Human Rights, Labor Rights, and International Trade

Terry Collingsworth

The emergence of the global economy in the last two decades has greatly affected conditions for workers around the world.¹ Employers are now free to search the world for cheap labor and pit workers in one country against another in a downward bidding spiral for rights and wages. Citing the dual goals of improving conditions for workers in developing countries and slowing the loss of manufacturing jobs in the United States,² Congress passed new laws designed to protect "internationally recognized worker rights" by conditioning some form of trade benefit on compliance with international standards of worker rights.³

The most significant of these laws is the Generalized System of Preferences Act (GSP),⁴ which provides duty-free status for many products exported to the United States from developing countries. Under the labor rights clause, duty-free treatment could be denied unless the exporting country "has not taken or is not taking steps to afford internationally recognized worker rights to workers in the country."⁵

Unfortunately, successive U.S. administrations have been lukewarm at best, when not openly hostile, in enforcing the worker rights provisions of the law. They are careful not to offend the American multinational companies (MNCs) that benefit from ready access to cheap labor in developing countries and undertake large-scale transfers of production to developing countries. The real tragedy of the GSP program, as it has been implemented, is the failure to achieve one of the clear goals of the program: to supplant direct foreign aid to developing countries by giving their industries a competitive advantage, through tariff concessions, to allow them to grow and share the prosperity with workers, who could then be expected to increase global consumption.⁶

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