on the subject, including the right to collective bargaining. At 
least  the  general  principles  expressed  in  these  instruments  are  part  of  the  general 
principles of international law. 

The  elimination  of  discrimination  is  generally  recognized  in  virtually  all  international 
human rights instruments. Article 26 of the International  Covenant on Civil and Political 
Rights  contains  a  general  non-discrimination  clause  which  is  applicable  to  the  field  of 
economic  and  social  rights  as well. Moreover,  discrimination  with  respect  to  the  rights 
recognized  under  each particular  instrument  is prohibited  in,  inter  alia, Article  2  of  the 
Universal  Declaration,  Article  2(2)  of  the  International  Covenant  on  Economic,  Social 
and Cultural Rights and in relevant ILO instruments. ILO Convention No  111 concerning 
Discrimination  in Respect  of Employment  and Occupation and ILO Convention No  100 
concerning Equal Remuneration for Men and Women Workers for Work of Equal Value 
are particularly relevant  in this context.  It is beyond  doubt that,  for  instance, the  formal 
exclusion  of  segments of the population from the  labour market  on the basis of race  or 
sex would be a violation of general international law. 

As to the question  of the exploitation  of child  labour, Article  10(3) of the  International 
Covenant  on  Economic,  Social  and  Cultural  Rights  and  Article  32  of  the  1989 
Convention  on  the  Rights  of  the  Child  provide  that  children  must  be  protected  from 
economic  exploitation  and  from  performing  work  of  a  hazardous  or  harmful  nature. 
States  are  asked  to  provide  for  a  minimum  age  for  admission  to  employment.  ILO 
Convention No  138 contains more specific  rules in this respect.  While, for  instance, the 
use  of  young  children  in  works  that  can  be  harmful  to  their  health  or  development  is 
clearly illegitimate and may in fact constitute slavery and forced  labour as well, the ILO 
has started the preparations of a new convention which would  clarify  the question  what 
constitutes illegal exploitation of child labour. 

13 

3. 

Action taken by the European Union 

Given the principles underlying the European Union's own policy, what action can it take 
in this matter? We need to act on a broad canvas, because different  social problems will 
require  a  different  unit  of  EU  policy  instruments.  For  example,  in  the  field  of  child 
exploitation, we must bear in mind that, while a small minority of children are exploited 
in export-driven  industries, many more  are being  found  in  subsistence  farming  or  local 
construction projects* 

(a) 

Unilateral action 

The issue of human rights and, more specifically,  labour standards is already a feature  of 
the new GSP arrangements,2 which provide for two types of measures. 

The  first  concerns  the  possibility  of  withdrawing  some  or  all  preferences  granted  to 
countries which countenance slavery or forced labour. 

The possibility of withdrawing GSP benefits as a punitive measure is in itself not new. It 
is inherent in the unilateral character of the GSP and has been used in the past to sanction 
discriminatory commercial practices or fraud. In such cases, specific reference  is made to 
forced  labour  in  all  its  forms,  as  defined  in  the  Geneva  Conventions  of  25 September 
1926 and 7 September  1956 and in ILO Conventions 29 and 105. 

The withdrawal of benefits is decided by the Council on a proposal from the Commission 
following  an  enquiry  into  the  matter.  This  procedure  gives  each  party  concerned  the 
opportunity to state his case after evidence has been taken by the management committee. 

The  second  type  of  measure  consists  of  "special  incentive  schemes"  the  main  aim  of 
which  is  to  help  beneficiary  countries  improve  the  quality  of  their  development  by 
adopting more advanced social and environmental policies. 

Thus,  in  the  area  of  labour  standards,  additional  preferences  may  be  granted  from 
1 January  1998  to  countries  which  so  request  and  which  comply  with  ILO 
Conventions 87 and  98 on freedom of association  and the right to  collective  bargaining 
and with Convention  138 on child labour. 

The  implementation  procedures  and  the  degree  of  preferences  granted  (supplementary 
margin) will be defined  on the basis of a Commission report which will take into account 
the results of studies carried out by other international bodies such as the ILO, WTO and 
OECD. 

Council  Regulation  (EC) No  1256/96  of  20  June  1996  and  Council  Regulation 
(EC) No 3281/94 of 19 December 1994. 

