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GB.276/14/1 (and Corr.)
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FOURTEENTH ITEM ON THE AGENDA
Working Party on the Social Dimensions
of the Liberalization of International Trade
Future of the Working Party
1. At its 275th Session (June 1999), the Governing Body decided to reconvene the Working Party on the Social Dimensions of the Liberalization of International Trade in November 1999, on the understanding that it would then decide on its future. This paper is intended to provide the Governing Body, through the Working Party, which will naturally wish to express an opinion on the matter, with the necessary background on this question so that it can take a decision. It recalls the Working Party's mandate and the work it has done so far, which may be particularly useful to members who have not previously been involved in its work.
I. Background
2. The Working Party on the Social Dimensions of the Liberalization of International Trade was established by the Governing Body at its 260th Session (June 1994)(1) following the discussion at the International Labour Conference that year on the Report of the Director-General entitled: Defending values, promoting change. Chapter 3 of that Report raised in particular the issue of the future of standard setting in the context of globalization. The mandate assigned to the Working Party by the Governing Body was "to discuss all relevant aspects of the social dimensions of the liberalization of international trade".
3. In view of the interest aroused by the subject, it was thought preferable to opt for the solution of a working party open to all members of the Governing Body, rather than that of a small working group initially proposed by the Director-General. The Working Party has in the course of its work developed flexible and original working methods. Since only a short amount of time is available between its meetings and the plenary sittings of the Governing Body at each session, the Chairperson of the Working Party has been entrusted, in consultation with the Vice-Chairpersons, with the task of drafting and presenting direct to the plenary Governing Body a synthesis report on its discussions. This also has the advantage of encouraging a freer and more open discussion than in Governing Body committees, where statements are usually summarized in more detailed written reports.
4. The first meetings of the Working Party were given over to a general discussion of two complementary aspects of its initial mandate, namely, whether to introduce a specific social dimension into the multilateral trade system, and the impact of the liberalization of trade on the attainment of the ILO's social objectives. In the absence of a consensus, the debate on the usefulness and modalities of a possible link between labour standards and the multilateral trade system was shelved fairly quickly. The Working Party was then able to turn its attention to an examination of a fairly wide range of aspects of economic globalization and their impact on the ILO's objectives and means of action.(2) These can be grouped under three main themes:
- Improving the ILO's institutional capacity.
- Improving empirical knowledge.
- The search for a general approach to, and the coordination of, external and internal activities linked to the social dimensions of globalization.
1. Improving the ILO's institutional capacity
5. This question was raised in the very first document presented to the Working Party.(3) Following an initial general discussion, the Working Party felt that there was a need "to consider the ILO's role and means of action within this new global economic context in the wake of the World Social Summit, ...".(4) Thus, in March 1996, when the question of strengthening the ILO's supervisory machinery was simultaneously under examination in the Governing Body's Committee on Legal Issues and International Labour Standards, an examination was foreseen of the means of achieving "universal recognition of the above-mentioned fundamental principles as being obligatory for all Members of the ILO".(5) In November 1996, in drawing conclusions from the discussions, the Chairperson requested the Office more specifically to prepare a paper analysing the various options available -- including that of a Declaration, proposed by the Employers' group -- for strengthening the standard-setting system. As is now well known, this resulted in the adoption of the ILO Declaration on Fundamental Principles and Rights at Work of 1998.
