Trade, employment and labour standards : a study of core workers’ rights and international trade.

254 Pages·1996·3.399 MB·English

by  OECD

Trade, Employment
and Labour
Standards
A Study of Core
Workers’ Rights
and International Trade
ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT
ORGANISATION FOR ECONOMIC CO-OPERATION
AND DEVELOPMENT
Pursuant to Article 1 of the Convention signed in Paris on 14th December 1960,
and which came into force on 30th September 1961, the Organisation for Economic
Co-operation and Development (OECD) shall promote policies des2gned:
- to achieve the highest sustainable economic growth and employment and a rising
standard of living in Member countries, while maintaining financial stability, and
thus to contribute to the development of the world economy;
to contributc to sound economic expansion in Member as well as non-member
-
countries in the process of economic development; and
- to contribute to the expansion of world trade on a multilateral, non-discriminatory
basis in accordance with international obligations.
The original Member countries of the OECD are Austria, Belgium, Canada,
Denmark, France, Germany, Greece, Iceland, Ireland, Italy, Luxembourg, the
Netherlands, Norway, Portugal, Spain, Sweden, SwitzerIand, Turkey, the
United Kingdom and the United States. The following countries became Members subse-
quently through accession at the dates indicated hereafter: Japan (28th April 1964),
Finland (28th January 1969), Australia (7th June 1971), New Zealand (29th May 1973),
Mexico (18th May 19941, the Czcch Republic (21st December 1995) and Hungary
(7th May 1996). The Commission of the European Communities takes part in the work of
the OECD (Article 13 of the OECD Convention).
Publik en fragais sous le titre :
LE COMMERCE, L’EMPLOI ET LES NORMES DU TRAVAIL
Une dtude sur les droits fondamentaux des travailleurs et I’kchange international
0 OECD 1996
Applications for permission to reproduce or translate all or part of this
publication should be made to:
Head of Publications Service, OECD
2, rue Andrk-Pascal, 75775 PARIS CEDEX 16, France.
FOREWORD
This study has been prepared in response to a request given to the
Organisation by OECD Ministers to undertake an analysis of areas where further
progress with liberalisation and the strengthening of the multilateral system may
be required. One such area was trade, employment and internationally
recognised labour standards, including basic concepts, empirical evidence on
trade and investment patterns, and current mechanisms for promoting higher
labour standards world-wide.
The study begins with a Report agreed by the two OECD Committees
which oversaw the work, i.e. the Employment, Labour and Social Affairs
Committee and the Trade Committee. The agreed Report reflects the findings
of a detailed analytical report of the OECD Secretariat as well as extensive
discussions by the two Committees and other Committees involved in the work,
notably the Committee on Investment and Multinational Enterprises. The
Secretariat's analytical report itself is presented after the agreed Report and is
published under the responsibility of the Secretary-General of the OECD.
This report was prepared by Corinne Delkhat, Mariarosa Lunati, Anne
Richards and Raymond Torres, with specific contributions from Rolf Alter,
Stephanie Baile, Crawford Falconer, Evdokia MoYs6, Nicholas Vanston and
Craig VanGrasstek, under the general supervision of John Martin and Jacques
de Miramon.
3

