A column by T. K. Bhaumik, Senior Advisor, Policy, Confederation of Indian Industry (CII)

Would You Ask Your Cobbler to Cook your Dinner?
 

T K Bhaumik discusses the "social clause" and why it is not relevant to the WTO

It is more than a month since the Multi-Fibre Agreement (MFA) has been phased out but the issue continues to cause heartburn. The fact that the issue continues to cause concern among a section of the developing nations became obvious when at the World Economic Forum the Secretary General of the International Textiles, Garment and Leather Workers Federation observed that the WTO should have imposed a 'social clause' as part of the trade rules. Clearly the Secretary General's comment reveals the concern of some textile exporting countries that are likely to be impacted by the phasing out of the MFA. In the absence of the social clause, the Secretary General argued, some developing nations have unfair competitive advantage vis a vis others. Playing the blame game, the Federation hinted that the social clause, which would have been a part of the WTO rules, was scuttled by certain large developing countries, which had opposed the social clause.

Developing countries have often represented contradictory interests and clashed with each other at multilateral fora. There is nothing new about this. And therefore the Federation's statement too comes as no surprise. However, what is surprising is the extent of ignorance about the concept of the social clause and its scope. What's more, there is a great deal of ignorance about the role of the WTO itself. Further it seems that the Federation has no idea as to the exact nature of the opposion to the inclusion of the social clause in the WTO rules. India, as one of the large developing countries, has been opposed to the idea of inclusion of the social clause. It is however  important to point out that while India opposed its inclusion, it is not opposed to multilateral discipline outside WTO such as in the ILO with respect to any social clause.

India is one of the few countries that is a signatory to more than 100 ILO conventions, barring two. In this context, India’s record is better than those of the developed countries. India would, perhaps, not even object to strengthening -  leading to empowerment - of ILO, the way WTO is. In that case, major opposition can be expected from the developed countries. What India had objected to is the inclusion of social clause in WTO. And that is because WTO is a trade body and not an organisation of employers. ILO is the relevant organisation that is equipped to deal with social issues, not WTO. And even there, ILO is equipped to handle only those issues related to the working conditions of workers and not other issues in the social clause. Further, WTO is also not a supra-national body and is therefore should not be involved in every governance issue.

After all, you don’t ask your cobbler to cook your dinner. Similarly, you wouldn't expect the WTO to meddle into your country's  governance. WTO is a trade body and let it be so. In every country, affairs of trade and affairs of labour or law and order are dealt with separately by separate ministers, because they are so much different. India would not mind WTO participating in ILO meetings and vice versa. But for that matter, why does WTO  not invite ILO to observe the proceedings of its Ministerial Conferences. While it has a special relationship with UNCTAD, it has no dealings with ILO. If there is any relationship with the ILO, it is only academic and not functional. Why is it so? It is because both WTO and ILO are clear about their respective roles.

If developing countries have problems among themselves, there are several ways to resolve them. There are WTO mechanisms available. These misudnerstandings often arise when the countries themselves have a poor understanding of the role of WTO. This lack of understanding could prove to be dangerous not only for the developing nations but could result in derailing the WTO proceedings. It would perhaps be a good idea if in the post-Agreement on Textiles and Clothing scenario  scenario developing countries should hold a conference among themselves, discuss possible approaches, work out their apprehensions and evolve a strategy for future interactions. The developing nations need to display a spirit of cooperation if they have to benefit from the WTO proceedings and earn for themselves their rightful share in the global market. Lack of cooperation cost them dearly during the Uruguay Round, and yet they don’t seem to have learnt any lessons. If they cannot cooperate, they should at least abstain from misguiding WTO and distorting the global trading environment.

[www.icfdc.com, 8 April 2005]