6. The debate on the suitability of the institutional means available to the ILO is linked to an issue that also harks back to the discussions opened by the Report of the Director-General to the International Labour Conference of 1994, and resumed in 1997, on the possible contribution of the major non-governmental actors to the process of globalization and the achievement of the objectives of the ILO. After two brief preliminary discussions, in November 1998 the Working Party was presented with a comprehensive study entitled "Overview of global developments and Office activities concerning codes of conduct, social labelling and other private sector initiatives addressing labour issues".(6) In the light of the very detailed discussions on this document, in March 1999 the Working Party examined the question of the extent to which, and in what manner, future ILO activities might accommodate this phenomenon.(7)
2. Improving empirical knowledge of the
social impact of globalization
7. In the very first document submitted to the Working Party the Office stressed that the information available was rather sparse and that "[t]he first issue is whether, without in any way attempting to prejudge the level and content of social protection appropriate to each country, it is conceivable to incorporate in the international trade system minimum guarantees enabling the social partners to enjoy their fair share of the fruits of trade liberalization to which they make an essential contribution."(8) Hence, with a view to the possible inclusion of an item on this question on the agenda of the International Labour Conference, the Working Party first discussed the impact of foreign direct investment on employment and social policy on the basis of work carried out by other organizations.(9) The Office was then asked to conduct a survey, on the basis of a questionnaire addressed to all governments and social partners, to determine the way in which those concerned perceived the impact of the liberalization of trade and the measures taken to cope with it. The final outcome of this survey was discussed in March 1997.(10)
8. Finally, and most importantly, the Office was asked to conduct a series of case studies of the impact of trade liberalization on the objectives of the ILO in a number of countries with different characteristics and in different parts of the world that were willing to be involved. These studies were conducted and discussed individually, and on a tripartite basis, in each of the countries finally selected (Bangladesh, Chile, Republic of Korea, Mauritius, Poland, South Africa and Switzerland). The Working Party has been kept regularly informed of progress with the studies, and the conclusions drawn from them are submitted to it at the present session of the Governing Body.(11)
3. Discussions of the activities of other organizations
and coordination of internal activities concerning the
liberalization of trade and its impact on social objectives
9. The Working Party has regularly had before it a number of general reports concerning the work of other organizations in relation to the impact of trade liberalization and globalization in the social and related fields. The most significant developments have been the subject of specific and more detailed discussions. In November 1996 the Working Party held a lengthy discussion of the OECD report on trade, employment and labour standards, which was finalized in May 1996 and shortly thereafter presented to the ministers of the OECD.(12) At the following session, in March 1997, the Working Party discussed the outcome of the first Ministerial Conference of the World Trade Organization (Singapore, 9-13 December 1996) on the basis of a compilation prepared by the Office of statements by trade ministers concerning the ILO and international labour standards.(13)
10. The Working Party has, moreover, taken an interest in various work items and research activities concerning trade liberalization and globalization conducted within the Office in order to enhance the synergy between them. These discussions provided useful guidance to the departments concerned for the preparation of proposals for the ILO's programme and budget in this field. In particular, it requested the Office to develop its research programmes on the impact of fundamental principles and rights at work in terms of economic efficiency.
II. Options for the future
11. With its discussion of the final report on the country studies, the Working Party will have reached the end of the work it specifically requested of the Office. As in the case of private sector initiatives, some of the follow-up activities on these studies might seem appropriate, for example, in order to help ILO member States -- through the analysis and comparison of their experience -- to find solutions that will enable them to derive the maximum benefit from globalization for social progress. However, this alone would clearly not justify retaining the Working Party.
12. The above review of the Working Party's history shows however that, in addition to the specific projects and studies that it has initiated, it has also fulfilled a number of more general and recurrent functions. In particular, it has made possible a more comprehensive examination -- in the context of economic globalization -- of the various ways in which internal activities spread over different programmes and falling within the mandate of different Governing Body committees complement one another, and has made it possible to gain a general idea of relevant activities in other international organizations. At the same time, its existence has without a doubt helped demonstrate to the outside world the ILO's interest in this subject and to reaffirm its contribution to it: the Working Party's documents are consulted and mentioned outside the ILO very frequently.
13. It now needs to be determined whether the Governing Body, while noting that the Working Party has reached the end of a fruitful programme of work on the basis of the mandate assigned to it, should now envisage maintaining, either in the present or some other form, a mechanism enabling it to continue to monitor internal and external developments concerning globalization that call for tripartite discussion and coordination but which go beyond the competence of individual committees. Two points need to be made to enable the Governing Body to take that decision.
14. The first concerns the purpose of such a mechanism. The development of trade merits continuing attention. In view of its possible impact on the attainment of the ILO's objectives as a result of the wealth that it helps to create and move, it in effect provides part of the "raw material" of social progress, while at the same time helping to change the nature, volume and location of the jobs that form the basis of the concept of "decent work". However, it seems clear in the light of experience that it is difficult, if not arbitrary, to isolate the social dimension of trade liberalization from other aspects of the social dimension of economic globalization. Recent developments within the Office, as in other organizations, tend to confirm that, as a result of economic globalization, the efforts of the international community will be effective and lasting only if they are approached, more than has so far been the case, in the framework of a coherent and integrated vision of economic and social development and the relationship between them. The Report Decent work is the expression of this awareness within the ILO. The same perception seems to be increasingly accepted and shared outside the ILO, as illustrated in particular by the status accorded to the Office and the Director-General in the IMF's Interim Committee and the Development Committee of the World Bank and the IMF.(14)
15. In this context it seems more necessary than ever before to have some kind of institutional interface to enable the ILO to make a tripartite contribution to the efforts of the competent organizations and, if necessary, to reorient its own activities accordingly. For example, it might be foreseen that through such a mechanism the ILO could make a tripartite contribution, at a future session of the Governing Body, to the Comprehensive Development Framework, to the preparation of a new International Development Architecture proposed by the President of the World Bank, and to the Poverty Reduction Strategy Paper of the Director-General of the IMF, or it could examine and discuss UNCTAD X. Similarly, this could also apply to the update foreseen by the OECD of its study on trade, employment and labour standards, since a decision of principle appears to have been taken.
