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TRADE UNION STATEMENT ON
THE AGENDA FOR THE 6TH MINISTERIAL CONFERENCE
OF THE WORLD TRADE ORGANISATION (WTO)
(Hong Kong, 13-18 December 2005)

I. Introduction

1. The creation of decent work must be the central priority of governments, and the main element of a truly development-focused round of trade negotiations. Trade should be an important factor in the attainment of development and the creation of decent work, but for many workers the international trading system is either irrelevant or, worse, is undermining this objective. In developing countries and industrialised countries alike, agriculture, job security and decent livelihoods are seen to be menaced rather than enhanced by unfair trade, while multinational companies threaten to shift production to where workers’ rights are denied and labour is cheap. For hundreds of millions of workers around the world, there is a deep loss of confidence in the international trading system that governments must address at Hong Kong and beyond.

2. The end of the Agreement on Textiles and Clothing (ATC) had been a known fact ever since the end of the Uruguay Round in 1994. Yet nothing had been done to prepare for the dimensions of the shock, demonstrating the serious internal inconsistencies within the World Trade Organisation (WTO) and the whole multilateral system of economic and financial institutions. On the one hand, the trade regulations negotiated and then enforced through WTO procedures inevitably have a major impact on employment, workers’ rights and poverty worldwide. On the other, there is a vacuum at the heart of the organisation due to its delinking from the institutions of the United Nations that are responsible for social development, labour, health, women and the environment, and resulting from its closeness to the Washington consensus-driven policies of the international financial institutions.

3. The undermining of decent work, with a chaotic impact on the international division of labour, is exemplified by China’s assertive entry into major world markets without having to meet even the most basic ILO standards. This is destabilising the world trading system and having a negative impact on employment worldwide, especially in the labour-intensive sectors of developing countries. In the textiles and clothing sector alone, tens of millions of jobs will be lost around the world as production is transferred by multinational companies to China on a massive scale. Governments in many other developing countries are rushing to increase exploitative production in export processing zones (EPZs), with negative effects on EPZ workers most of whom are women, in a last-ditch effort to compete.

4. Expansive promises about the potential of trade liberalisation through the WTO have failed to materialise in terms of more and better jobs and higher growth either worldwide or in developing countries. Indeed, many developing countries that undertook trade liberalisation in line with the policies recommended by the WTO, as well as by the international financial institutions, found deindustrialisation to be the outcome as their domestic industries collapsed in consequence. Among the scarce references to employment issues in the 2004 World Trade Report, all the WTO seemed able to say was that representative workers’ organisations were part of the problem, because of trade unions’ ability to organise their members to resist blind deregulation of the world trading system.

5. Agriculture, the world's single biggest employer, and the rural livelihoods which depend on it, are being undermined through subsidized exports dumped on the world market, a persistent global crisis of over-supply and falling prices in key primary commodities and a trading system which is enhancing the predominance of global agri-food traders, processors and retailers to the detriment of workers and small producers. Rural poverty is one of the principle causes of massive, unregulated migratory labour flows that expose the most vulnerable social groups to dangerous living and working conditions.

6. While a multilateral trading system is capable of providing much greater protection of the interests of small and marginalised countries than bilateral negotiations with larger powers, the WTO needs deep-seated reforms if it is to fulfil that potential. It is vital that the global governance system, which gives undue power and importance to the WTO, the World Bank and the International Monetary Fund, be rebalanced so that social and environmental issues are given equal consideration to trade and the economy. The recommendations of the World Commission on the Social Dimension of Globalisation provide strong support to the long-standing demands of the international trade union movement for coherence between the various multilateral institutions in the world today, on the basis of decent work, respect for human and workers’ rights and other social standards, higher and more equitable growth and an end to poverty. In this year when the UN’s Millennium Development Goals (MDGs) will be subject to review by the UN General Assembly, trade unions and many other organisations around the world are calling for trade justice as part of the Global Call to Action against Poverty (GCAP) with the aim of achieving major progress in the battle to end world poverty, injustice, discrimination and gender inequality. For trade unionists, the creation of decent work is at the centre of this agenda. The recommendations of the World Commission and of GCAP must be taken up by world trade ministers in the preparations for the 6th WTO Ministerial Conference, along with the range of recommendations provided in this trade union statement on the agenda for the Hong Kong Ministerial.

