GB.267/WP/SDL/1/3 - Governing Body

1. At its 265th Session (March 1996), the Working Party asked the Office to prepare an update on the work of other international organizations and bodies concerning the social aspects of the liberalization of trade, a topic addressed earlier in an information note prepared for the Working Party in March 1996,⁽¹⁾ and in an information note prepared in March 1995 for the Working Party. The present document has been prepared on the basis of information and studies available or which the Office obtained in reply to a request sent to a number of international organizations. This document, which sets out to present essentially recent developments, does not therefore offer a complete overview of the question.

A. United Nations bodies

United Nations General Assembly

2. The report of the Secretary-General on the implementation of the United Nations new agenda for the development of Africa in the 1990s⁽²⁾ refers to human development in Africa and mentions in particular the high unemployment rate and underemployment to be found in the region. In the light of the situation, the report indicates that the development of enterprises in the informal sector, which employs more than 60 per cent of urban labour, should be encouraged. It gives special attention to the efforts made to integrate women into the development process in each African country. It also mentions South-South cooperation, considered as a viable development strategy, and the need to diversify the nature of goods produced by the African continent to meet the growing competition resulting from the liberalization of trade. The latter has in fact allowed the clients of many African countries to purchase raw materials, some of an agricultural kind, at increasingly low prices as a result of wider competition. The African countries must therefore expand their exports to include new goods and services in response to demand from the international markets.

Economic and Social Council (ECOSOC)

3. The Commission on Sustainable Development presented the report of the High-Level Panel Meeting on Island Developing Countries.⁽³⁾ Section II, entitled Implications for island developing countries of trade liberalization and the Uruguay Round of Multinational Trade Negotiations points out that in the long run, island developing countries are expected to benefit -- as are other developing countries -- from the global context of trade liberalization, which will bring about new trading opportunities, and from the new multilateral trade framework, which improves rules and disciplines relating to international trade. However, according to the panel, the extent to which island developing countries will be able to benefit from such development will depend on their capacity to manage the transition to a situation of greater integration in the global economy.

4. In conclusion, the establishment of a new multilateral trade framework, characterized in particular by the admission to the World Trade Organization (WTO) of all island developing countries, should also imply a strengthening of human resources and institutional infrastructure development programmes. Although no reference is made to employment policies in the strict sense, the report recommends that measures to enhance socio-political stability, good governance and sound macroeconomic policies should be encouraged.

United Nations Development Programmes (UNDP)

5. The Human Development Report 1996 devotes an entire chapter to questions of employment (Chapter 4: "Translating growth into employment opportunities"), which refers in particular to the globalization of the economy and its possible consequences. The first risk mentioned is that of a growing marginalization of countries producing goods for which the terms of trade continue to decline. The second risk is that of the increasing marginalization of persons least able to adapt to the changes occurring on the labour market.⁽⁴⁾ According to the report, it is increasingly difficult to establish solid links between growth, employment and human development within the framework of a globalized economy. As a means of fighting against this process of growing marginalization, the report recommends the establishment of three kinds of actions: international measures to back up national full-employment policy; international initiatives to increase the levels of skills and education in countries with a low level of human development; the creation of international mechanisms to prevent the marginalization of the least advanced countries. According to the report, the expansion of international trade should lead, in the coming years, to further progress in terms of economic growth. To have any meaning at the human level, this growth must result in human development and also reduce inequalities and poverty. The report also mentions child labour, pointing out in particular that this situation is the result of extreme economic and social exploitation which can be eliminated through vigorous prevention policies.

6. The UNDP office responsible for studies on development recently published a study entitled "Rival States, Rival Firms: How Do People Fit In? The Global Unemployment Challenge". According to this study, a very clear separation is emerging between strictly economic development on the one hand and human development on the other, and this gulf is to some extent the result of the globalization of the economy. However, the UNDP believes that these two objectives can be perfectly reconciled. To this end, national development strategies must be established which take greater account of the globalization process and such strategies must be coordinated at the global level.

United Nations Children's Fund (UNICEF)

7. During the annual session of the Executive Board of the United Nations Children's Fund (UNICEF), reference was made to the rapid globalization of the economy, fuelled by private capital flows and trade, in a trend that offers both opportunities and challenges. It offers opportunities because it encourages world growth, but is a challenge because the rapid liberalization and globalization of the economy have contributed to intense social polarization within and among countries.⁽⁵⁾ Reference was also made to UNICEF activities in this sphere of child labour, and to the signing in 1995 of a Memorandum of Understanding between the Bangladesh Garment Manufacturers and Exporters' Association, the ILO and UNICEF for the gradual elimination of child labour. Other similar initiatives have been developed by UNICEF, in India for example.⁽⁶⁾ The International Child Development Centre in Florence (Italy) participated in the carrying out of country studies on the subject of child labour in Latin America.⁽⁷⁾ The document examining UNICEF policies and strategies on child protection points out that account must be taken of the diversity and complexity of country situations in the collection of data on children. UNICEF believes that international advocacy positions must not be hijacked or subverted to protect multinational industry interests, to promote a particular image for an organization or donor, or to scapegoat certain developing country governments and cultures.⁽⁸⁾

United Nations Conference on Trade and Development (UNCTAD)

8. The secretariat of the United Nations Conference on Trade and Development (UNCTAD) has to a large extent focused its activities on the preparation and holding of UNCTAD IX, which was held between 26 April and 10 May 1996 in Midrand (South Africa). At this session, the member States of UNCTAD adopted the Midrand Declaration⁽⁹⁾ as well as the final document of the Conference entitled "A partnership for growth and development".⁽¹⁰⁾ These documents examine, within a development perspective, the phenomenon of the globalization of the economy and the liberalization of international trade. The documents analyse such themes as globalization and development, trends in the international trade in goods and services, the problem of commodities, the promotion of investment and the development of enterprises. The Midrand Declaration notes in particular that the impact of globalization and liberalization is uneven and recommends the establishment of a mutually beneficial multilateral trading system.

