The Link between the WTO and the ILO

There was extensive debate both before and during the first Ministerial WTO conference (Singapore, December 1996), on the issue of the 'social clause'. A large number of Third World countries, as well as some leading industrialized countries, threatened to allow the Conference to fail in the event of a decision meaning that free world trade would in future be restrained by far-reaching demands on working conditions throughout the production process. In Singapore, it was decided to pass the problem on to the ILO. In the meantime the ILO, partly in reaction to the WTO decision of December 1996, has issued a new declaration (the 'Declaration on Fundamental Principles and Rights at Work' passed at the International Labor Conference of June 1998), in which it declares that all members of the ILO 'even if they have not rati-fied the Conventions in question', are under a duty 'to promote and to realize, in good faith and in accor-dance with the Constituti-on, the prin-ciples concer-ning the fundamen-tal rights which are the sub-ject of those Conventions, name-ly: (a) freedom of association and the effective recognition of the right to collective bargaining; (b) the elimination of all forms of forced or compulsory labor; (c) the effective abolition of child labor; and (d) the elimination of discrimination in respect of employment and occupation.' The new Declaration is accompanied by a tightening up of the existing supervisory arrangements, in which 'annual reviews' of states' practices will result in annual 'global reports'. However, the progress that appears to have been made was not reflected at the second Ministerial WTO Conference (Geneva, May 1998). According to the Dutch report, this was partly intended to be a Conference 'which should avoid controversial questions such as standards on working conditions' (parliamentary report, Dutch Lower House, 1997-1998, 25074, No. 11, 15 June 1998).
This set of facts leads to the following research questions:
- there is an obvious tension between completely free competition and the imposition of social requirements on the production process (they can distort competition). How far is it possible to go in imposing such requirements, given the current state of European and international law? Can this problem be compared with the tension between completely free competition and the possibility of national policy making on ethical questions (see project section 4.5.4)?
- How far can NGOs go, from their specific areas of responsibility, in imposing social requirements (whether or not supported by national and supranational authorities turning a blind eye), without coming into conflict with the rules of free competition? Can this be compared with the problems with the imposition of requirements on ethical grounds (see project section 4.5.4)?
- How will the WTO and the ILO continue to interpret the agreements in principle from Singapore 1996, and what division of roles is envisaged between companies, NGOs and authorities is envisaged here?
- What is yielded by a comparison with developments within NAFTA?