II. Transparency, Coherence, Democracy and Consultation at the WTO

7. In order to achieve a more equitable, inclusive and democratic decision making process in the trade negotiations, WTO working methods need to be transparent and democratic, giving due regard to the views of smaller and poorer countries. The negotiation processes should ensure the effective participation of all members at all stages of negotiations, including in informal settings. Developing country WTO members should continue to enhance their co-operation and co-ordination as they have been doing since Cancún through the G-20, G-33, G-90 and similar such processes, and which is greatly improving internal WTO transparency. Transparency is needed in domestic decision-making processes relating to trade as well.

8. The WTO must be made more transparent and accessible for trade unions and other representative and democratic organisations. A formal consultative process should be established at the WTO to ensure that trade unions, non-governmental organisations and other representative elements of civil society can present their views to WTO Committees, Working Groups, Negotiating Groups, the General Council and Ministerial Conferences. Genuine processes are further required at national level for consultation of trade unions and other representative civil society organisations on trade issues, with better research and public provision of data (disaggregated by gender) to facilitate such involvement.

9. Trade unions have long called for reform to the WTO’s dispute settlement procedure, a call echoed in the Sutherland report in January 2005 on "The future of the WTO” which recommended opening disputes panel and appellate body hearings to the public, and developing criteria and procedures for handling amicus curiae submissions. The WTO must further give a full role to the UN agencies competent in areas such as health, labour and environment in its disputes procedures.

10. Coherence across the multilateral system is needed. The WTO should take full part in multilateral policy coherence initiatives as one of its measures to establish a closer link and co-ordination with the UN institutions, with reciprocal observer status. This needs to be part of a general initiative to increase the weight given to the recommendations of the UN and its specialised agencies, including the International Labour Organisation (ILO), the FAO and UNCTAD, in the actions and decisions of the WTO as well as the international financial institutions. The UN Inter-Agency Task Force on Gender and Trade should be involved as part of a process of engendering trade agreements, as envisaged in the Platform for Action adopted at the UN 4th World Conference on Women in Beijing in1995.

11. Social, gender and environmental concerns must be incorporated fully throughout WTO mechanisms and structures. The country reports and debates under the Trade Policy Review Mechanism (TPRM) need to include substantive analysis of sustainable development, including social development, a gender impact assessment, and respect for fundamental workers’ rights, in which the ILO and other relevant agencies should be fully involved. WTO members should themselves include such concerns in the reports they submit to the TPRM meetings, as some have already begun to do.

III. Advancing Development and Decent Work for a Decent Life

12. The impact trade has on the level and quality of employment determines whether trade contributes to or detracts from raising living standards, achieving development and eliminating poverty, since the level of decent work is fundamental to the realisation of all these goals of sustainable social and economic progress. Yet the employment consequences of trade are virtually always neglected in trade negotiations, despite these self-evident linkages. This situation needs to change fundamentally so that trade negotiations take place on the basis of a serious and prior analysis of their impact on the level and stability of employment (particularly in labour-intensive sectors), respect for fundamental workers’ rights, equality between women and men, good working conditions, social protection and access to quality public services.

13. Comprehensive ex ante impact assessments of the implications of trade agreements for food security, employment, social conditions, rights, gender and development are therefore needed before they are negotiated or concluded. Such analyses should be conducted on both a multilateral and a national basis, with attention to the impact of trade both on sectors directly affected and on poor and vulnerable workers, most of whom are frequently women. Only with such comprehensive analyses will governments become fully aware of what the implications of signing agreements will be. In addition, sustainability impact assessments (SIAs) should be undertaken at a multilateral as well as national or regional level, with an expansion of the scope of SIAs to cover decent work, gender impact and social priorities.

14. The creation of decent jobs and decent working and living conditions is fundamental to achieving sustainable economic development and eliminating poverty. Yet some governments continue to seek a short-term competitive advantage in international trade through the violation of fundamental workers’ rights – undermining their own long-term development prospects and forcing other countries to follow suit. The WTO must address this situation by implementing the steps outlined below.

