human rights. Similar corporate pressure has staved off U.S. sanctions for human rights and labor rights violations in Indonesia, Malaysia, and other authoritarian countries with large-scale U.S. investments. At the same time, hoping to appear responsive to human rights concerns, several corporations and U.S. government officials announced plans for a "code of conduct" for businesses operating in countries with authoritarian regimes.

Some human rights and labor rights advocates in Mexico, the United States, and Canada, along with their environmental counterparts, challenged the terms of the North American Free Trade Agreement for failing to address sufficiently their concerns. In response, the Clinton administration obtained supplemental agreements covering labor rights and environmental protection, creating new arenas for advocacy in those areas. NAFTA was approved and took effect January 1, 1994.

In July 1994 the U.S. Congress approved a labor rights clause in a bill authorizing funding for the Inter-American Development Bank, the World Bank, and the International Monetary Fund. The amendment obligates U.S. representatives to multilateral lending institutions to ensure respect for international labor rights as a condition of approval for countries seeking development loans. The first instance of labor rights linkage to international lending programs, this amendment adds to an array of U.S. worker rights clauses in statutes governing the Generalized System of Preferences, the Overseas Private Investment Corporation, Section 301 of the Trade Act, the Caribbean Basin Initiative, and Agency for International Development trade promotion programs.

In Europe, an ambitious Social Charter and the related Social Chapter of the Maastricht Treaty on economic and political union have run headlong into a stubborn recession. Faced with budget deficits, many governments have begun scaling back social protections. Pressured by global competition, many European companies have eliminated jobs and shifted operations abroad, including to the now relatively low-cost United States. At the same time, social obligations under the Europewide legal system are shown still to be effective: a European Court of Justice decision in June 1994 found the United Kingdom -- the most reluctant "unionist" in Europe -- to have violated a European Union directive on worker consultation, raising the prospect of substantial damage payments to affected workers.

These and other examples indicate the frequency with which human rights and labor rights issues are arising in the international trade arena. A distinction somewhat comfortably maintained by "trade hands" who managed the post-World War II international economy -- that trade is strictly a commercial function with no immediate connection to social concerns -- has evaporated under the pressure of political and social

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