14 

(b) 

Bilateral cooperation with third countries 

Respect  for  and  promotion  of  human  rights  and  democracy  is  one  of  the  general 
objectives of the Community's development cooperation policy. 

At  bilateral  level  the  cooperation  agreements  concluded  between  the  EU  and  third 
countries cover economic and social cooperation. 

Thus, in collaboration  with  other  international  bodies (World  Bank, ILO), the Union  is 
organizing  and  financing  financial  and  technical  assistance  programmes  to  promote 
education and jobs for women. These programmes include: a) the building of schools; b) 
vocational 
teachers  (where  positive 
training  for  secondary  school 
discrimination  in  favour  of  women  is  common);  d)  "informal"  education  (targeting 
children  who  left  school  at  a  very  early  age,  adults,  people  in  rural  areas,  etc.).  This 
assistance may be granted either to governments or to non-governmental organizations. 

training;  c) 

In  the  light  of  the  international  commitments  entered  into  at  the  World  Summit  in 
Copenhagen  and  following  the  example  of  the  recent  agreements  concluded  with,  for 
instance, Pakistan and  Bangladesh, the Union  intends to incorporate  social  development 
objectives into its cooperation agreements with third countries, making specific  reference 
to  the  need  to  safeguard  workers'  basic  rights  as  laid  down  in  the  relevant  ILO 
instruments,  including  those  banning  forced  labour  and  child  labour  and  upholding  the 
right to association and collective bargaining and the principle of non-discrimination. 

In  the  same  vein,  the  1995  OECD  Development  Aid  Committee  Declaration  on  the 
"Development  Partnership  in the New Global  Context"  defines  strategies  for  abolishing 
child  labour  in  as  efficient  a  manner  as  possible,  which  means  combating  poverty  (by 
taking  action  at  the  level  of  individual  families),  investing  in  education,  creating 
employment  opportunities  for  adults  and  promoting  the  participation  of  women  in 
economic development. 

The International  Labour Office  has also suggested that families  who send their  children 
to school be compensated for loss of earnings. 

Reference to Human Rights 

The European Union has developed  a policy on human rights and fundamental  freedoms 
that  covers  a  broad  range  of  external  relations  activities.  In  November  1995,  the 
Commission published a paper entitled "The European Union and the external dimension 
of human rights policy: from Rome to Maastricht and beyond*. 

n 

Since  1992  all  agreements  concluded  between  the  European  Union  and  third  countries 
have  been required  to  incorporate  a clause  defining  human  rights  as a basic  element  of 
such agreements. This clause, which relates to all rights -  economic, social and cultural 
as  well  as  civil  and  political  -  was  further  developed  by  the  Commission  in  its 
Communication of May  1995 on "the  inclusion of respect for  democratic principles and 
human rights in agreements between the Community and third countries". 

4. 

Multilateral action 

Without  playing  down  the  importance  of  the  contribution  of  major  international 
institutions  which  through  the  medium  of  political  dialogue  are  in  a  position  to  exert 
indirect  influence  on  the  promotion  of  universal  labour  standards,  this  paper  focuses 
primarily  on  the  International  Labour  Organization,  whose  specific  role  it  is  to  assess 
issues related  to the promotion  of  labour  standards, and the  World  Trade  Organization, 
which is the natural forum for debating the links between trade and labour standards. 

The  promotion  of  labour  standards  will  entail  improving  the  ILO's  efficiency  and 
upgrading  its  monitoring  systems.  Furthermore,  without  seeking  to  politicize  the 
multilateral  trade  system,  it  is  surely  unacceptable  for  the  international  community 
to 
turn a blind eye to human rights violations in the name of trade liberalization? 

This issue takes on even greater  significance  in the light of the links between  economic 
development,  trade  liberalization  and  social  progress,  as highlighted  by the  OECD  and 
the  ILO. Thus, trade  liberalization  will  boost  economic  development  and  thus  improve 
living conditions, while  social  conditions maintained  at an artificially  low level will  act 
as a break on growth. 