15. At the 6th WTO Ministerial Conference, all WTO members must renew their formal commitment to uphold core labour standards. To enable a full examination of the relationship between trade, development and decent work, the WTO must establish a formal process to examine the employment and social impact of liberalising trade, including its synergies with fundamental workers’ rights, implemented with the ILO. Such a body should also address wider trade-related social issues, such as the impact of trade policies on women. WTO members need furthermore to update the WTO agreements (including GATT Article XX and GATS Article XIV) to incorporate UN human rights standards including the core labour standards of the ILO.

16. The women who constitute the overwhelming majority of workers in export processing zones (EPZs) are the primary victims of the exploitation that characterises EPZs. The provision by governments of such cost-cutting measures, and other forms of privileged treatment for export production, is a distortion of WTO rules (particularly when foreign enterprises are treated better than domestic ones) as it means that production for domestic markets is taking place on “less favourable” terms than that of exports. The 6th WTO Ministerial Conference should adopt a clarifying statement to the effect that the weakening of internationally-recognised fundamental workers’ rights in order to increase exports is an illegitimate trade-distorting export incentive that is not permissible under WTO rules.

17. The particularly serious problems in the textiles and clothing sector may require the use, in the short term, of safeguard measures to dampen the shock. They point to the importance of adopting an emergency Policy Coherence Initiative in Hong Kong. Its remit would be to study growth, exports and employment in the textiles and clothing sector after the end of the quota system, with attention to differential gender impact; to put in place a comprehensive industrial and trade policy approach aimed at coping with the impact of the end of ATC in every country where the textile and clothing sector is significant, with different and specific measures tailored to the situation in each case; and to provide international assistance to assist the developing countries concerned (particularly the least developed countries) accordingly.

18. WTO members need to acknowledge the crucial importance of agriculture as the world's largest employer by specifically targeting agricultural workers and the rural poor in strategies to eradicate poverty. Employment promotion must be undertaken to combat rural under- and unemployment and environmental degradation, by focusing on the creation of decent jobs in rural areas for agricultural workers and those in related employment.

19. The 6th WTO Ministerial Conference should take the decision to organise a first-ever meeting of Trade and Labour Ministers, with the participation of trade unions and employers’ organisations.

20. In both industrialised and developing countries, governments must begin to provide adequate levels of adjustment assistance for working women and men displaced by trade, in order to ensure a fair distribution of the benefits and costs of trade liberalisation – to achieve equity between groups within countries, equity between men and women and equity between countries.

21. In line with the objective of trade justice called for in the Global Call to Action against Poverty (GCAP), urgent agreement is needed on a range of issues of benefit to developing countries, complemented by greatly enhanced debt relief and a substantial increase in development assistance.

22. The 6th WTO Ministerial Conference should amend the Trade-Related Intellectual Property Rights (TRIPS) Agreement, or adopt a clarifying statement, to ensure that all developing countries can achieve access to low-cost medicines in case of health need such as HIV/AIDS treatment, as originally envisaged in the statement on TRIPS adopted in Doha. The statement should support compulsory licenses with fair royalties, to ensure the affordability of generic medicines. In the longer term, changes are needed to the TRIPS Agreement to eliminate the requirement for WTO members to amend their patents laws in a way that constitutes a threat to affordable generic medicines. WTO member states must further ensure that bilateral and regional trade agreements do not undermine affordability and so access to generic medicines.

23. Decisions on special and differential treatment should enable developing countries (particularly the least developed) to have adequate flexibility in their implementation and interpretation of the various WTO agreements when favourable to their economic and social development, with clarification of their capacity to extend their WTO implementation deadlines on a multilateral (not a case-by-case) basis. At the same time, the anomaly that some high-income countries are still classified as “developing” under WTO rules needs to be addressed.

24. An evaluation of non-tariff barriers to developing country exports should be undertaken to ensure they are reasonable requirements for consumer and environmental protection, with the involvement of the specialised UN agencies as well as trade unions and other civil society groups concerned, and provision of technical assistance so that developing countries can attain such standards.

