Non Trade Issues

1. Non Trade Issues Shashank Priya Director, Trade Policy Division

2. LABOUR ISSUES IN WTO • On conclusion of UR, US raised the issue of linkage between trade and core labour standards (CLS) • India’s proposal- relationship between trade and immigration policies be examined in WTO • US did not pursue the issue further for sometime

3. Singapore Ministerial Conference • In 1996 SMC, US proposed to include labour standards as an agenda in the WTO but failed • SMD endorsed the stand of DCs: • ILO is the competent body to deal with CLS and WTO affirms its support in promoting such standards • It rejected the use of labour standards for protectionist purposes and agreed that the comparative advantage of countries, particularly low wage DCs must in no way be put into question • WTO and ILO Sects. would continue their existing collaboration

4. Seattle Ministerial Conference • Concerted attempts by developed countries to include labour linkage in WTO agenda • Proposals made for Working Party either inside or outside WTO • Strong opposition by DCs led by India • Seattle failed

5. Post-Seattle Developments • No formal proposals in WTO post-Seattle • EU/US Summit meeting called for linkage • Trade and Development Act 2000 passed in US-inclusion of forced/indentured child labour in definition of forced/indentured labour • Linkage of CLS with GSP Scheme estd.-specifically ILO Convention 182 (Elimination of worst forms of child labour) • UNCTAD X Conference of 2000 made no mention of any work relating to Trade and Labour

6. Broad Stand of Countries • US-set up a working group in WTO to deal with issues like Trade and Employment, Trade and Social Protection, including CLS particularly Child Labour. Favoured use of trade sanctions for non-implementation of CLS • EC-have a joint ILO/WTO Working Forum on Trade, Globalisation and Labour issues outside WTO to promote dialogue between govt. employees, trade unions etc. Rejected use of trade sanctions

7. India’s and other DCs Stand • Fully committed to observance of CLS and promotion of labour welfare through domestic policies • Issue of CLS at international level can be addressed only by ILO and not WTO • Reject the concept of linkage between trade and CLS as it can be a protectionist device hindering the comparative advantage of low wage developing economies

8. India’s and other DCs Stand (contd) • Use of trade sanctions to implement CLS would be counter productive as this could aggravate lower standards and poverty • Poverty is the root cause for lower commitment to CLS and cannot be tackled by trade sanctions • SMD has clearly rejected the linkage • ILO is taking effective steps to implement CLS. E.g. In 1999 the International Labour Conference unanimously adopted a Convention on the Elimination of Worst Form of Child Labour.

9. Possible Consequences of including labour in WTO • Possibility of trade sanctions being imposed by developed countries • Comparative advantage of cheaper labour could be neutralised in small scale and handloom sectors • Sovereignty of domestic laws could be compromised • Use of extra territorial authority for enforcement of various CLS • Possible resort to DSU for any violation of CLS • Enhanced role for NGOs in WTO through backdoor • Possibility of financial and technical assistance provided by developed countries, multilateral orgns, etc., being linked to adoption of CLS

10. Doha Ministerial Declaration • DMD reaffirmed the declaration made in SMD regarding internationally recognised CLS • It took note of the work underway in the ILO on the social dimension of globalisation

11. Core Labour Standards and ratification status in India • Convention No. 29 concerning forced labour-ratified • Convention No. 111 concerning discrimination in employment and occupation-ratified • Convention No. 100 concerning equal remuneration-ratified • Convention No. 105 concerning abolition of forced labour-ratified • Convention No. 87 concerning freedom of association-not ratified because of separate treatment of govt. servants

12. Core Labour Standards and ratification status in India • Convention No. 98 concerning collective bargaining-not ratified because of separate treatment of govt. servants • Convention No. 138 concerning minimum age of entry for employment-not ratified • Convention No. 182 concerning elimination of worst forms of child labour-not ratified

13. Trade and Environment debate • Link between trade and environmental protection recognised since 1970s • 1972 Stockholm Conference on Human Environment- GATT Sectt prepared a study titled “Industrial Pollution Control and International Trade” reflected concerns of “green protectionism” (environmental protection policies becoming an obstacle to trade)

14. Trade and Environment debate (contd) • This study led to creation of a Group on Environmental Measures and International Trade (‘EMIT’ group) in GATT in 1971 • The group to convene only at the request of Contracting Parties • First request came only in 1991 by members of EFTA (Austria, Finland, Iceland, Liechstentein, Norway, Sweden and Switzerland)