9. As regards the new and emerging issues on the international trade agenda, a matter previously examined by the Trade and Development Board, the Conference decided that UNCTAD should undertake studies on these subjects, in cooperation with the WTO and other international organizations, once the Conference or the Trade and Development Board had identified them.

10. The secretariats of UNCTAD and the WTO, with the assistance of the International Trade Centre UNCTAD/WTO, for the first time prepared a joint document on strengthening the participation of developing countries in world trade.⁽¹¹⁾ This study, which focuses on trade aspects, may be of interest to members of the Working Party in so far as it mentions the economic, trade and institutional problems of developing countries undergoing a process of liberalization of trade. Also within the framework of the International Trade Centre UNCTAD/WTO, UNCTAD published on 30 April 1996 a draft document entitled International trade and employment: An analysis of international trade patterns in selected industries characterized by different types of commodity chains. This study, carried out in cooperation with the International Institute for Labour Studies of the ILO, analyses the main changes which have occurred in the manufacturing industry, in particular as regards the origin and commercial destination of these products.

11. During the tenth annual series of informal consultations between UNCTAD and the representatives of trade union organizations which was held in June 1996, special attention was given to the results of UNCTAD IX, as well as to two other subjects: the social clause and labour standards and international trade. The following trade unions participated in the consultations: World Federation of Trade Unions (WFTU), World Confederation of Labour (WCL), International Confederation of Free Trade Unions (ICFTU), Organization of African Trade Union Unity (OATUU) and the All China Federation of Trade Unions (ACFTU). ILO representatives also participated in the discussions.

12. The Trade and Development Report 1996 examines in particular development experience in East Asia. It points out that a possible extension of this development model to other countries requires not only the pursuit by the developing countries of fruitful trade, industrial and technological policies, but the opening up of markets in the industrialized countries. This opening of markets will depend on the ability to find solutions to the serious problems of the labour market affecting these industrialized countries. As was the case last year, the 1996 report rejects the idea that it is the growing penetration of the markets of the industrialized countries by the developing countries which is responsible for the employment problems experienced by the industrialized countries.

13. Several UNCTAD technical cooperation projects to help developing countries within the framework of international trade negotiations are currently focused on themes related to the preparation of the first WTO Ministerial Conference scheduled to be held in Singapore between 9 and 13 December 1996. UNCTAD is in particular involved in the preparation of several informal meetings for high-ranking officials of the developing countries. For example, a meeting organized jointly by the Economic and Social Commission for Asia and the Pacific (ESCAP), UNCTAD and the UNDP for high-ranking Asian officials was held in Jakarta (Indonesia) between 4 and 6 September 1996.

United Nations Development Fund for Women (UNIFEM)

14. The United Nations Development Fund for Women (UNIFEM) pointed out that a reader of texts on women and trade was currently being prepared and that the final version of this document should be ready at the beginning of 1997.

United Nations Research Institute for Social Development (UNRISD)

15. The United Nations Research Institute for Social Development (UNRISD) reported that it has not undertaken to date any research or study on the social dimension of the liberalization of international trade.

United Nations University (UNU)

16. The United Nations University (UNU) reported that its World Institute for Development Economics Research (UNU/WIDER) had carried out several research studies which may be related to the subject of interest to the Working Party, including for example a study entitled Poverty, income distribution and well-being during the transition. UNU/WIDER is currently carrying out two other projects which may have a link with the social dimension of the liberalization of international trade. These two projects are entitled respectively: New models of provision and financing of public goods and The wave of emergencies of the last decade: Causes, extent, predictability and response.

United Nations Economic Commissions

Economic Commission for Africa

17. The Programme Planning, Finance and Evaluation Division of the Economic Commission for Africa (ECA) informed the Office that it had addressed this subject, in particular through a study analysing the anticipated impact of the agreements of the Uruguay Round on selected high-priority trade sectors, as well as their adverse effect on the economies as a whole, including the social aspects. The conclusions and recommendations contained in this study were placed on the agenda of a conference on the post-Uruguay Round challenges, which was convened jointly by the Organization of African Unity (OAU) and the ECA in Tunis (Tunisia) on 27 October 1994. On the basis of this analysis, the conference adopted a document entitled The implementation of the Uruguay Round agreements by African countries: A framework for action.⁽¹²⁾ This document refers to the Marrakesh meeting which concluded the Uruguay Round and the list of items which might be included on the agenda of the first meeting of the WTO Ministerial Conference. The document merely states that study should be made of the possible implications of these questions for the African continent and their possible consequences on the agenda of Africa in future trade negotiations.

18. The questions relating to the promotion of growth and sustainable development within the framework of an economy undergoing globalization and liberalization constituted the main point of discussion at the Conference of African Ministers responsible for Trade, Regional Cooperation, Integration and Tourism, convened by the ECA between 7 and 16 February 1996 in Addis Ababa (Ethiopia). The conclusions and recommendations of the Conference are contained in the Addis Ababa Declaration on UNCTAD IX.⁽¹³⁾ This Declaration emphasizes the need for Africa to take innovative measures to promote growth and sustainable development within the framework of an economy experiencing globalization and liberalization. Such measures should in particular provide a response to the challenges posed by unemployment, poverty and the wide disparities in the quality of life.

Economic Commission for Europe

19. The United Nations Economic Commission for Europe replied that the issue was still not part of its mandate, although it was interested in participating as an observer in the activities of the Working Party.

Economic and Social Commission for Western Asia

20. The Human Development Section of the Social Development Issues and Policy Division of the Economic and Social Commission for Western Asia (ESCWA) is currently assessing the social impact of the structural adjustment programmes,⁽¹⁴⁾ including the Bretton Woods programmes, as well as the reform process necessitated by the rapidly ongoing globalization trend. In this framework, the liberalization of international trade is being studied with attention. This activity is expected to continue during the next biennium (1998-99). ESCWA would like to be informed of the ILO activities concerning the social dimension of development policies.

Economic and Social Commission for Asia and the Pacific

21. The International Trade and Economic Cooperation Division of the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP) reported that subprogramme 1 of the ESCAP work programme for the biennium 1996-97 concerns regional economic cooperation and includes in particular activities relating to the implementation of the Uruguay Round agreements and their impact on Asian and Pacific economies and on international trade in general.