IV. The Non-Agricultural Market Access (NAMA) negotiations

25. The current push for deep liberalisation in non-agricultural product markets without parallel progress on development and effective protections for workers’ rights is unlikely to yield the promised benefits for workers in developing or in industrialised countries. The challenges facing least developed countries are even more acute. At both multilateral and national levels, a rigorous assessment needs to be conducted of the impact of NAMA negotiations on development, decent work and people living in poverty, with the full involvement of trade unions representing workers that will be affected by the outcome. Specific attention is needed to labour-intensive sectors, including analysis of the gender impact. Governments should not make deals in such negotiations except on the basis of a clear picture of the likely implications, such that they can implement industrial policies to attain their development and employment goals.

26. Provision of national and international funding is needed to support employment adjustment assistance when jobs are lost as a result of trade liberalisation.

27. Both developing and industrialised countries need to have the policy space to undertake legitimate domestically-based industrial development strategies. NAMA negotiations should not overly restrict that flexibility, in making commitments on how many tariffs will be bound or at what level. However, countries with import markets of interest to least developed countries should address problems of tariff escalation and tariff peaks to enable them to process their own primary commodities. In general, improved market access for developing countries is needed, particularly for least developed countries, parallel with progress on respect for fundamental workers’ rights in order to ensure that developing country workers benefit.

28. A clause is needed in the NAMA negotiations that would enable any developing countries (particularly least developed countries) that do bind their tariffs, to be able to alter that commitment on grounds of justified social and development purposes.

29. Developing countries, particularly the least developed, should have the right to retain higher tariffs if they so wish, in line with the principle of “less than full reciprocity” contained in the Doha Ministerial Declaration. Any decision to reduce tariffs by developing countries should be taken on an optional basis as a strategic policy decision, not as a requirement under the NAMA negotiations.

30. Similarly, in any decision on rapid advancement of NAMA negotiations under a “sectoral approach”, developing countries should not be put under pressure to take part where they consider that it is not in the interests of their economic development.

31. Preference erosion stands to be a serious problem for many developing countries currently benefiting from agreements such as the Cotonou Convention or the Africa Growth and Opportunity Act (AGOA). Full impact assessments are needed in such cases, with time for adjustment before any changes to preferential regimes are implemented, and provision of adjustment assistance to assist the countries concerned to come to terms with such changes.

V. Services

32. The current negotiations under the General Agreement on Trade in Services (GATS) risk undermining the universal service obligations of governments and their capacity to regulate. Such obligations must not be jeopardised by private sector competition under WTO disciplines and governments must preserve full responsibility and accountability in the area of such services. Therefore, the terms of the GATS agreement should be amended to exclude public services (above all, education, health and essential public utilities such as postal services and telecommunications) including at sub-national levels of government, and socially beneficial service sector activities, from all further GATS negotiations. Across all GATS negotiations, provision should be made on a horizontal basis for access to universal services at uniform and affordable prices. Such universal public provision is also vital in order to move towards achieving the Millennium Development Goals (MDGs). It is especially important because any reduction in public services tends to have its most negative effects on women through reduced access to services such as health care, child support, maternity assistance and so forth. The above conditions and provisions are a prerequisite for continuation of the GATS negotiations.

33. The conditions of secrecy under which the GATS negotiations have been taking place must be brought to an end, with publication of the details of the “requests” and “offers” under negotiation. All WTO members must be entitled to take part in consultations and negotiations, regardless of whether they have submitted a GATS offer or of the content of that offer.

34. In conformity with Article XIX of the GATS, a full development, employment and gender assessment of trade in services is needed both in overall terms and on a sectoral basis. This should be conducted immediately and concluded before the completion of the current negotiating round as a basis for any commitments that are made by governments.

35. The current efforts by some WTO members to establish “benchmarks”, stipulating minimum levels of GATS liberalisation, undermines the principle of a “positive list” approach to GATS (by which countries are free to indicate which sectors they want to include for GATS commitments) and should be ruled illegitimate in further GATS negotiations.

36. Article XXI of the GATS agreement should be amended to include an explicit clause to enable governments to withdraw or diminish their GATS commitments so that they can improve their universal services, on grounds of social or developmental need, without any risk of challenge under WTO rules that could require them to pay compensation (so preventing foreign service suppliers from using the WTO as a tool to maintain market access).

37. Article I.3 (b) and (c) of GATS should be supplemented by a formal statement to make it absolutely clear that ‘the exercise of governmental authority’ allows WTO members to maintain public services (defined by national governments as appropriate to their conditions) without any threat of legal challenge that could require them to open up these sectors to competition or to reduce public support (including through cross-subsidisation) to such sectors.