(a) 

Consolidating the role of the ILO 

The  ILO  has  mechanisms  for  monitoring  the  application  of  international  labour 
conventions.  The  Committee  of  Experts  on  the  Application  of  Conventions and 
Recommendations examines the reports that Member  States are required  to  submit  on a 
regular  basis  concerning  their  application  of  the  conventions  they  have  ratified.  The 
conclusions of this Committee are then debated by the International  Labour  Conference. 
There  is  also  a  Committee on Fteedom  of Association which  is  competent  to  examine 
trade union issues arising in all Member  States, regardless  of whether they have  ratified 
the  relevant  conventions  or  not.  The  ILO's  constitution  also  provides  for  a  complaints 
procedure  that  can  be  initiated  by  each  of  the  tripartite  members  of  the  organization 
where  a Member  State  fails  to  apply  a convention  it has ratified.  This may  lead  to  the 
case being referred to a Commission of Inquiry, although it must be stressed that none of 
these procedures result in the imposition of sanctions. 

16 

The  Organization  can  deploy  positive  measures  such  as  dialogue  with  the  country 
concerned  and  technical  assistance,  and  has  developed  a  programme  for  the  gradual 
elimination of child labour in the world - the "IPEC" programme. 

The ILO system thus relies on persuasion and a pro-active approach. Its procedures have 
a moral impact, particularly on public opinion, but are not coercive. The pressure brought 
to  bear  by  governments,  employment  bodies  and  the  trade  unions  also  plays  a  very 
important role. 

The  ILO  has  already  initiated  an  internal  debate  on  ways  and  means  of  making  the 
Organization more effective.  EU policy on labour standards must take due account of this 
debate, the main proposals of which include the following: 

-  Support  for  ILO  dialogue  and  direct  contacts  with  governments  and  for  the 
Organization's  technical  assistance  activities,  particularly  the  IPEC programme, 
for which funding is required. 

-  Support for the idea of making respect for universal labour standards implicitly 
mandatory  for  all  ILO  members,  regardless  of  whether  they  have  ratified  the 
relevant conventions or not. This would mean introducing a procedure similar to 
that applied to freedom of  association,  under which an inquiry can be  launched 
without the prior consent of the government concerned. 

-  Targeting unacceptable  forms  of child labour. In  1998 the ILO will  assess the 
options  for conducting  inquiries, producing reports and developing  programmes 
aimed at encouraging children to attend school (direct aid to families, free meals 
at school). 

-  Improving  the  ratification  rate.  The  International  Labour  Office  has  already 
launched  a  campaign  to  step  up  ratification  by  asking  governments  to  ratify 
conventions or explain why they are unable to do so. 

17 

Other  measures  that  might  be  envisaged  include  projects  along  the  lines  of  the  "Good 
Practice  Codes" initiated  by governments and by the private sector. For example the EU 
Code  of  Conduct,  initially  aimed  at  European  firms  operating  in  South  Africa  in 
particular,  is applied on a voluntary basis, and concerns company policy on the terms of 
employment, the  criteria  for  investing  abroad  and the conditions  imposed  on suppliers. 
In  addition  to  the  Tripartite  Declaration  of  Principles  concerning  Multinational 
Enterprises  and  Social  Policy  adopted  by  the  International  Labour  Office,  further 
measures  could  be  taken  to  make  these  initiatives  more  transparent  and  to  raise  their 
profile. 

Another  area that  might  be  looked  into  is the  ILO's  contribution  to  the  issue  of  "social 
labelling".  A growing number of private initiatives are being launched along these lines, 
and  there  are  already  programmes  designed  to  inform  consumers  about  the  social 
conditions  in  which  products  have  been  manufactured.  It  is  not  a  question  of  the  ILO 
launching its own "social labelling" programme, but of providing technical assistance and 
safeguarding  against such initiatives being hijacked  for protectionist purposes.  The rules 
of the WTO can also play an important part here. 

(b) 

TheWTQ 

The  interdependence  of trade  liberalization,  economic  development  and  social  progress 
has been the subject of intense debate in the international institutions since the Marrakesh 
Conference. The main issues under discussion are: 

the convergence of the objectives pursued by the multilateral trade system and the 
promotion of labour standards; 

a  multilateral  approach  to  respond  to  the  emergence  of  unilateral  trade  policies 
linked to the promotion of labour standards; 

the  impact  of  the  application  of  universal  labour  standards  on  international 
competition, particularly with regard to the products of developing countries. 