22. The first ESCAP activity in this sphere was carried out within the framework of the preparation of the first meeting of the WTO Ministerial Conference. Thus ESCAP organized, jointly with UNCTAD and the UNDP, a meeting for high-ranking Asian officials. The ILO Deputy Regional Director for Asia and the Pacific participated in this meeting which was held in Jakarta (Indonesia) from 4 to 6 September 1996. The meeting examined in particular the question of the international trade system and the social clause, as well as implications related to the introduction within the WTO of a link between trade and labour standards. The Deputy Director-General gave the keynote address at the meeting. An ESCAP official presented a text which served as the basis for discussions on the subject. This text refers to the discussions under way in the Working Party of the ILO Governing Body and mentions the different aspects, in particular the legal and economic aspects, of the subject. In conclusion, the document points out that the ILO should remain responsible for monitoring in respect of labour standards, although a request was made for strengthening the commitments entered into by developing countries on this point. Reservations were also expressed concerning the emergence of wider discussions on this subject within the WTO, given the lack of consensus between member States and the difficulties involved in taking any measures on the subject within the framework of the WTO. The Executive Secretary of ESCAP pointed out in conclusion that despite the commitment of all States participating in this meeting in respect of workers' rights and basic labour standards, participants believed that the establishment of a link between trade and the social clause is the least appropriate means to ensure the respect of workers' rights and improve labour standards. Moreover, they believe that the establishment of such linkage could encourage possible protectionist intentions. He therefore believed that this matter should be given in-depth attention and believed that the ILO was the proper forum for such an exercise.

Economic Commission for Latin America and the Caribbean

23. The International Trade Unit in the Division of International Trade, Transport and Finance of the United Nations Economic Commission for Latin America and the Caribbean (CEPAL) informed the Office that it proposed to devote a whole section of its new publication on the international integration of Latin America and the Caribbean (Panorama de la Inserción Internacional de América Latina y el Caribe) to the social dimension of regional integration. The purpose of this section is to provide information on the distributional effects of preferential liberalization in Latin America and the Caribbean.

24. During 1996 the Social Development Division of ECLAC launched a survey in Latin American countries to evaluate recent changes in globalization and trade liberalization. An initial assessment of the results of this survey will be published in the ECLAC document dealing with the social situation in the region (forthcoming).

United Nations Environment Programme (UNEP)

25. The Environment and Trade Unit of the United Nations Environment Programme (UNEP) reported that it was concentrating its activity on links between the environment and trade and in particular on the impact of the liberalization of trade on the environment. The Unit also pointed out that it had not carried out any studies on the social impact of the liberalization of international trade.

Food and Agricultural Organization of the United Nations (FAO)

26. The Commodities and Trade Division of the Food and Agricultural Organization of the United Nations (FAO) reported that this organization had undertaken an assessment of the impact of the Uruguay Round agreements on agricultural commodities and in 1995 had published a report entitled Impact of the Uruguay Round on agriculture. On the basis of this report, an assessment was made of the food security implications for developing countries and the conclusions of this assessment were discussed by the Committee on World Food Security in 1995. Subsequently, an important document on food and international trade was prepared for the World Food Summit which will be held between 13 and 17 November 1996 at the FAO headquarters in Rome (Italy), which will involve discussions at the highest level on the world food and agriculture situation and outlook for the future.

27. FAO has also organized a series of regional workshops in Latin America, Asia, the Near East and Africa, where the implications of the Uruguay Round for these regions, including small farmers and consumers, were discussed. A project for small farmers in Senegal is under preparation which also includes a training component on how small farmers can take full advantage of market opportunities as a result of the Uruguay Round.

28. The Agriculture and Economic Development Analysis Division also reported that a special chapter of the 1996 edition (forthcoming) of its publication State of Food and Agriculture (SOFAC) will deal with the macroeconomic dimensions of food security.

World Intellectual Property Organization (WIPO)

29. The Office of the Legal Counsel of the World Intellectual Property Organization (WIPO) reported that information concerning WIPO activities which may have a link with the social dimension of the liberalization of international trade, contained in the previous document on the subject presented to the 265th Session of the Governing Body, was still valid.

B. Other intergovernmental organizations

Group of the seven major industrialized countries (G7)

G7 Conference on Employment

30. The G7 Conference on Employment was held on 1 and 2 April 1996 in Lille (France). It was attended by Labour, Economic, Commerce and Finance Ministers from the G7 countries (Canada, France, Germany, Italy, Japan, the United Kingdom and the United States) as well as by the Secretary-General of the OECD and the Director-General of the ILO. The ILO presented two papers to the Conference, one entitled The social dimension of the liberalization of international trade. The conclusions of the Chair noted "the importance of enhancing core labour standards around the world, and examining the links between these standards and international trade in appropriate fora". Further details on this subject can be found in the document on the follow-up on the G7 Conference on Employment which the Office prepared for the 266th Session of the Governing Body.⁽¹⁵⁾

G7 Summit

31. The Heads of State and Government of the seven major industrialized countries (G7) met between 27 and 29 June in Lyon (France). An economic communiqué approved by the Heads of State and Government of the G7 invites the WTO Ministerial Conference to broaden its agenda to include subjects of particular importance to the liberalization of trade and investment.⁽¹⁶⁾ The Heads of State and Government of the G7 recognized in particular that there is a desire to examine the question of links between trade and internationally recognized basic labour standards. Employment problems are also mentioned and the Heads of State and Government of the G7 thanked the OECD and the ILO for the quality of their contribution to the Lille Conference. Finally, they called for the establishment of a new partnership for development which should in particular allow the developing countries, irrespective of their level of development, to benefit from the fruits of globalization. To this end, the fundamental objective should be that of sustainable development. The goals to be achieved include the reduction of poverty and social inequalities, the respect of internationally recognized labour standards, the protection of children, the strengthening of civil society, the protection of the environment and the improvement of health and education.⁽¹⁷⁾

International Bank for Reconstruction and Development (World Bank)

32. The International Bank for Reconstruction and Development (World Bank) continues to be interested in the questions studied by the Working Party. Mention may be made, inter alia, of the recent documents on the links between export growth, technology and labour markets in developed countries; the correlation between the expansion of economies of Eastern Asia and the structure of markets in the industrialized countries; and the effects, on the markets of the industrialized countries, of trade with Asia.