38. GATS Article VI.4 should be deleted or revised in order to protect effectively the ability of governments to regulate and to enact domestic regulatory measures (in accordance with the preamble of the GATS) without possibility of legal challenge. A clarifying statement should be adopted that social and environmental concerns have primacy over the principle of free trade and that such regulations cannot be subject to any ‘necessity test’ under WTO disciplines based on a principle of ‘no more burdensome than necessary’.

39. With regard to “Mode IV” (i.e. temporary cross-border movement of natural persons), the trade union movement opposes any increase in clandestine migration to the detriment of workers and communities both in the countries of origin and of destination. We underline the far greater desirability of orderly arrangements for permanent migration where necessary, including full measures to guarantee migrant workers equal rights, encourage their full integration (including through acquired rights to permanent residence and citizenship), prevent exploitation by employers and protect them against all forms of discrimination. Temporary migration such as that contemplated under “Mode IV”, by contrast, does not enable such rights to be defended effectively and leaves the men and women migrant workers concerned extremely vulnerable to exploitation. The competences and structure of the WTO do not enable it to regulate migratory movements, including those on a temporary basis such as under Mode IV, in a manner that protects migrant workers’ rights. If any governments do nonetheless make Mode IV offers that would include the temporary movement of workers, these must be agreed with the trade unions concerned on a prior basis and ensure: observance of core labour standards, national labour law (incorporating and going beyond those standards) in the country where the service is delivered, and existing collective agreements in the host country by all parties, with regard to all workers concerned; full involvement of the ILO; protection of the workers concerned against all forms of discrimination and exploitation; and guarantees of the remittance of their contributions to social security and insurance schemes. In the absence of such conditions, GATS negotiations and commitments under Mode IV should not go forward.

40. The cultural diversity of WTO member countries must not be undermined by GATS negotiations, rules or commitments that jeopardise protections of their cultural identity.

41. Regulations to ensure the continued existence of quality retail trade services and of smaller companies that would be unable to compete with large enterprises in a deregulated environment must not be dismantled through the GATS negotiations.

VI. Agriculture and Food Security

42. Ten years of liberalised trade in agricultural commodities under the WTO Agreement on Agriculture have failed to yield the promised benefits. In many countries, food security has been progressively undermined. UN statistics show a dramatic surge in the export of many basic foodstuffs to countries which were formerly capable of meeting these needs through local production. The impact on rural employment has been severe, and is one of the primary factors generating massive global labour migration. The international trade union movement insists that trade agreements must support food security and not undermine it. Where they fail to do so, they need to be revised in the light of international human rights instruments which establish the right to adequate levels of nutritious food at affordable prices as a fundamental human right.

43. The exorbitant levels of agricultural subsidies in most industrialised countries impose heavy costs, generally fail to target subsidies to the poorest farmers and boost the incomes of large wealthy agro-businesses instead. Furthermore, subsidised agricultural exports have artificially depressed prices in many developing countries, leading to the destruction of farms and rural employment. Given existing gender inequalities regarding property rights, access to knowledge and technology, this often has a particularly serious impact on the women who constitute the majority of rural producers in parts of many developing countries.

44. Therefore, the trade union movement proposes the elimination of all forms of agricultural export subsidies, with the setting of an early end-date in Hong Kong for all such subsidies to be terminated. Other agricultural subsidies need to be reduced and reoriented towards sound rural development through employment creation, the eradication of rural poverty, the improvement of employment conditions and the promotion of animal welfare and ecological sustainability. All these measures must be focused on the level and conditions of employment and accompanied by initiatives aimed at providing rural workers with new employment opportunities. In view of the importance of cotton to several very poor developing countries, all trade-distorting cotton subsidies should be phased out as quickly as feasible.

45. Increased national and international efforts are required to address the often serious abuses of workers’ rights and working conditions in the rural sector, including on plantations and in other forms of export production, with particular attention to violence against rural trade unionists and to women’s rights. Concerted, coordinated efforts must be undertaken to eliminate child labour in agriculture, the sector in which it is most prevalent, and to implement substantial improvements in occupational health and safety for rural workers.