(i) 

Convergence of objectives 

In  the  current  GATT/WTO  texts,  only  Article  XX(e)  links  prison  labour  and  trade 
restrictions and authorizes contracting parties to impose or step up sanctions on products 
manufactured  by  prison  labour.  Article  XX  specifies  that  these  measures  may  not  be: 
taken  in  such a way as to  entail  arbitrary  or unjustified  discrimination;  applied  between 
parties where the same conditions apply; or used as a disguised means of blocking trade. 

Article  XX  is  restrictive  in  its  approach,  authorizing  measures  that  limit  trade.  The 
inherent  risk  is  that  this  approach  will  be  exploited  for  protectionist  purposes  which 
would  be  contrary  to  the  objectives  of  promoting  labour  standards.  Economic 
development, the growth of trade and social progress together form a virtuous circle, and 
the correct approach is therefore to liberalize, not restrict trade. 

18 

Seen  in  this  light,  the  objectives  of  the  multilateral  trade  system  do  not  seem  so 
incompatible with the promotion of universal labour standards. 

It  should  not  be  forgotten  that  the  membership  of  the  WTO,  the  UN  and  the  ILO  is 
essentially made up of the same States; it is therefore safe to assume that the principles to 
which  they  have  voluntarily  subscribed  under  the  auspices  of  these  three  bodies  are 
complementary. 

The Marrakesh Agreement which established the World Trade Organization emphasizes 
the  link  between free trade, economic  development  and social  progress  by echoing  the 
GATT  preamble  in  recognizing  that  "relations  in  the  field  of  trade  and  economic 
endeavour  should  be conducted  with  a view to raising  standards  of living, ensuring  full 
employment  and  a  large  and  steadily  growing  volume  of  real  income  arid  effective 
demand". 

Ultimately,  given  that  trade  liberalization  goes  hand-in-hand  with  the  freedom  of  the 
individual  to negotiate  and conclude  employment  contracts, it is essential  that  it also be 
linked to the freedom of workers to negotiate their living and working conditions. 

The Havana Charter (Annex III) referred  to unfair  working conditions and envisaged  the 
introduction of labour standards, particularly with regard to export products. The General 
Agreement on Tariffs  and Trade was initially confined  to tariff  questions,  and it was not 
until the Tokyo Round that the impact of non-tariff measures on trade was acknowledged. 
This paved  the  way for  the negotiation  of  codes  on  subsidies,  import  licences,  customs 
value, and so on, thus extending the application of the GATT's multilateral rules to cover 
non-tariff issues. 

The  conclusion  of  the  Uruguay  Round  ushered  in  a  new  era.  The  World  Trade 
Organization  is  a  very  different  animal  to  the  GATT,  not  only  because  its  sphere  of 
application has been further  extended to cover other areas such as services, but also from 
an institutional point of view. The WTO is more than just a collection of rules agreed by 
contracting  parties;  it  provides  an  institutional  framework  for  the  discussion  of  every 
aspect  of  trade.3  The  creation  of  a  working  group  on  the  links  between  trade  and 
internationally  recognized  labour  standards  therefore  would  not  necessarily  entail 
repercussions as regards trade disciplines. 

The creation of such a group within the WTO should not be seen as an alternative to the 
reinforcement  of the ILO. On the contrary, in view of the ILO's dual international role as 
a legislative and supervisory body, the two things should be seen as complementary. 

The Marrakesh Agreement establishing the World Trade Organization, Article III, 
page  1:  "The  WTO  shall  facilitate  the  implementation,  administration  and 
operation,  and  further  the  objectives  of  this  Agreement  and  of  the  Multilateral 
Trade Agreements". 

19 

(ii) 

The need for a multilateral  framework 

Examples of links between trade and labour standards in the real world of economics and 
politics  can  be  found  both  in  unilateral  preferential  policies  (GSP  -  USA/EU)  and  in 
regional  integration  systems  such  as  NAFTA.  Unilateral,  bilateral  and  plurilateral 
projects of this kind establish differing  criteria and procedures, gradually building  up a 
body of regulatory texts that are not always coherent, and not always consistent with the 
principles of free trade. 

