Executive Summary

1) Three years after the establishment of the terms of discussion of the appended report, the topic is still open to discussion, notwithstanding important events that have occurred in the overall context (for example, the granting of fast-track authority to President George W. Bush).

2) Labor law inevitably entails costs for the employer, and these costs have repercussions for international trade.

Under certain conditions, the ability to compete internationally of countries in which workers have a higher level of protection may be harmed by countries in which workers have a lower level of protection.
 

3) The problem is not new, and it has been addressed through a number of initiatives.
Some of these initiatives, which may be traced back to the eighteenth century, were taken by individuals, with campaigns led by entrepreneurs such as Robert Owen, in Scotland and Daniel Legrand in France, to standardize international worker protection so that such protection would cease to distort international competition.
 

4) Other initiatives were taken by the organized international community, which in 1919 created the International Labor Organization (ILO), one of whose founding principles was that nations that provided inadequate treatment to their workers hampered, for the reasons noted above, improvements to the treatment of workers in other countries.
 

The topic has also been raised at the World Trade Organization (WTO). At the 1997 Singapore Ministerial Conference of the WTO, trade ministers resisted a bid by some developed countries to include a social clause in trade agreements that would establish a link between the trade system and respect for international labor standards.
 

5) Efforts to link international trade with respect for labor standards have also been made within regional organizations, such as the European Union (e.g., through the additional concession of generalized preferences to countries that commit to abide by certain labor standards) and the North American Free Trade Agreement (with its complementary Agreement on Labor Cooperation).
 

6) Lastly, the linkage has also been expressed in bilateral agreements, such as the trade agreement between the United States and the Kingdom of Jordan, and the proposed agreement between the United States and Chile.
 

7) At the global level, unions tend to attempt to associate trade with the respect for basic labor standards, through regulations and sanctions. Global business, on the other hand, tends to resist that linkage, instead reserving labor issues for specialized bodies, such as the ILO.
 

8) The tendency of developing-country governments is to generally oppose this type of linkage, since they understand that the latter can pursue in reality or constitute in fact an imposition of non-tariff barriers to international trade.
 

9) In other words, a number of governments consider that in addition to (or in lieu of) a genuine concern for labor rights, there may in fact be an underlying "protectionist orientation," promoted by corporate interests that influence the governments of developed countries (symptomatic of this is the fact that some employer organizations in developed countries, along with unions, support their governments when the latter demand the insertion of a social clause in instruments that regulate international trade).
 

10) The tendency to link labor law with international trade is also reinforced by the globally organized resistance to market liberalization, aresistance that is due not only to the pressure of corporate interests, but also to the end of the Cold War and to the fact that the "struggle against globalization" provides a suitable opportunity for channeling opposition and even the frustrations of many non-governmental organizations that have ample financial and media support.