46. Strong rights for special and differential treatment concerning agriculture in developing countries (including their requests for special products and a special safeguard mechanism), especially the least developed countries, are needed so that they have the requisite flexibility to defend and enhance domestic agricultural production, in particular to improve food security, food safety, poverty eradication and land reform, and to take other measures as necessary to improve the livelihood of agricultural workers and low-income farmers and to provide safe and decent jobs, with particular attention to women.

47. Adequate technical assistance should be provided to poorer developing countries to ensure their agricultural production for domestic consumption as well as exports can increase. At the same time, developing countries need increased stable and predictable market access to industrialised country agricultural markets.

48. Article 27.3(b) of the TRIPS Agreement should be deleted, or amended to exclude patents on life forms. The mandated review of this article must be undertaken as an urgent priority and in a transparent and comprehensive process involving relevant UN agencies and all affected, and its implications for development and food security reviewed in the light of UN human rights instruments.

VII. Trade Facilitation and the other “Singapore issues”

49. In general, the international trade union movement welcomes the fact that apart from trade facilitation, “Singapore issues” such as investment and competition policy are no longer on the table on the basis of the terms of reference adopted prior to Cancún. There is a continuing need for a strong intergovernmental framework of regulation of investor responsibilities with a view to preventing potential abuse of business power and violations of workers’ rights, and that would implement the terms of the ILO Tripartite Declaration of Principles concerning Multinational Enterprises and Social Policy and the OECD Guidelines for Multinational Enterprises. However, such regulation was not on offer in the proposals that had been made for negotiations at the WTO.

50. Concerning trade facilitation, we would emphasise the need to ensure that the existing competences of UN specialised agencies such as the International Maritime Organisation (IMO) and the International Civil Aviation Organisation (ICAO), which deal with trade facilitation under the same roof as the regulation of safety and security, are not undermined by WTO negotiations that aspire to establish “least trade restrictive measures”.

51. Furthermore, WTO negotiations must not require developing countries (particularly the least developed) to invest in costly modern customs equipment and information technology. Such requirements must not become subject to WTO dispute settlement disciplines. On the other hand, many developing countries would clearly benefit from improved infrastructure in these areas and hence large-scale technical assistance should be provided to help developing countries, particularly LDCs, to upgrade their trade facilities.

VIII. Environmentally Sustainable Development at the WTO

52. Sustainable development needs to be incorporated effectively into every aspect of the WTO’s work, requiring a clarification in the negotiations on Multilateral Environmental Agreements (MEAs) that MEAs, such as the Biodiversity Protocol, take precedence over WTO rules.

53. The 6th WTO Ministerial Conference should further adopt a statement to strengthen the precautionary principle in WTO mechanisms, to ensure that consumers’ or workers’ health and safety can under no circumstances be threatened by WTO negotiations or commitments, or by the rulings of WTO bodies such as disputes settlement panels.

54. In the negotiations on fisheries, harmful fisheries subsidies should be reallocated to areas that would promote sustainable and responsible fisheries practices, address the social aspects of restructuring and improve the life and working conditions of fishers.

55. Forest certification systems represent a model in which labour standards and the promotion of sustainable economies and trade work to complement one another, showing that sustainability requires the total integration of economic, social, and environmental concerns.


IX. Conclusions

56. The Global Call to Action against Poverty (GCAP) is demanding trade justice, which requires decent work, development, gender equality, respect for fundamental workers’ rights, social protection and access to quality public services. Yet it has become increasingly clear that the present structure of the WTO is ill-suited to coping with the complexities of trade’s impact on development and the creation of decent work. Access to a decent life is therefore denied to millions of human beings. Such deficiencies were well-addressed by the recommendations of the World Commission on the Social Dimension of Globalisation for a range of initiatives to provide coherence between the trade activities of the WTO and the rights, development, justice and equity that are promoted by the agencies of the UN, including the ILO. Trade Ministers preparing for Hong Kong must shift their attention from an agenda focused narrowly on trade liberalisation and instead make the WTO agenda relevant to the fight to end poverty and create decent work and a decent life for all. Thereby trade liberalisation could start to fulfil its potential to achieve the goals of full employment and rising living standards enshrined in the articles of agreement of the WTO.

 

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