Another important factor is the pressure of public opinion, which, increasingly concerned 
by the  humanitarian  aspects  of working  conditions  throughout  the world,  is  calling  on 
governments to intervene by imposing restrictive import measures. This trend has led to 
the  creation  of  consumer  organizations  and  activities  such  as  "social  labelling"  and 
boycotts of products from certain countries. A well-known example of "social labelling" 
is the "Rugmark Foundation", which issues "social" certificates to makers of hand-made 
carpets. Boycotts, on the other hand, run the risk of being manipulated for protectionist 
purposes where similar products are manufactured locally. 

The  private  sector  has  already  started  to  respond,  and  some firms (particularly  those 
active  in the  clothing  and footwear  sectors)  have  adopted  codes  relating  to  the  labour 
standards applied by their subsidiaries and suppliers. 

In the  absence  of  a multilateral framework with regard to the  links  between trade and 
labour  standards  there  is  a risk  that  multilateral  trade  measures  that  can  only  have  a 
destabilizing effect  on the progress made in liberalizing trade with the conclusion of the 
Uruguay  Round  negotiations.  In  the  years  to  come,  the  WTO  must  consolidate  its 
position as the body responsible for managing the world trade system. This task will be 
rendered more difficult if the WTO has to contend with unilateral trade restrictions which 
are  incompatible  with  multilateral  rules  and  which  will  lead  to  a  series  of  dispute 
settlements that can only sap the Organization's credibility. 

(iii)  Competitiveness and developing countries 

Developing  countries  regard  the  debate  on  labour  standards  within  the  WTO  as  an 
attempt by the developed world to impose labour standards and pay levels which are out 
of proportion to their level of development, under threat of trade reprisals. As they see it, 
either they  lose  their competitive  advantage,  or the  industrialized  countries  use  labour 
standards  as  an  excuse  to  raise  trade  barriers  to  protect  the  weaker  sectors  of  their 
economies. 

20 

The  debate  thus  tends  to  take  the  form  of  a North-South  conflict  between  high  pay 
economies and countries with low salaries. This serves only to muddy the waters, further 
reducing the chances  of  achieving the political  consensus  that is  essential  if  a genuine 
debate is to be launched within the WTO  framework. 

It  is  therefore  vital  that  the  developing  countries  be  reassured  that  the  aim  is  not  to 
weaken their competitive  position  on the  international  market by providing  guarantees 
against protectionist abuses of the system. The first such guarantee would be to  confine 
the  debate  to  the  promotion  of  universal  labour  standards,  firmly  ruling  out  any 
discussion of salary differentials. 

This  option  is  backed up by the findings of  an OECD report  which  confirms  that the 
developing countries' fears that the application of universal labour laws will  affect their 
competitive position are not justified.  On the contrary, the application of such standards 
could theoretically boost their economic performance in the long term. 

In view of the unilateral initiatives being taken by governments and the private sector, the 
fact  of  discussing  all  these  issues  in  a multilateral  forum  is  in  itself  a  guarantee that 
protectionist moves will be resisted. 

It is important to stress that the WTO lacks the requisite expertise in the field of labour 
standards, and that coordination with the ILO is therefore essential. 

Conclusions 

The  European Union  has traditionally  been at the  forefront  in promoting  international 
human rights. Its partners clearly regard it as having historic responsibilities to discharge 
in this respect, and it does so with the means at its disposal under both its external policy 
and its development aid policy. 

An  international  consensus  is  currently  emerging  on the  need  to  promote  certain  core 
labour  standards  regarded  as  universal  and  comprising  human rights-related aspects, 
specifically  the  abolition  of  forced  labour and slavery, the  elimination  of  child labour, 
freedom to  organize,  the  right  to  collective  bargaining  and  non-discrimination  in 
employment. The EU Member States on the 113 Committee felt the possibility of raising 
the question of labour standards within the WTO was worth considering. 

It is important to strike a balance between the strengthening of the International Labour 
Organization, as the specialist body for labour standards, and the opening of talks in the 
WTO. 