15. Why Environmental Issues became important by 1991? • Tokyo Round Agreement on TBT tried to address the concern how environmental measures could create obstacles to trade-it called for non-discrimination in preparation, adoption and application of technical regulations and standards • Concern of DCs regarding continued export of DPGs by developed countries to DCs

16. Why Environmental Issues became important by 1991? • Dispute between Mexico and US (1991) regarding US embargo on import of tuna from Mexico caught using purse seine nets which resulted in the incidental kill of dolphins-Mexico won the case in GATT • A 1987 report of World Commission on Environment and Development called Our Common Future (Brundtland Report) identified poverty as one of the most important causes of environmental degradation- ‘Pollution of Poverty’ could be combated by greater economic growth through increased international trade-term ‘sustainable development’ coined

17. Outcome • EMIT group focused on effects on environmental measures (like eco-labelling schemes) on international trade, relationship between MTS rules and trade provisions in MEAs, and transparency of national environmental regulations with an impact on trade • Ministerial decision of UR on Trade and Environment (April 1994) led to formation of CTE as a successor to the EMIT group

18. CTE Agenda • 10 Agenda items seek a balance of issues of interest to developing and developed countries • Relationship between MTS provisions and trade measures in MEAs-EC proposed amendment to GATT Article XX to include ‘protection of the environment’ as one of the exceptions to WTO rules; status quo proposed by India, Egypt and Mexico; ASEAN proposed further tightening of environmental exceptions to reduce disguised protectionism

19. CTE Agenda (contd) • Relationship between environmental policies relevant to trade with significant trade effects and the provisions of MTS-developed countries wanted to incorporate some principles of CBD in WTO like Rio principles 17 (encouraging environmental impact assessment) and 15 (precautionary principle). India insisted on other principles like 7 (common but differentiated responsibility of nations towards environment) and 11 (equivalence in the wake of differential standards)

20. CTE Agenda (contd) • Relationship between MTS provisions and environment related border taxes and other requirements like standards, regulations, packaging, labelling etc.- India and some other DCs strongly oppose inclusion of npr-PPMs ( non-product- related-Processes and Production Methods) in any manner in TBT Agreement. EC wants to include eco labelling schemes by an amendment to the TBT Agreement (npr-PPMs are measures that relate to processes that do not impart any distinguishing characteristics to the final product e.g. organic products produced without chemical fertilisers; incorporated PPMs-pesticide free cotton)

21. CTE Agenda (contd) • Provisions of MTS with respect to transparency of environmental measures-US has suggested environmental reviews of national policies under TPRM. India- environmental reviews of trade measures are best done at the national level • Relation between dispute settlement mechanism in MTS and MEAs- EC wants a decision in WTO that any action under an MEA would be considered as WTO compatible. India and other DCs do not favour such a a-priori decision

22. CTE Agenda (contd) • Effect of environmental measures on market access, particularly of DCs and environmental benefits of removing trade restrictions and distortions-discussion has centred around the issue og agricultural subsidy. India has proposed safeguarding the market access of DCs from unwanted trade effects of environmental policies • Export of DPGs-African countries have demanded disciplines on developed countries to prohibit export of DPGs

23. CTE Agenda (contd) • Relationship of TRIPS Agreement to (a) TOT and development of environmentally sound technologies and (b) MEAs, which contained IPR related obligations-India has made two proposals: (i) where environmentally sound technologies and products are mandated in national or international laws, right holder should be obliged to make them available on fair terms to DCs; (ii) Harmonise different approaches towards biological materials and traditional knowledge in TRIPS and CBD (patent applicant to disclose source of origin of biological material or TK accessed for invention)

24. Doha Mandate on environment negotiations Para 31 of DMD mandates negotiation on • Relationship between existing WTO rules and specific trade obligations set out in MEAs; • Procedures for regular information exchange between MEA Sectts and the relevant WTO Committees; • Market access negotiations for environmental goods and services

25. Doha Mandate on environment negotiations (contd) Para 32 of DMD mandates CTE to give particular attention to following agenda of its work: • The effect of environmental measures on market access specially in relation to DCs; • The relevant provisions of TRIPS; • Labelling requirements for environmental purposes

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