CONTENTS
Foreword ............................................................................................... 3
Abbreviations ....................................................................................... 7
Joint Report on Trade, Employment and Labour Standards
by the Employment, Labour and Social Affairs Committee
and the Trade Committee of the OECD .................................................... 9
Selection of core labour standards and their implementation., ......... 10
.
Links between core labour standards, trade, economic
development and employment ........................................................ 11
Mechanisms to promote core labour standards world-wide ............. 14
Introduction .......................................................................................... 21
PART I .....: . ............................................................................................ 23
LABOUR STANDARDS IN OECD AND SELECTED
NON-OECD COUNTRIES
Selection of core labour standards. ................................................... 25
ILO Conventjons ............................................................................. 28
UN provisions on workers’ rights .................................................... 38
Observance of core labour standards in selected countries ............... 39
Notes.. ............................................................................................. 7 1
PART I1 ......................................................................................... 75
POSSIBLE LINKS BETWEEN CORE LABOUR
STANDARDS, TRADE, FOREIGN DIRECT
INVESTMENT, ECONOMIC DEVELOPMENT
AND EMPLOYMENT
Economic properties of core labour standards ................................. 77
Core labour standards and trade performance .................................. 88
Core labour standards and trade liberalisation.. ............................... 105
Core labour standards and foreign direct investment ....................... 112
Trade, employment and wages ........................................................ 124
5
Notes .............................................................................................. 145
PART 111 ....................................................................................... 149
MECHANISMS TO PROMOTE
CORE LABOUR STANDARDS WORLD-WIDE
An overview of the ILO monitoring system .................................... 154
The contribution of development co-operation programmes. ........... 161
Proposed mechanisms in international organisations. ...................... 169
Regional and unilateral government actions .................................... 178
International standards for the conduct of firms .............................. 190
Privateparty mechanisms ............................................................... 199
Notes .............................................................................................. 205
Analytical Appendix ............................................................................ 215
Core Labour Standards, Economic EKiciency and Trade
Annex .................................................................................................... 233
Methods Applied in Part 11, “Core labour standards
and trade liberalisation”
Index of compliance with ILO Conventions 87 and 98 ................... 233
Indicators of trade liberalisation. ..................................................... 236
References ............................................................................................ 239
6
ABBREVIATIONS
AFL-CIO American Federation of Labor and Congress of Industrial
Organizations
BIAC Business and Industry Advisory Committee to the OECD
BICE Bureau International Catholique de 1’Enfance .
CEACR Committee of Experts on the Application of Conventions and
Recommendations WO)
CEDC Programme on Children in Especially Dificult Circumstances
CFA Conunittee on Freedom of Association (ILO)
ClME Committee on International Investment and Multinational Enterprises
(OECD)
CWIN Child Workers in Nepal Concerned Center
DAC Development Assistance Committee (OECD)
DNME dynamic nonmember economy
EBRD European Bank for Reconstruction and Development
EC European Community
EPZ export-processing zone
EU European Union
FDI foreign direct investment
GATT General Agreement on Tariffs and Trade
GDP gross domestic product
GSP Generalised System of Preferences
ILC Conference Committee on the Application of Conventions and
ex>)
Recommendations
ILO International Labour Organisation
ILWRF International Labour Rights Education and Research Fund
IMF International Monetary Fund
I0 input/oLltput
7
IPEC lnternational Programme on the Elimination of Child Labour @O)
IS0 International Organisation for Standardisation
IT0 International Trade Organisation
MFN most-favoured nation
MNE mu1t inational enterprise
MOU memorandum of understanding
NAALC North American Agreement on Labor Cooperation
NAFI'A North American Free Trade Agreement
NAO National Administrative Office
NBER National Bureau for Economic Research
NGO non-governmental organisation
quantitative restrictions
QRS
SITC Standard International Trade Classification
SRI socially responsible investing -
TPRM Trade Policy Review Mechanism 0)
TUAC Trade Union Advisory Committee to the OECD
UN United Nations
UNCTAD United Nations Conference on Trade and Development
~ S C OUni ted Nations Educational, Scientific and Cultural Organisation
UNICEF United Nations International Children's Emergency Fund
USITC United States International Trade Commission
USTR US Trade Representative
W O World Trade Organisation
8
JOINT REPORT ON TRADE, EMPLOYMENT
AND LABOUR STANDARDS
(by the Employment, Labour and Social Affairs Committee
and the Trade Committee of the 0ECD)-
Since the end of the Uruguay Round, the issue of trade and labour-
standards has come to the forefront of the policy agenda. The protracted rise in
unemployment in many OECD countries and in wage inequality in some
countries has led some observers to look for external explanations, including
claims of unfair trade practices associated with competition from firms that
allegedly base their comparative advantage on low labour standards. This view
is challenged by those who see internal structural rigidities as the key factor
behind unemployment and growing wage inequality and who claim that
differences in labour standards do not have any significant impact on trade flows
or foreign direct investment.
The debate has focused on the human rights dimension of certain labour
standards. It is argued that some labour standards reflect basic human rights and
that all countries in the world should therefore adhere to these standards. Claims
are also made that i) those labour standards that embody basic human rights can
stimulate economic development and are therefore in the interest of all workers
(and countries) in the world; and ii) observance of these labour standards could
neutralise protectionist pressures, thus securing support for free trade.
However, there are significant differences of opinion on how such labour
standards can be promoted. Some take the view that the international community
should exert pressure on those countries that do not observe these standards, with
.
the possibility of trade sanctions as a last resort, Others remain unconvinced that
new international promotion mechanisms are required, in addition to those
available in the International Labour Organisation (ILO), and fear that the
defence of human rights would be captured by protectionist interests. More
fundamentally, the issue arises as to whether economic development (associated,
for example, with trade liberalisation) will gradually improve labour standards, or
whether additional actions (for example, through the imposition of conditionality
criteria in international trade agreements) are needed.
9
In June 1994, Ministers invited the OECD Secretariat to undertake an
analysis of “areas where further progress with liberalisation and the strengthening
of the multilateral system may be required”. These areas included “trade,
employment and internationally recognised labour standards, including basic
concepts, empirical evidence in trade and investment patterns, and current
mechanisms €or promoting higher labour standards world-wide”. Responding to
this mandate, the Trade Committee and the Employment, Labour and Social
Affairs Committee began jointly an analytical programye to examine these
issues, in close co-operation with other relevant OECD Committees and
Directorates as well as other international organisations, in particular the ILO.
The attached study is the result of this exercise. Its purpose is to shed some light
on the analytical aspects of this issue, while also evaluating mechanisms to
promote core labour standards world-wide.
Selection of core labour standards and their implementation
’
The debate on trade and labour standards has been made more complex
because of a lack of agreement on a list of the labour standards that are relevant
to this issue and their definition. Part I of the study identifies a small set of
labour standards, termed “core” for the purposes of the study, which are widely
recognised to be of particular importance: elimination of child labour
exploitation, prohibition of forced labour, freedom of association, the right to
organise and bargain collectively, and non-discrimination in employment.
The choice of these labour standards is based primarily on the fact that they
embody important human rights and that they derive from the Universal
Declaration of Human Rights. The universality of these basic labour rights has
been highlighted in the conclusions of the recent World Social Summit. In
addition, three United Nations acts (the Covenant on Economic, Social and
Cultural Rights, the Covenant on Civil and Political Rights and the Convention on
the Rights of the Child), which contain relatively detailed provisions on core
labour standards, have been ratified by over 120 countries, suggesting that these
standards receive near-universal adherence. It is also important to note that all
countries which are members of the ILO subscribe to the principles of freedom of
association and collective bargaining by v h e o f their membership.
Certain E0 Conventions provide for internationally negotiated definitions of
core standards: Conventions 87 and 98 provide detailed provisions on freedom of
association, the right to organise and collective bargaining; Conventions 29 and
105 establish the prohibition of dl forms of forced labour; and Convention 111
10