33. Along with its 1995 World Development Report devoted to employment, the World Bank published a document entitled The employment crisis in industrialized countries: Is integration to blame? This study shows that the integration of goods and capital markets has to a greater extent than ever before linked the labour markets of the developed countries with those of the developing and transition economies. This growing interdependence has brought about reactions of fear in some industrialized countries. However, the World Bank study concludes that this interdependence explains only partially the criticisms of unskilled workers in industry who are faced with the threat of unemployment or a drop in wages. Furthermore, for the developed countries, the gains resulting from greater international economic integration should be higher than the costs. However, the strengthening of this integration process should be accompanied by reforms and structural measures to ensure that workers of the industrialized countries also benefit from this integration. Thus, according to the World Bank, the introduction of policies to cushion the cost of adjustment for the most vulnerable sectors -- young workers and unskilled workers -- is essential in dealing with the redistributional impact of globalization and containing protectionist pressure.

International Monetary Fund (IMF)

34. In his address at the colloquium "Les enjeux du G7" which was held on 24 June 1996 at Lyon (France), the Managing Director of the International Monetary Fund (IMF) said: "At a time when globalization is advancing so rapidly, how can we find suitable structures in which everyone is equitably represented, thereby lending them legitimacy, which would make it possible to improve the formulation of global strategies at the world economy level?". He added that the proper definition of the global macroeconomic strategy "requires, however, that leaders broaden their vision beyond the macroeconomic, monetary, and financial areas in order to incorporate social, trade-related, and other dimensions. This is being sought through increasingly close cooperation with the other institutions that have responsibilities in these areas, such as the ILO, the WTO, etc."⁽¹⁸⁾

35. As regards IMF activities which may have a link with the social dimension of the liberalization of international trade, the secretariat of this organization has informed the Office that the information included in the previous document on the subject placed before the 265th Session of the Governing Body is still valid. Moreover, the problems concerning the labour market are analysed in detail in the 1996 edition of the IMF's World economic outlook, which will be published in the month of October. Finally, between 1995 and 1996 the IMF secretariat produced working documents on the following subjects: Fiscal implication of world trade liberalization (WP/95/50); Trade policies and Lithuania's reintegration into the global economy (WP/95/138); The Uruguay Round and the net food importers (WP/95/143); Effects of the Uruguay Round on Egypt and Morocco (WP/96/7); Implications of the Uruguay Round for Kenya (WP/96/8); Transfers, social safety nets, and economic growth (WP/96/40); Recent trade policies and an approach to further reform in the Baltics, Russia and other countries of the former Soviet Union (WP/96/71); The role of labor market rigidities during the transition: Lessons from Poland (WP/96/77); Unemployment in Greece: A survey of the issues (WP/96/91); Policy complementarities: The case for fundamental labor market reform (WP/96/93); Pension reform: Financial market development and economic growth: Preliminary evidence from Chile (WP/96/94); The social safety net in Albania (WP/96/96); Income distribution and macroeconomic performance in the United States (WP/96/97); Social protection in transition countries: Emerging issues (PPAA/96/5).

36. The technical assistance provided by the IMF is focused on fiscal, central bank, and the statistical areas and not on the social aspects of trade liberalization per se. It should be noted, however, that the IMF provides technical assistance in the area of social safety nets within the reform programmes generally including the liberalization of trade.

Organization for Economic Cooperation and Development (OECD)

37. The study of the Organization for Economic Cooperation and Development (OECD) on trade, employment and labour standards, published in 1996, is the subject of a separate analysis in another document presented to the Working Party.⁽¹⁹⁾ The OECD Ministers welcomed the conclusions of the study as an important contribution to a better understanding of the subject. They also encouraged OECD member States to discuss the conclusions of the OECD study with a wider audience. To this end, a workshop on trade, employment and labour standards took place on 3 and 4 October 1996 in Paris (France). It was attended by representatives from 12 dynamic non-OECD member economies in Asia and Latin America and by officials from the ILO, WTO, UNCTAD, business and labour.

World Trade Organization (WTO)

38. The Trade and Environment Division of the WTO reported that the relationship between international trade and its social dimensions, including internationally recognized labour standards, has not yet been raised formally at the WTO by any of its members since the Marrakesh ministerial meeting which concluded the Uruguay Round negotiations in 1994. However, in the context of informal consultations among heads of delegations of the WTO member States with a view to preparing for the Singapore Ministerial Conference in December, proposals have been made by two member States for the issue of basic labour standards and international trade to be discussed in the WTO. There is at present no consensus on the matters covered in those proposals.

39. The WTO secretariat continues to observe, with interest, the proceedings of the ILO Working Party and to value highly the close cooperation between the WTO and the ILO.

40. The Director-General of the WTO gave an address during the informal meeting of Ministers of Trade of the European Union which was held on 18 and 19 September 1996 in Dublin (Ireland). Labour standards were one of the five themes mentioned in his address. He said that he could see the emergence of four areas of common ground: the respect of basic labour standards; recognition of the primary role of the ILO in questions concerning labour and employment; the refusal to call into question the competitive advantage of low-wage countries; and the assurance that the possibility of trade sanctions would not be envisaged. However, the Director-General of the WTO said that it would not be easy to reach an agreement on a statement based on these four points, and that a large number of delegates opposed the discussion of the subject within the WTO. He emphasized that any possible action in this direction should be only motivated by a desire to improve basic labour standards and the situation of children and other vulnerable sectors of the working population. Referring to the International Programme for the Elimination of Child Labour (IPEC), he said that full use must be made of the potential of such programmes and encouraged other international bodies such as the World Bank and UNICEF as well as donor countries to work towards this goal. Finally, he said that the challenge that the proponents of a WTO approach face was to convince their partners at all costs that this was a joint effort, the only purpose of which was to protect children and vulnerable people.