The  WTO  has  a  key  role  to  play  with  regard  to  the  question  of  the  comparative 
advantages  enjoyed  by  the  developing  countries  and  their right to  define  their  own 
national policies. Discussion of these issues within the WTO will promote free trade and 
limit the scope for abuse of unilateral measures or private initiatives liable to degenerate 
and play into the hands of protectionists. 

21 

The point of departure for these talks would be the convergence between the aims of the 
multilateral trade system and the promotion of core labour standards, as reflected  in the 
preamble  to  GATT,  incorporated  in  the  Marrakesh  Agreement,  which  links  the 
liberalization  of  trade with  economic  development  and social  progress.  The  avenue  of 
approach should therefore be the development of trade within an open non-discriminatory 
multilateral system, rather than trade restrictions. 

Against  that  background,  the  incorporation  of  social  issues  within  the  WTO  work 
programme should be a settled objective for the EU.  The Commission therefore proposes 
that the Council  agree to the Commission putting forward, at the Singapore Ministerial 
Conference, the creation of a working party to examine the link between the multilateral 
trading  system  and core  labour  standards, and to explore the  areas in which the WTO 
might act in conjunction with other international bodies to help promote such standards. 

With this in mind, the Commission would also suggest that the Council approve a written 
paper setting out the EU's position on these issues, with a view to registering it as soon as 
possible in Geneva. 

22 

,  , a ll  Annex 

W TO  Ministerial  Conference  - Singapore,  1996 
Core  Labor  Standards  and  the  Multilateral Trading  System 
Elements  of  an  Agreement 

'to.' 

Non-Pnpcr  from  the Delegation  of the United  States 
May  15, 1996 

1  An  agreement  at Singapore  would  recall  the objectives  of the multilateral  trading  system  and 
the desirability  of  promoting  internationally-recognized  core  labor  standards.  Noting  that 
promotion  of core  labor standards  is likely  to strengthen  the long-term  economic  performance  of 
all countries, WTO  members  would  recognize  this in a declaration  designed  to take  advantage  of 
the opportunity  to  further  strengthen  and  develop support  for the trading system  At the  same 
time, and  in the  same declaration,  WTO members would reiterate their  support  for an open,  non 
discriminatory  trading  system,  pledge  to seek  further  trade liberalization  and  to  avoid 
protectionist acts or actions calling into question  the  legitimate comparative  advantage  of  WTO 
members.  Such  a multilateral  policy  statement  would  not in itself create  new or  enforceable 
WTO  rights or obligations.  The  Marrakesh  Déclaration on Coherence  in Global  Economic 
Policy-making  is a possible  model. 

2  The declaration  at  Singapore  would  be strictly  related to "core" labor standards, based  on  the 
following  human  rights  standards  agreed to by WTO  members in the  U.N. and  other  multilateral 
for*. 

o 
o 
o 
o 
o 

Freedom  of  association 
Rjght  lo organize and  bargain  collectively 
Prohibition  on  forced  labor 
Elimination  of exploitative  forms  of child  labor 
Nondiscrimination  in employment  or occupation 

Limiting  the labor  standards discussed  to the above should ease the concerns of WTO  members 
hat addressing  this  issue could -k|id  to an  economic  discussion of wage  rate  differentials. 

3.  The  agreement  in  Singapore  should  set in motion  a follow-on  examination  in the  WTO  (as a 
WTO working party) tasked  with  identifying  linkages between  the objectives and provisions  of 
the  WTO  and  core  labor standards,  related  work  in other organizations, primarily the ILO,  and 
ways in  which  WTO  might  cooperate  further  in this area  with other  institutions,  t he  results  of 
the working  party's  efforts  should  be taken  Up at a subsequent  Ministerial  meeting with  a view  to 
considering  how the  WTO  could  contribute  to furthering  the observance  of core  labor  standards 
and to define  modalities foi  such  action, within  the context of maintaining  an open, non 
discriminatory  trading  system 

1\ 

MayH/1996 

coze 

PROMOTION.  O F C A B O UR  STANDARDS  IN THE CONTEXT  OF  INTF.RNATiONAL 
TRADE  -  Norwegian  approach 

Norway  is deeply  coromined  to the  promotion  of internationally  recognized  labour  standards, 
viz.freedom  of-association,  the  right  to organize and  bargain collectively, prohibition  of  forced 
labour,  elimination  of  exploitative  forms  of child  labour  and non-discrimination  in  employ 
ment  or  occupation.  While  primary  responsibility  for the promotion  of these  standards  rests 
with  national  governments  and  the social  partners, the international  community  has  a  shared 
responsibility  to  monitor  progress  and  assist  national  efforts  to improve these  standards. 

