Free Trade Agreements and Labour Rights: Recent Developments

Article excerpt

The debate over whether international trade and respect for certain labour rights should be linked is an old one. In fact, it dates back to the very first attempts to establish international labour regulations in the nineteenth century.1 During the industrial revolution, the charitable urge to impose constraints on appalling working conditions was set against a preoccupation that was economic in nature. Indeed, entrepreneurs wishing to introduce improvements in employment conditions could find themselves at a competitive disadvantage in that their production costs rose as a result. They therefore sought to secure generalized minimum guarantees for wage earners and regulations that were applicable to everyone.2

Pioneers like Englishman Robert Owen and Frenchman Daniel Le Grand, amongst others, were indeed concerned that stiff economic competition between manufacturers and countries would constitute an obstacle to the introduction of the necessary changes. Although they had moral arguments in their favour for wanting to improve the welfare of poor workers, they also had an obvious economic self-interest. But while their vision was not embraced by their contemporaries, it paved the way for the adoption, years later, of certain measures in this respect. Indeed, the desire to ease the plight of workers, coupled with the fear that any easing of employment conditions would work in favour of foreign competitors, led at the end of the nineteenth century to a multitude of efforts for international legislation.

These preoccupations were still present when the International Labour Organization was founded. In fact, the creation of the ILO in 1919 addressed this issue to a certain extent, at least from a political point of view. The Preamble to its Constitution asserts that: "The failure of any nation to adopt humane conditions of labour is an obstacle in the way of other nations which desire to improve the conditions in their own countries."3

While the debate was certainly not settled, nearly 30 years later, in 1948, the idea of providing for protection of workers' basic rights in trade agreements was taken up in the Havana Charter, which was intended to launch the International Trade Organization. But these efforts failed. Multilateral trade institutions were indeed set up - beginning with the entry into force of the General Agreement on Tariffs and Trade (GATT) in 1948,4 followed by the establishment in 1994 of the World Trade Organization (WTO) - but neither of them included protection for labour rights in their regulations (see generally Charnovitz, 1987, p. 565).

Against this historical background, the discussion presented in this article is divided into nine sections. The first looks at current international efforts to promote fundamental labour standards in the context of globalization. The following five sections examine the emergence and growing use of labour clauses in free trade agreements, including a detailed analysis of provisions for labour rights under some of the most recent agreements. The next two sections review the economic and other arguments for promoting social justice alongside trade liberalization. A final section offers some concluding remarks.

The emergence of globalization

The founding principles of international labour law have undoubtedly acquired a new dimension in the context of globalization. While globalization of the world economy has evidently had some positive effects, it has also induced widespread concern regarding employment conditions and income inequalities. The diffusion of technological innovations has tended to widen the gap between rich and poor, disrupting the international division of labour, modifying its nature and killing some jobs without necessarily creating enough new ones. There is also a widespread perception that the process of global economic integration is increasing the disparity in bargaining power between capital and labour.

Freer trade, along with greater foreign investment and financial flows, has benefited many while leaving many others vulnerable and voiceless. …