Courtesy Reuters

From North-South to South-South: The True Face of Global Competition

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As protesters battled the police in the streets of Seattle in 1999, calling on the World Trade Organization to include environmental and labor issues in its trade negotiations, government representatives in conference rooms were carrying on a battle of another sort. Many developing nations, particularly the Asian countries, were strongly resisting a U.S.-led proposal by developed countries to link trade to environmental and labor standards through a new "social clause" in WTO agreements. The clause, its opponents argued, was a protectionist ploy that rich nations would use to shelter their own workers' jobs from the competition in developing countries. This stance reflected a commonly held perception that the main competition in the production of goods is between the North and the South. But in truth, this competition -- particularly in labor-intensive commodities -- is not so much North versus South but South versus South. The absence of a mechanism establishing international labor standards is propelling the economies of the South in a race to the bottom in wages and labor conditions.

The social clause, in brief, refers to the proposed insertion of five core labor standards into trade agreements: freedom of association, freedom to organize and to bargain collectively, and freedom from forced labor, child labor, and job discrimination. Many poorer countries either lack the laws to protect these rights, which are enshrined in the conventions of the International Labor Organization (ILO), or they simply do not bother to enforce those laws in their export industries.


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