BELARUS NEWS AND ANALYSIS

DATE:

05/12/2006

Trade policy and decent work

Peter Mandelson

EU Trade Commissioner

EU Decent Work Conference on Globalisation

Brussels, 5 December 2006

In this speech delivered to a conference on Trade and Decent Work in Brussels on 5 December 2006, EU Trade Commissioner Peter Mandelson says that he will seek a "step change" in the way in which the EU's new bilateral trade deals address issues of labour standards and decent work.

Citing the new agreements with ASEAN, India and South Korea for which the EU will tomorrow request negotiating mandates from the Council, Mandelson says: "I would like to see us make a step change in how we integrate decent work and the broader agenda of sustainable development into these bilateral agreements." He argues that rather than seeking a sanctions-based approach the EU would look to establish dialogues on labour conditions and could offer additional concessions in bilateral deals linked to ILO or environmental standards.

Mandelson also calls on European Member States to back the Commission in its recommendation that the European Union withdraw trade privileges from Belarus in response to flouted labour standards. Mandelson says: "The incentives have to be real. Where countries systematically flout Core Labour Standards, we need to be prepared to act. The Commission has recommended the withdrawal of GSP privileges from Belarus and I call on the Member States today to endorse that measure. In my view, this decision is a test case of our collective commitment to the promotion of workers rights as an integral part of our trade policy."

Mandelson also presents the results of two pilot studies undertaken by the ILO and the European Commission in Uganda and the Philippines designed to deepen understanding of how trade agreements affect labour markets and the quality of jobs, especially in poorer countries. This work will be extended, and sustainability impact assessments will be undertaken for all future EU trade agreements.

In an increasingly globalised world, trade is fast becoming one of the most important drivers of economic growth. And that growth is creating jobs, not only here in Europe, but across the developing and developed world.

Show me an economy that grows without jobs, or job creation without a growing economy - you can't. The two are bound together, and trade is indispensable to both.

As I have said many times before, I am committed to creating a social dimension in trade policy, and I believe that the competitive challenge for Europe in the global economy can be harnessed to strengthen both our economy and our social models.

At the beginning of October, the Commission set out a comprehensive agenda for strengthening the contribution of trade policy to Europe's competitiveness - which we called Global Europe. The Global Europe agenda argues very strongly that social justice at home and abroad is an integral part of our competitiveness agenda.

That means policies at home which equip Europe's citizens to take the best from globalisation and avoid becoming victims of the worst. And using our external trade policies to promote growth and sustainable development abroad. These are not distinct agendas. They are one and the same.

We will not shape a sustainable globalisation unless we maintain the support of Europe's citizens; and we will not maintain a global dynamic in favour of openness, unless economic change can really be seen to bring greater opportunity for everyone.

Of course, there are tough choices to be made if Europe is to reform and modernise. But the protectionist alternative the attempt to put up barriers to trade and, therefore, to change is an economic dead end.

But the choice is not between fortress Europe and a race to the bottom. Over the last hundred years, we have fought hard for our fundamental labour standards in Europe, protecting the rights of workers - men and women - and the rights of children. Most of our companies have learnt that decent work makes decent workers. And happier, more committed and more productive workers are what power a knowledge economy.

And while we must be willing to adapt and change to a changing world that legacy is very precious. In the twenty first century it will mean having policies in place to retrain the most vulnerable and reskill them to share in the benefits of economic change. Not just more jobs, but better jobs. And where we can, we have a responsibility to ensure that the same is true in the developing world.

For me, decent work is fairly paid, safe work. Working opportunities that are blind to gender. Work that is part of a wider social network of social security and education that equips people to adapt to change.

In May this year, the Commission's Decent Work Communication set out a coherent policy on decent work both inside and outside the EU. Today I would like to talk about trade's role in that agenda, which inevitably means focusing on what the EU can do to promote decent work abroad.