41. In February 1995, the ILO obtained the status of observer at the WTO negotiating Group on Movement of Natural Persons. This Group had been set up to discuss a greater liberalization of the movement of persons in regard to the provision of international services. The objective was to follow up the decision adopted at Marrakesh in April 1994 during the adoption of the Uruguay Round agreements. The interest of the ILO in the work of this Group resulted from a research proposal included in the Programme and Budget for the 1996-97 biennium on "the liberalization of trade in services and the protection of migrant workers". The meetings of the Group concluded in July 1995 and resulted in particular in two conclusions of interest to the ILO: (a) in the general context of international migrations for employment, the providers of international services constitute a separate category which is undergoing full expansion; (b) schedules of specific commitments by the different countries which are signatories to the GATT agreement on trade in services are still very restrictive concerning access to their markets and they are drafted in ambiguous terms. Since then, no new negotiations have been held on this question within the WTO. This is a sphere in which there is still a wide gap between the positions of the developing countries and those of the industrialized countries.

International Organization for Migration (IOM)

42. In March 1996, the International Organization for Migration (IOM), in collaboration with UNCTAD, published a study on foreign direct investment, trade, aid and migration,⁽²⁰⁾ Chapter V of which deals with trade and migration. The study concludes that, while the liberalization of capital movements and trade flows has proceeded at an unprecedented pace in recent years, progress towards liberalizing movements of labour has remained limited. This imbalance has encouraged disorderly migration, especially driven by poverty. According to the study, measures should be taken to prevent these disorderly migrations, to address their root causes and encourage economic growth and more broad-based development. Trade has also had a significant effect on migration movements. Thus, in labour-abundant countries which increase their exports by making use of their comparative advantage of low-cost labour, trade tends to reduce migration through the creation of additional employment and accelerated economic growth.

C. Regional and subregional organizations

North American Agreement on Labor Cooperation

Commission for Labor Cooperation

43. The Commission for Labor Cooperation was set up within the framework of the North American Agreement on Labor Cooperation (NAALC) following the North American Free Trade Agreement (NAFTA) concluded by Canada, Mexico and the United States. The Commission reported that the following studies were recently carried out or are in preparation: Preliminary Labor Markets Report (already published); Comparative Labor Markets Profile (publication scheduled for November 1996); Preliminary Labor Law Report (available in October or November 1996); Comparative Labor Law Report (publication scheduled for December 1996); Special report: Effects of sudden plant closings on freedom of association and the right to organize (publication scheduled for November 1996); and Standard and advanced practices in the garment sector (project to be submitted to governments at the beginning of 1997).

44. As regards technical activities, the Commission will shortly organize trilateral workshops and conferences on the following subjects: income security programmes; migrant workers; industrial relations; safety and health in the petrochemical and construction sectors; non-standard work and changing work patterns; workers and family responsibilities; health and labour safety inspector training procedures; child labour; international labour law; safety and health in the bottling industry.

45. The secretariat of the Commission is also sponsoring the first forum on incomes and productivity in the NAFTA countries which will be held in Dallas (United States) between 28 February-1 March 1997. In a special edition of its Bulletin⁽²¹⁾ the secretariat of the Commission refers to the preparation of a comparative study of the North American labour markets. A preliminary report was issued by the Ministries of Labour of the three member countries of NAFTA in May 1996, during their annual meeting to review the implementation of NAFTA. This report covers macroeconomic and trade aspects of the continental economy, labour force demographics, changing employment structures, non-standard work patterns, dimensions of unemployment and underemployment, and earnings. A full report will be available in late 1996. The objective of the report is to move beyond aggregate economic statistics and try to develop a deeper understanding of the North American labour markets.

46. The National Administrative Offices (NAOs) responsible for assisting the Ministries of Labour of each country are also responsible for examining complaints made within the NAFTA framework. The examination of these complaints begins with an exchange of information between the NAOs. To date, they have received six communications, namely five for the United States and one for Mexico. A final report was prepared by the United States NAO, following the introduction of a Plan of Action. This Plan of Action provided for the organization of three seminars (one per country) on the registration of new trade unions and certification procedures, the carrying out by the Mexican authorities of an internal study on the registration of trade unions, and a series of meetings between the Mexican authorities and the parties concerned. During 1996, the three NAOs organized several seminars, workshops and technical assistance activities in the following spheres: occupational safety and health, information activities, labour inspection training, employment and vocational training, labour law and workers' rights.⁽²²⁾ Several other meetings have been programmed and the three NAOs, with the support of the secretariat of the Commission, plan to organize at the beginning of 1997 a public conference on work by children and adolescents.

Association of South-East Asian Nations (ASEAN)

47. The annual economic meeting of the South-East Asian nations concluded on 15 September 1996. During this meeting, the ASEAN member countries reiterated their opposition to the introduction of such subjects as labour, environment and corruption into the agenda of the first Ministerial Conference of the WTO. According to ASEAN, this meeting should examine only the implementation of the Uruguay Round agreements and not any new subjects such as those noted above. The Ministers of Labour of the ASEAN member countries met on 25 and 26 April 1996 in Bangkok (Thailand). The joint communiqué adopted by this meeting describes in detail the ASEAN position on a possible link between a social clause and international labour standards as well as the ILO priorities. In this communiqué, the Ministers of Labour of the ASEAN countries reaffirm their opposition to any possible linkage between international labour standards and international trade. They also emphasize that a number of ILO Conventions no longer reflect the social and economic situation of member States and that ILO instruments should help member States to improve their social and economic situation and not penalize them in the event of non-compliance. The Ministers of Labour invited the ILO to review the international labour standards and, in particular, the so-called core standards (Conventions Nos. 29, 87, 98, 100, 105, 111 and 138). They also requested the ILO to adopt a more flexible attitude concerning the application of ratified Conventions, with account being taken of the development level of each member State. There was a need for strengthening technical assistance and increasing the resources allocated, in particular to promote employment and eliminate poverty and child labour.