Globalization  of  the  economy  and a more open and dyaamic  international  trading  system  have 
contributed  to  a renewed  focus  on  labour  stAndards in the context of trade. Trade  is  seen  both 
as  a means  to  improved  standards  through  trade-led  economic  growth,  as well  as  an  area of 
international  interaction  ba>c<i on «i  common  obligation  to respect  and  promote  basic  human 
rights,  of  which  these  labour  standards  arc  an  intégrai  part. 

A  recent  OECD-study  has  indicated  that trade  can be associated  with  improvements  in  labour 
standards.  Norway  is  interested  in a follow-up  of the study, with the objective of  involving  a 
wider  circle  of  countries  and  especially  the developing  countries, in  an open  discussion  of  the 
most  effective  strategies  for  raising  labour  standards  globally, and  how'trade can  contribute  to 
this  end  Norway  has  taken  the  initiative to  a workshop in the OECD, with  participation  of 
non-members,  to  introduce  the  study  and  the conclusions  which can  be drawn  from  it.  Such 
discussions  would  also  be  supportive  of the ongoing efforts  of ILO to improve  the  monitoring 
and  implementation  of  labour  standard  conventions, including a new  convention  on  child 
labour. 

Norway  foresees  a discussion  m the WTO-context, to clarify  the issues and to  identify 
possible  linkages  which  can  be  addressed wnthin WTOs area of competence. In this  context, 
we  recognize  the  importanccof  avoiding  the introduction  of unilateral  trade measures  A 
discussion  in WTO,  d r a w i n g ^,  on  the  work  of other international  organizations,  could 
embrace  efforts  to  improve  labour  standards  as an integral  pan  of a strategy  for  economtc 
growth  and  increased  ir«ulc  It could  also contribute  towards demystifying  beliefs  that  low 
labour  standards  bring  trade  benefits 

Closer  relations  between  national  and  regional  labour  reseaich  institutions could  also  contri 
bute  to a  non-confrontational  discussion  in this area. 

Norway  believes  that  a  strategy  of non-confrontational  dialogue  involving  ail  parties  con 
cerned  and  taking  into  account  all effective.means  to assist  nauonal  efforts  to improve  labour 
standards  gradually  would  have  the  best  chance  of success  in raising  these standards  globally 
and  in  improving  the  welfare  of  the people  involved. The  WTO. for  its part, should  examine 
how  the  multilateral  trading  system  could  contribute  to the achievement  of  these  goals 

ik 

EXTRAIT DU LIVRE BLANC 
ANNEX  H 

(f)  Improve competitiveness 

Trade  and  economic  policies  cannot  sub 
stitute for the development by business both 
of  saleable  products  and  of  the  means  to 
deliver them to world  markets on ,time and 
at the cost and quality  needed. As to social 
costs, the  fear  of  so-called  social  dumping 
would be misplaced  if it related  to a belief 
that  in certain  countries  the  level  of social 
protection is kept artificially  low in order to 
gain  a  competitive  advantage  elsewhere. 
We should  not accept  too simple a picture 
of  high-wage  industrial  countries  and  low-
wage  developing  countries.  Differences  in 
worker wages alone can be misleading. It is 
true that modem  technology spreads much 
faster  and  more  easily  than  in  the  past  to 
different  areas  of  the  world.  But  poorer 
education, lower skill levels, lower levels of 
capital  investment  overall  and  inadequate 
infrastructure  can  all  offset  the  possible 
1 advantage  to  be  derived  from  low  wages. 
j 

This is not to say that  the Community  has 
! no  difficulty  in  competing  with  labour-
! abundant  countries. But European competi 
tiveness is falling  not  principally  because of 
the  impact  of  international  social  cost  dif 
ferentials  in  some  sectors,  but  because we 
ourselves  suffer  structural  distortions  in 
Europe.  In developing  countries,  more ela 
borate  social  protection  becomes  a  gener 
ally  held  political  objective  as  national 
income  rises  to  a  level  where  those objec 
tives are attainable. In the long run, a major 
part  of  the solution  will  consist  in  helping 
tKese countries to set up the conditions nec 
essary  for  the  development  of  domestic 
demand  and  rise in the standard  of living. 