I want like to say a little about our Generalised System of Preferences - the GSP, and in particular the GSP+. I will also talk about our initiatives for decent work through our bilateral agreements, our work with the ILO to develop decent work indicators, tools for measuring trade and labour market adjustment, and the importance of the Doha Round and the WTO for jobs and poverty reduction.

GSP and GSP+

We know from experience that the EU's own trade policy instruments can offer positive incentives for meeting fundamental labour standards. Our Generalised System of Preferences has for several years offered the additional concessions for countries that respect Core Labour Standards.

This year we extended our GSP to put more emphasis on sustainable development. Under the new GSP Plus scheme, additional tariff preferences have been made available to vulnerable countries that have ratified the main international ILO and UN conventions on labour and human rights, and that have taken strides in environmental protection and good governance, including the fight against drug trafficking.

In the beginning, some countries were less than enthusiastic about ratifying the ILO core conventions in return for GSP Plus. But in the end, all recipients have now signed. Indeed, it was with great pleasure that we received the news in September that El Salvador had finally ratified all ILO core conventions.

Of course, the incentives have to be real. Where countries systematically flout Core Labour Standards, we need to be prepared to act. The Commission has shown that willingness with Myanmar, and again this year after we were advised by international trade unions and the ILO of systematic violations of freedom of association in Belarus. The Commission has recommended the withdrawal of GSP privileges from Belarus and I call on the Member States today to endorse that measure.

In my view, this decision is a test case of our collective commitment to the promotion of workers rights as an integral part of our trade policy objectives. The investigation period has been long, and scrupulous. Almost four years after the start of the withdrawal process, on the basis of a joint complaint by international and European trade unions, and with the involvement of the ILO, the Republic of Belarus has not taken any real, tangible measure to remedy the situation. I have made this clear on behalf of the Commission to the Belarus authorities.

The Member States, in Council, now have the responsibility to ensure the robustness and the credibility of one of our successful policy instruments to pursue the promotion of social standards in our trade relations.

Bilateral trade agreements

We also need to think carefully about how we can put decent work at the heart of the Global Europe agenda and the next generation of our bilateral negotiations, including those for which we will request mandates from Member States tomorrow - ASEAN, India and South Korea. I would like to see us make a step change in how we integrate decent work and the broader agenda of sustainable development into these bilateral agreements.

The EU has always rejected a sanctions-based approach to labour standards - and that will continue. But equally, we can do more to encourage countries to enforce basic labour rights, such as the ILO core conventions, along with environmental standards - not simply in principle, but in practice. Cooperation and social dialogue are certainly important. Transparency, through an independent mechanism, will also help us highlight areas where governments should take action against violations of basic rights. We are also considering an incentives approach.

I know DG Trade has been consulting many of you from civil society to ask for your own ideas on how to push forward the EU's trade and labour strategy and I would like to hear some of those directly from you today.

Decent Work Indicators

We also need to deepen our understanding of how trade agreements affect labour markets and the quality of jobs, especially in poorer countries. This requires reliable information and reliable indicators to help poorer countries plan the right social and employment policies to maximise the benefits of trade opening and support the most vulnerable into decent jobs.

Last year, DG Trade joined with the ILO to undertake a pilot project to develop decent work indicators in Uganda and the Philippines, and to determine the feasibility of using employment data to assess the effects of trade opening on labour market adjustment in developing countries.

Today we are publishing the three final reports of our collaboration. The indicators developed provide an accurate picture of the quality of work in these countries - employment of men and women, child labour, working hours, earnings, job security, safety at work, social protection and more.

In partnership with the ILO, the Commission aims to extend this work over the next year. Our goals are to develop decent work indicators in other developing countries, and to develop a tool for assessing the effects of trade agreements, such as our Economic Partnership Agreements with ACP countries, on labour market adjustment and policies for decent work. We also intend to use the methodology alongside our established Sustainability Impact Assessments.

I would like to thank the ILO for their continuing work in this area - one of many examples of joint initiatives that we have carried out together since Director General Somavia and I launched our roadmap for closer cooperation in Turin in May 2005.

