International Trade and Child Labor
Hasnat, Baban, Journal of Economic Issues
Child labor has emerged as a serious, widespread, and growing problem in many parts of the world. The International Labor Organization (ILO) estimates that at least 115 million children under the age of 15 are employed worldwide [ILO 1993]. In some countries, children constitute up to 26 percent of the total labor force. According to ILO, India has more than 44 million child laborers. Child labor is mainly a problem of developing countries, but it is not confined to them. In 1988, more than 4 million children in the United States were employed [Corbin 1988].
In recent years, developed countries have taken initiatives to eliminate child labor worldwide by linking trade and prohibition of child labor. For example, the U.S. Congress is considering a bill to ban goods made by children from the U.S. market [U.S. Congress 1993]. Many developing countries, where 98 percent of all child labor is found, are opposed to such global prohibition of child labor. The developing countries consider these initiatives to be disguised protectionism and claim that their children are being used to protect jobs in the developed countries.
The basic cause of child labor in developing countries is, of course, poverty. However, poverty alone is not responsible for the practice because child labor is rooted in traditions, attitudes, and customs. The central proposition of the paper is that attempts by the developed countries to link trade and child labor are based on questionable presumptions. The paper reminds policymakers of the historical evidence about the spread of literacy and education in eliminating child labor. The conceptual basis of the paper is the institutional theory of the external sector [Adams 1987]. The distinctive feature of this theory is that it focuses on trade and payments as an "instituted process": a society's external economic relations depend not only on physical endowments and technology, but also on institutions.
Attempts to Link International Trade and Child Labor
The linking of international trade and child labor is not a new idea. Calls for the elimination of child labor worldwide first came from labor unions. In 1917, the American Federation of Labor (AFL) demanded that the peace treaty that would end World War I should include a provision stating "no article or commodity shall be shipped or delivered in international commerce in the production of which children under the age of 16 have been employed or permitted to work" [Gompers 1919, 337]. The AFL took the proposal to the Labor Commission but failed to obtain its inclusion in the Treaty of Versailles. The Congress of Industrial Organizations (1943), the Textile Workers Union of America (1945), and the British Trades Union Congress (mid-1950s) continued to press for international treaties to prohibit the movement of goods produced in violation of international labor standards including child labor [Charnovitz 1987].
The failed draft charter for the International Trade Organization (1947) proposed, among others, a minimum age for employment. When the General Agreement on Tariffs and Trade (GATT) became the de facto forum for trade negotiations, fair labor standards and its provisions were relegated to the United Nations Declaration of Human Rights [Tonya 1992]. The rights of children were not agreed upon, except to note that they must be educated and protected. The United States made several unsuccessful attempts in the 1980s to include a fair labor standard clause in the GATT negotiations.
Multilateral trade agreements, such as the European Economic Community (1957) and the North American Free Trade Agreement (1994), included a "social clause" for fair labor standards. Several commodity agreements, such as the Tin Agreement (1981), the Cocoa Agreement (1986), the Sugar Agreement (1987), and the Natural Rubber Agreement (1987), contain provisions requiring fair labor standards [Servais 1989].
The Case of the United States
No country has taken such far-reaching actions in linking international trade and prohibition of child labor as the United States has in recent years. …