!  The search for greater competitiveness both 
by trade and  other policies does not imply 
1  that  social  protection  should  be  under 
mined  in  Europe  or  ignored  abroad.  We 
j  are  rightly  proud  of  our  record  in  this 
I  respect, which compares with the best in the 
world,  and  we  are  right  to  remain  com 
mitted  to establishing  European-wide stan 
dards for social protection  wherever appro 
priate. 

The Community and its Member States can 
take  every  opportunity  to  raise  with  the 
countries  concerned  the  need  to bring  for 
ward  their  own  legal  changes.  We  can 
encourage  this  by  positive  measures,  for 
instance by providing  legal  advice or tech 
nical cooperation where required. These are 
legitimate  objectives  of  development  aid 
and economic cooperation. But trade policy 
is not an instrument  for the achievement of 
those objectives. 

We  rightly  object  to  unilateral  action  by 
others  to  impose  on  Europe  their  view  of 
how the world  should  be run. The  interna 
tional  organizations  responsible  for  multi 
lateral  rules  must  themselves  judge  Com 
munity  compliance  with  these  rules.  The 
same  principle  must  apply 
to  judging 
others' compliance. 
* 
There are three fronts on  which to act: 

(i)  Inform  better  the  current  Community 
debates on social  dumping,  explaining 
why the Community wants multilateral 
rule-making and should not allow indi 
vidual countries to set up as the unilat 
eral judge  of  others'  domestic  laws or 
of  others'  compliance  with  interna 
tional agreements; 

(ii)  Develop  a  positive  Community  econ 
omic  cooperation  policy  to  increase 
social standards worldwide but without 
introducing  unilateral  trade  discrimi-
nation as a lever; 

i 
I 

(iii)  Prepare for the discussions that  will be 
necessary,  in  the  International  Labour 
Organization  and  elsewhere,  after  the 
Uruguay  Round,  of  how  best  to 
strengthen  compliance  with  current 
and  future  agreements  in  the  field  of 
social policy. 

^^ 

Annex 

I II  . 

United Nations  Conference  on Trade  and  Employment  - Havana.  April,  1948: - Article  7;  Page  T 

Fair  Labour  Standards: 

1.  The Members  recognize  that  measures  relating  to employment  must  take fully  into  account  the 
rights  of  workers  under  inter-governmental  declarations,  conventions  and  agreements.  They 
that  all  countries  have  a  common  interest  in  the  achievement  and  maintenance  o, 
recognize 
labour  standards  related  to  productivity,  and  thus  in  the  improvement  of  wages  and 
fair 
labour 
working  conditions  as  productivity  may  permit.  The  members  recognize 
trade, 
conditions,  particularly 
and,  accordingly,  each Member  shall  take  whatever  action  may  be  appropriate  and feasible 
to 
eliminate  such  conditions  within  its  territory. 

in  production  for  export,  create  difficulties 

that  unfair 
in  international 

2.  Members  which  are  also  members  of  the  International  Labour  Organisation  shall  co-operate 

with  that  organization 

in giving  effect  to this  undertaking. 

3. 

in 
In  all  matters  relating 
accordance  with  the provisions  of  Articles  94  or  95,  it  shall  consult  and  co-operate  with  the 
International  Labour  Organisation. 

that  may  be  referred 

to  labour  standards 

to  the  Organization 

ZC 

ISSN 0254-1475 

COM(96) 402  final 

DOCUMENTS 

EN 

02  04  05  11 

Catalogue number  : CB-CO-96-416-EN-C 

ISBN 92-78-07876-X 

Office for Official Publications of the Europtan Communities 

L-2985 Luxembourg 

21