WTO and multilateral initiatives

I would like to turn briefly to our multilateral negotiations. We need to keep the Doha Round moving. If Doha fails, the costs will be felt everywhere. It is not just the hundreds of billions of euros annually in trade that will be lost, along with the potential employment that comes with it - but also the agreements that will extend duty free quota free access for the very poorest countries and straighten out customs rules, adding billions of euros to developing country revenues.

In other areas of the WTO system, the EU continues to press for decent work. In our Trade Policy Review in 2004, we set out the case for the social dimension of trade policy, and in the EU's next Review in 2007 we will press that case again. We always encourage other WTO members to do the same.

But there is one area of our multilateral negotiations where the global community has had less success. Whilst a reference to Core Labour Standards was included in the Declaration of the 1st WTO Ministerial Conference (Singapore 1996), WTO members could not agree to include this issue as part of the Doha Round.

Many of you are familiar with the history, and I won't dwell on it here. Only to say that I think it is regrettable that many developing countries felt the need to resist including this important area in the negotiations. Of course we need to be clear that developing countries have a right to use their comparative advantage in labour costs to allow their economies to grow.

But the ILO core conventions are not about labour costs - they are about basic standards. Developing countries need to be reassured that Core Labour Standards are not a protectionist tool, but a guarantee of fundamental rights. NGOs and unions need to help us spread the word.

The same, incidentally, is true of observer status for the ILO in the WTO, which we continue to support, but which certain developing countries continue to resist.

Trade and Developing Countries

I want to devote the rest of my remarks to another angle on trade and work. This is not the abuse of work, but the structural conditions in the developing world that prevent people working at all.

In Europe, we know the challenges that new entrepreneurs face when starting up small businesses - the businesses that are the backbone of job creation across the EU.

But spare a thought for the budding entrepreneur in Africa. She may be lucky enough to have a supportive family, encouraging teachers, to have been spared the trauma of wars and famine. With engineering qualifications, a bright mind and bursting with youthful enthusiasm, she sets up a radio shop.

But she soon realises that radio equipment made in a nearby country is taxed heavily at the border. If she lives in a landlocked country, she faces more burdens and transport delays. Should she inflate the price of her goods - so that only a handful of richer customers can afford to buy them? Should she pay her shop assistant less? Undeterred, she uses her engineering knowledge to construct radios herself using parts. But the parts she orders face the same costs, get held up at customs, tied up in paperwork, and never turn up. Disappointed and frustrated, she gives up, unable to build a business that could have created jobs for some and radios for many - an educational tool that we in the developed world take for granted, even in the most rural areas. This is a story repeated every day in some of the poorest countries of the world - a mountain of untapped potential.

The Economic Partnership Agreements that the EU is currently negotiating with ACP countries will help build regional markets and go some way to loosening the bureaucracy that chokes new businesses and associated jobs before they can flourish.

Trade facilitation - updating customs procedures that have remained unchanged for over 50 years - is also one of my major priorities in the Doha Round. More than in any other area of trade negotiations, everyone wins with trade facilitation. Nobody loses.

We are also discussing the inclusion of social chapters in Economic Partnership Agreements with our ACP partners. Development assistance for capacity building will be available to promote decent work in different areas of the economy and social life, following the Decent Work Agenda of the ILO.

Conclusion

Let me finish by thanking all of those who have taken part in our consultations on the Decent Work Communication, who are here today, and who have pushed this agenda tirelessly every day.

Work - decent work - is what lifts people out of poverty, gives them dignity, confidence and opportunity. And trade - open trade - provides many of those jobs that give people a better, more fulfilling life. For these reasons, our trade and social policies need to work hand in hand. Our Decent Work Communication, and this conference, is doing just that. Let us use this foundation to do better still.

Making trade a part of sustainable development means putting it at the service of decent work.

Source:

http://europa.eu.int/rapid/pressReleasesAction.do?reference=SPEECH/06/779&format=HTML&aged=0&language=EN&guiLanguage=fr

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