48. The ASEAN secretariat reported that this organization has taken a number of initiatives in the sphere of social development. The ASEAN Plan of Action on Social Development⁽²³⁾ was prepared following the 18th meeting of the Committee on Social Development (COSD) in September 1993 and adopted in January 1995 at the 19th meeting of COSD. This Plan of Action covers the period 1994-98 and identifies five strategies: supporting regional social development projects; enhancing human resources development; promoting awareness of ASEAN and reinforcing ASEAN solidarity; coordinating and managing networking in social development; strengthening programmes, in particular on behalf of women, youth, children and the family.

49. Within the framework of the UNDP regional subprogramme on human development, two activities for assessing the effects of rapid economic development on the region and the impact of the ASEAN Free Trade Area on labour and employment, are currently being implemented by the ASEAN secretariat. The first activity concerns the socio-economic changes and their effects on people and should, in particular through the preparation of social and economic indicators, lead to an improvement in economic planning in the different ASEAN countries and the establishment of regional programmes in the sphere of social development. The second activity will examine the situation of employment in the ASEAN member countries within the framework of the implementation of the Free Trade Area.

South-Asian Association of Regional Cooperation (SAARC)

50. In April 1993, the member countries of the Asia-Pacific Economic Corporation (APEC) signed a preferential trading agreement to step up the process of economic and trade cooperation within the Association. In February 1994, SAARC signed a framework agreement with the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP). Cooperation between these two bodies is being developed in particular as regards the reduction of poverty, the development of human resources and the promotion of trade in the region. SAARC also signed in June 1995 a protocol agreement with the UNDP. The major areas of cooperation (joint studies and activities) concern the promotion of sustainable human development, the elimination of poverty and the creation of jobs. Each year, the SAARC selects a topic on which it will focus its activities. The year 1995 was devoted to the elimination of poverty. In 1991, the sixth SAARC Summit (Colombo, Sri Lanka, 1991) decided to set up the Independent South Asian Commission on Poverty Alleviation (ISACPA). The ISACPA presented a programme of action at the seventh SAARC Summit which was held in 1993 in Dhaka (Bangladesh). The main action guidelines were the following: social mobilization strategy; assistance for labour-intensive small-scale industry; human development promotion. The SAARC Summit also decided that the right to work and to education were the two priorities of the Association. At the eighth Summit in 1995 in New Delhi (India), SAARC decided to establish machinery for the exchange of information on the elimination of poverty. It was pointed out that poverty should be eliminated in particular through strong economic growth and that such growth should result first of all in the creation of jobs.

Asian Development Bank

51. In the report of the Asian Development Bank, entitled Asian development outlook 1995-1996, the President of the Bank refers to the favourable effect on economic growth of the increasing liberalization of international trade and investment flows as well as the creation of the WTO. He also points out that, despite strong economic growth, the Asian continent must not lose sight of the problems to be resolved concerning development. In many countries of the region, human development indicators are unsatisfactory for large segments of the population and poverty is a stark reality for millions of people. The problems of education and health must be dealt with if there is to be continuing improvement in living standards within the Asian and Pacific region.

Caribbean Community (CARICOM)

52. CARICOM, with the financial support of the IDB is carrying out a programme to promote greater participation by CARICOM in the world economic system. This programme includes in particular the establishment of a plan to encourage the mobility of skilled workers.

Southern Africa Development Community (SADC)

53. The Heads of State of the member countries the Southern Africa Development Community (SADC) met on 24 August 1996 in Maseru (Lesotho) during the annual SADC summit. The items on the agenda included the signature of a Protocol on trade in the subregion, the main objective of which⁽²⁴⁾ is to harmonize trade policy and liberalize trade in goods and services with a view to the creation of a free trade area in the subregion. In the text of the Protocol agreement, no mention is made of the social dimension of the liberalization of trade or even labour standards and employment in the subregion. The text of the agreement on the harmonization of customs practices mentions training in this sphere, and member States are invited to develop joint training programmes and to exchange staff.

Asia-Pacific Economic Cooperation (APEC)

54. The Asia-Pacific Economic Cooperation (APEC) has set up several committees and working parties. One of the ten working parties deals with human resources development. It is made up of experts from the member countries of APEC and in particular develops programmes which focus on the labour market (training, mobility, employment strategies). Its activities are carried out in accordance with the APEC Ministerial Declaration on Human Resource Development adopted in November 1994.

55. The Business Advisory Council (ABAC) of APEC met in August 1996 to make recommendations to be presented to the APEC Ministerial Meeting scheduled for the end of November 1996 in Manila (Philippines). This body groups together the heads of large enterprises from the Asia-Pacific region. During this Meeting it was stated that while economic liberalization should help build the community of Asia-Pacific economies envisaged by the Heads of State of the APEC countries, it must also be admitted that there was growing economic interdependence between economic issues and social and cultural issues and that lasting economic cooperation in the region could be achieved only if account were taken of these questions.

Central American Common Market (CACM)

56. The five countries forming the Central American Common Market (Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua), along with Panama, have shown their determination to achieve Central American integration by signing the Tegucigalpa Protocol leading to the establishment of the Central American Integration System (SICA) on 13 December 1991. SICA is the legal and institutional framework of the subregional integration process. The Heads of State of these six Central American countries also signed in March 1995 a treaty on social integration in Central America, known as the San Salvador Treaty. This Treaty refers to the creation of a subsystem within SICA, made up of three bodies: the Social Integration Council, a Council of Ministers responsible for social development and a Social Integration Secretariat. The main objectives of this initiative include in particular harmonizing social policies; promoting the universal right of everyone to employment, and the right of access to health, education services and housing; identifying and resolving social problems at the subregional level; strengthening cooperation in the social spheres; and increasing the financial resources allocated to the social sectors for the elimination of poverty in Central America.

57. The "northern triangle", made up of Guatemala, El Salvador and Honduras, adopted agreements to facilitate the movement of capital and workers between the three countries.

