Trade and Jobs in Europe: Much Ado about Nothing?

By Mathias Dewatripont; André Sapir et al. | Go to book overview

8. Brief History of the Social Clause in Trade Policy

PAUL BAIROCH


8.1 Introduction: What it is and Where it Came From

We shall begin this chapter with a succinct--and, therefore forcibly incomplete-- definition of the term 'social clause'. The body of the chapter will provide the remainder of our definition. A social clause is a clause that may be included in a customs tariff (or other commercial instrument) and which sets forth sanctions to be applied against the importation of products from countries that do not enforce a minimum standard of working conditions. The idea that the differences in social conditions from one country to the next can influence international trade is quite an old one. It can be traced at least as far back as the end of the eighteenth century. Testifying to this is the text written in 1788 by the renowned French financier and statesman, Jacques Necker. In chapter 9 ( Consideration of another objection: the day of rest) Necker points out that 'the country which, out of barbarian ambition, would abolish the day of rest prescribed by religion, would probably attain a certain degree of superiority if it were the only country to do so; but as soon as other nations follow the lead, this advantage would be lost, and shares in sales would return to what they had been prior to the change. The same reasoning demonstrates that countries where days of rest are multiplied beyond the norm will have a disadvantage with respect to countries that have selected as days of rest only the holy days imposed by the church.' Let us point out here that Necker is considered by certain historians of the ILO--and, in particular, by André de Maday ( 1921)--as one of the precursors of the organization. In an article published in 1935, de Maday esteems Necker even to be a precursor of social policy in general. We say that the idea that social policy affects the competitiveness of a country on the international scale has been around since at least the end of the eighteenth century; in fact we are convinced that it can be traced back even further than Necker, not only in Western economic and social philosophy, but also in that of other civilizations.

On a more tangible level, the social aspect became part of the economic debate in the 1830s during lively discussions concerning the new English commercial policy introduced in 1815. But it was not until the 1870s and the development of the USA that pressure really grew for what would be called, a century later, the social clause.

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