16. The second point concerns the form and modalities for the operation of this mechanism. The modalities must obviously be chosen in terms of the purpose of such discussions, as set out above, which theoretically goes beyond the specific competence of individual committees. The Governing Body itself would at first seem the most appropriate venue. However, it must be borne in mind that the purpose of the discussions would not be to take decisions, but to fuel interdisciplinary thinking in as open a manner as possible, leaving it to the Governing Body itself to draw appropriate conclusions. This means that the necessary time and sufficiently flexible procedures must be available to favour a debate that is free of some of the constraints and inhibitions that sometimes affect committee discussions as a result of the kind of reports that they examine, and that if necessary individuals from outside the ILO can be involved. To take account of these considerations and constraints two solutions can be envisaged: some variant on the formula of a working party, with a new mandate; or a "committee of the whole" of the Governing Body, similar but not identical to the solution foreseen in the amendment submitted separately to the Governing Body at its present session and intended to enable it to decide to hold discussions on issues of this nature under a more flexible procedure, if necessary authorizing the participation of persons from outside the Governing Body. There is admittedly little difference between these two options. That involving a committee of the whole is a procedure to which the Governing Body might resort when wishing to discuss an item on its agenda, whereas a working party would mean establishing a more permanent type of Governing Body organ. In real terms the existence of an organ like the working party might make it possible to state in more concrete terms -- to those outside the ILO -- its continuing interest in a global and integrated approach to the problems of globalization. It would also make it possible to ensure continuity in chairing such work over the course of the Governing Body's term of office.
17. At the same time it must be clear that, whatever the option retained, it does not necessarily have to be used at every session of the Governing Body, but only when issues that lend themselves to such arrangements specifically arise. It also seems obvious that, in the light of the above considerations, if the decision is to choose an arrangement modelled on the working party, then its name would have to be reviewed so as to reflect more accurately the extension of its mandate to cover the other items on the global multilateral agenda that it could be called upon to address in addition to the original terms of reference of the Working Party. This new working party could for instance be called "Plenary Group on Work and the World Economy".
* * *
18. In conclusion, the Governing Body is called upon to decide, in the light of the above considerations and the comments made by the Working Party on the Social Dimensions of the Liberalization of International Trade --
(a) whether it wishes to review and expand the arrangements involving a working party, as set out in paragraphs 14 and 16, by establishing a "Plenary Group on Work and the World Economy", or simply to retain the possibility of examining, at regular intervals, issues concerning labour and the world economy and to make use of a "committee of the whole" as required to discuss them, in the manner set out in paragraph 16 above;
(b) on the items that might be discussed at the 277th Session (March 2000) of the Governing Body under the arrangements retained.
Geneva, 1 November 1999.
Point for decision: Paragraph 18.
1. Minutes of the 260th Session of the Governing Body, June 1994, third sitting.
2. It may be noted that, in view of the expansion of the issues it has covered, the question of a change in its title has been raised on a number of occasions.
3. GB.261/WP/SLD/1, Nov. 1994.
4. GB.262/WP/SDL/1/2, Mar. 1995.
5. GB.265/WP/SDL/1/1, Mar. 1996.
6. GB.273/WP/SDL/1, Nov. 1998.
7. GB.274/WP/SDL/1, Mar. 1999.
8. GB.261/WP/SDL/1, Nov. 1994.
9. GB.267/WP/SDL/3, Nov. 1996.
10. GB.268/WP/SDL/1/2, Mar. 1997.
11. GB.276/WP/SDL/1/2, Nov. 1999.
12. GB.267/WP/SDL/2, Nov. 1996.
13. GB.268/WP/SDL/1/3, Mar. 1997.
14. See GB.276/ESP/5.