Southern Common Market (MERCOSUR)

58. The Treaty of Asunción, signed on 26 March 1991 and establishing the Southern Common Market (MERCOSUR) refers to the desire to step up the economic development process in the countries of the subregion by the incorporation of social justice, and the desire to improve the living conditions of the population. Three MERCOSUR bodies are more particularly concerned with the social aspects of the integration: (a) subgroup 10 is responsible for matters concerning labour, employment and social security. The first meeting of this subgroup 10 took place in October 1995; (b) the Social and Economic Forum includes in particular representatives of civilian society, with the delegation of each country having an equal number of representatives of workers and employers. The first meeting of the Social and Economic Forum took place last month; (c) the consensus mechanism comprising the Ministers of Labour of the member countries of MERCOSUR. They met for the first time in February 1996. They ratified an agreement on social security, expressed the desire that a subregional meeting on labour inspection should be organized shortly, requested the preparation of national reports on a number of subjects, including labour costs, and emphasized the importance of the role played by migration movements.

59. The question of a social charter within MERCOSUR and of the possible inclusion of this item on the agenda of subgroup 10 is still being intensely discussed between the different member countries.

60. CEPAL informed the Office that it had proposed to the European Commission a project concerning the convergence of social policies within the MERCOSUR. The objective of this project is to examine the situation of labour legislation, education and social security in the MERCOSUR member countries and, in the light of European experience, to provide technical support within the framework of this process for the harmonization of policies.

Arab Labour Organization

61. The Eighth Symposium on Social Insurance was held in Damascus (Syrian Arab Republic) between 16 and 18 September 1996. One of the items on the agenda concerned economic change and its impact on social insurance schemes. Preparatory work has begun for the organization, in February 1997 in Cairo (Egypt), of a seminar on regional and international changes, the liberalization of trade, globalization and its possible effects on labour in the Arab States. A meeting of experts on social insurance and economic reform policies is also scheduled to take place in 1997.

62. The Arab Labour Organization also replied that it has published several studies of possible interest to the Working Party, including one on the Uruguay Round agreements and their present and future effect on Arab economies in general and employment in particular, and another on the theoretical bases of international trade and economic integration.

Organization of African Unity (OAU)

63. In a document of the OAU on the implementation of the new agenda of the United Nations for the development of Africa in the 1990s, reference is made to the promotion of regional and subregional cooperation and integration. In June 1991, the member countries of the OAU signed the treaty establishing the African Economic Community, known as the Abuja Treaty. This treaty, which came into force in May 1994, stipulates that the Community shall be established mainly through the coordination, harmonization and progressive integration of the activities of the regional economic communities. The OAU states that it gives special attention to the strengthening of regional cooperation, in particular with the African Economic Community and the African Development Bank. The document also points out that certain African regional economic communities have been reorganized and reoriented their priorities and actions to bring them into line with the requirements of the African Economic Community. In 1994, the Preferential Trade Area of Eastern and Southern Africa became the Common Market of Eastern and Southern Africa (COMESA). In the same year, the Southern African Coordination Conference (SADCC) became the Southern African Development Community (SADC). The Economic Community of West African States (ECOWAS) recently amended its constitution in line with the African Economic Community. Finally, the Economic Community of Central African States (ECCAS) has embarked on a process of reform. No specific reference is made in this document concerning a possible joint position on the subject of the social dimension of the liberalization of trade. It may however be noted that emphasis is placed on the strengthening of infrastructure and communication systems.

Organization of American States (OAS)

64. A working group on economic integration and its effects on employment and migration movements met in November 1995 in Washington (United States) at the end of the Tenth Inter-American Conference of Ministers of Labour (October 1995, Buenos Aires, Argentina) and presented a preliminary report during the meeting of the Ministers of Trade of OAS member States, held in Cartagena (Colombia) in March 1996.⁽²⁵⁾ This report recalls that a Plan of Action had been established at the Summit of the Americas, which took place in Miami (United States) in December 1994, attended by 34 Heads of State. In particular, this Plan of Action states that workers' rights, as defined in the appropriate international Conventions, will be respected and promoted. In the Declaration of Principle of the Miami Summit of December 1994, mention is also made of the decision taken at this summit to establish before the year 2005 a Free Trade Area of the Americas. The Ministers of Labour agreed to recognize that free trade will contribute to the promotion of development and improve the quality of life of the population in the hemisphere. The expansion of free trade and economic integration in the western hemisphere should however be compatible with other principles such as the respect of the fundamental labour standards of the ILO. According to the report, the respect of these labour standards creates a better trained, more motivated and more productive workforce. In the same way, to attempt to attract investments on the basis of low labour standards and underdeveloped human resources is socially regressive in the short term and economically unsustainable in the medium term. The Ministers of Labour believed that the member countries of the OAS can compete with the countries producing goods and services with unskilled workers by developing their human resources and training their labour force. They said that they were ready to cooperate with the Ministers of Trade to ensure the success of the Free Trade Area of the Americas and a widespread distribution of its benefits. They also called for a strengthening of their relations with the Ministers of Education to improve the level of basic education as well as the training and retraining of workers. They believed that the labour inspection services should be strengthened in each country in the region.

65. The Ministers of Labour made a number of suggestions to the Ministers of Trade of the OAS concerning the Free Trade Area of the Americas. They included: recognizing the vital contribution of workers to any increase in productivity, by ensuring that the benefits of economic integration are widely distributed; incorporating a social dimension that guarantees, as a minimum, the respect of basic labour standards; establishing a dialogue between the government, workers and employers to seek a consensus and the views of the private sector regarding economic integration issues; promoting closer cooperation between ministries in the economic area and those responsible for social policy; ensuring that economic integration and free trade fulfil their promise, i.e. encourage the growth of economies, improve standards of living of the population and working conditions and expand markets by boosting workers' purchasing power.

Andean Pact

66. The Trujillo Act and the Protocol amending the Cartagena Agreement to establish the Andean Community were signed on 10 March 1996 and transmitted to the General Assembly of the United Nations on 25 March 1996.⁽²⁶⁾ The Andean Community includes Bolivia, Colombia, Ecuador, Peru, Venezuela and Panama (as an observer) and was set up by these countries to promote closer ties of cooperation by strengthening their democracies, eradicating poverty, promoting sustainable development and environmental conservation, opening up their markets and coordinating their positions in various international negotiating fora. The Trujillo Act refers to the Free Trade Area of the Americas and states that the progressive liberalization of trade in goods and services will help achieve growth levels commensurate with the development expectations of all the peoples in the hemisphere. It also affirms the importance of strengthening links with other countries or groups of countries, such as those of the Asia-Pacific bloc, in order to increase trade.

67. The Presidents of the six countries "highlight the importance of the first meeting of the WTO Ministerial Conference", and the importance of convening "a regional preparatory meeting to prepare a Latin American position on the agenda of that meeting".

68. The five countries of the Andean Pact (Bolivia, Colombia, Ecuador, Peru and Venezuela) had previously adopted the Declaration of Caracas (May 1991) setting up the Andean Common Market and from October 1992 establishing a free trade area.

69. The Inter-American Development Bank (IDB) is implementing in the Andean countries a strategy for the promotion of economic integration. This concerns in particular the liberalization of trade in the subregion.

Latin American Economic System (SELA)

70. The Latin American Economic System (SELA) is a body for the establishment of joint positions by its 27 member States and the encouragement of joint economic and social promotion and cooperation in the region of Latin America and the Caribbean. During the XXIst Meeting of the Latin American Council, which was held in July 1995 in San Salvador (El Salvador), the member States instructed the SELA secretariat to study the social aspects of economic and trade integration in the region, in particular as regards employment. The SELA Secretariat will therefore examine the role of training in an increasingly competitive economic system; the likely consequences of the current technological revolution on employment in the region; the effects on employment and the competitiveness of enterprises of the institutional transformations linked in particular with the integration process under way in the region.⁽²⁷⁾

71. Between 16-18 January 1996 in Caracas (Venezuela), SELA hosted the Ministerial Meeting of the Countries of Latin America and the Caribbean in preparation for UNCTAD IX. The ministers adopted the Declaration of Caracas, which established a joint position by the countries in the region on the subject of UNCTAD IX. In his address to the 12th executive session of the Trade and Development Board of UNCTAD, which was held in Geneva in February 1996, the representative of the Group of Countries of Latin America and the Caribbean (GRULAC) referred to the Declaration of Caracas and recalled that it was important to note that an effective use of human and financial resources implied not only economic but other kinds of measures.

European Union

72. The ministers responsible for trade policy in the Member States of the European Union and the Vice-President of the Commission met informally on 18 and 19 September 1996 in Dublin (Ireland) to discuss the preparation of the first WTO Ministerial Conference. In its conclusions,⁽²⁸⁾ the Presidency referred to the link between trade and labour standards and the continuation of the discussion on this subject within the Community framework (point 6 of the conclusions). It believed that the WTO work programme should be broadened to take account of the new realities of the world economic system. In an unofficial document, the Presidency mentions the broadening of the mandate of the WTO and considers that the Ministerial Conference of Singapore should encompass several other subjects. Mention is made in particular of the role played by the liberalization of international trade in increasing living standards worldwide and the importance that WTO members attach to the efforts of the ILO to promote the respect of core labour standards. According to the Presidency, the Conference should make clear that it rejects all attempts to undermine the competitive advantage enjoyed by developing countries in the matter of wage rates, and should also underline the importance of positive measures to assist developing countries to develop their institutional capacity to ensure compliance with core labour standards and to increase the educational opportunities available to children.

73. No decision has for the time being been taken by the Council on General Affairs of the European Union as regards a joint position of the European Union concerning the agenda of the First WTO Ministerial Conference. The Council is due to meet again at the end of October 1996, to decide in particular whether the European Union will adopt an approach in line with the recommendations made by the Commission in its communication on the links between the trade system and internationally recognized labour standards.

European Commission

74. Directorate-General V (Employment, Industrial Relations and Social Affairs) of the European Commission informed the Office of the adoption by the Commission on 24 July 1996 of a communication entitled The trading system and internationally recognized labour standards.⁽²⁹⁾ In this communication, it is proposed that the Council should agree to "putting forward, at the Singapore Ministerial Conference, the creation of a working party to examine the link between the multilateral trading system and core labour standards, and to explore the area in which the WTO might act in conjunction with other international bodies to help promote such standards". The European Commission develops its arguments based on human rights and the need to promote labour standards which are recognized as fundamental by the international community, which have a universal character and encompass aspects related to human rights. As regards basic rights, the European Commission recalls the various debates which have been held both within the European Union and in the ILO, the OECD, and during the World Summit for Social Development in Copenhagen and which have confirmed the universal nature of fundamental labour standards. The communication reviews the different means for promoting basic labour standards and emphasizes in particular the need to strengthen the ILO's role and to support the initiatives undertaken by the Organization as regards child labour. While recognizing the expertise which the ILO has in this sphere, the European Commission believes that the WTO has a real role to play, with account being taken of the convergence between the WTO objectives as regards economic development, the liberalization of trade and the promotion of labour standards; the need for a multilateral framework to avoid unilateral autonomous measures or private initiatives which might jeopardize the process of the liberalization of trade; and the respect of the comparative advantages of the developing countries and their right to define their national policy. Thus, according to the European Commission, the path to be followed is one of strengthening an open and non-discriminatory multilateral system and the development of trade, rather than one of trade restrictions.

75. Since the survey on forced labour in Myanmar,⁽³⁰⁾ mentioned in the previous document prepared by the Office, is currently under way, the Commission has not yet ruled on a possible temporary withdrawal of benefits from the European Union's Generalized Scheme of Preferences.

Geneva, 22 October 1996.

¹GB.265/WP/SLD/1/3.

²A/51/228.

³ E/CN.17/1996/IDC/3.

⁴Human Development Report 1996, published for the UNDP by Editions Economica (Paris, 1996), pp. 103-104.

⁵E/ICEF/1996/AB/L.10, para. 11.

⁶ Report of the Director-General of UNICEF, doc. E/ICEF/1996/10, para. 60.

⁷ E/ICEF/1996/20.

⁸ E/ICEF/1996/14, para. 52.

⁹ TD/378, p. 15.

¹⁰ ibid., p. 19.

¹¹ Strengthening the participation of developing countries in world trade and the multilateral trading system, doc. TD/378.