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WTO AND SOCIAL RESPONSIBILITIES

The Brookings Institution, Washington, DC. October, 19th 2001 - TRADE AND LABOUR STANDARDS

We are getting together under the clouds of global tensions and economic uncertainties. The developments since September 11 indicate an agenda that exceeds combating terrorism. While it does not amount to a civilizational conflict in the sense in which Samuel Huntington projected it, we are certainly witnessing the emergence of a paradigm shift in the use of force. The war of the 21st century is, in the words of President Bush, the "economic war". In a seminal sense the economic war began, as far as the developing and under-developed societies are concerned with the setting up, especially, of the WTO.

It is within this ambience that the idea of bombing Afghanistan with bread needs to be seen. It does not have to be argued that this apparently novel gesture is calculated to win the goodwill of the Afghans. But such an idea could not have arisen but for the crass and sub-human poverty of this long-suffering people, and is, to that extent, a real insult to the dignity of the Afghans. Poverty becomes, thus, a precondition for the effectiveness of the "economic war". By the same logic, the mindset that underlies the 'economic was thesis' would want to aggravate and perpetuate poverty in non-western societies.

Seen from an Eastern perspective, the fundamental issue vis--vis the WTO and related regimes is the scandal of inequality in an age that was inaugurated by the passionate cry of the French Revolution: "liberty, equality, fraternity!" Western liberal democratic societies pride themselves on their legacy of egalitarianism. And, arguably, the ideal of equality is a crowning achievement in western history. But the western commitment to equality remains suspect to the rest of us because they have not upheld this, in any real sense, in dealing with our societies. In its transactions with non-western societies, the west has operated on the privileges and profits of inequality.

The redoubtable WTO towers as a contemporary symbol of this scandal in history. By now the naked truth stares at the rest of the world that this massive and menacing global instrument has been crafted to advantage the prosperous and privileged nations of the world at the cost of their poorer brethren all over the world. The sanctimonious advocacy of the social clause by the protagonists of WTO is a case in point. According to this, no product that involves child labour or forced laobur can be sold in world markets. On the face of it, this loks a moral stance, but in point of fact this is a patent piece of protectionism meant to favour the MNCs. Take India as an example. If the social clause is rigorously implemented, it would amount a virtual and veritable ban on a large range of our export goods. This has devastating implications because an estimated number of 350 million people in the unorganized sector would have to be excluded from any productive activity. Unlike the US, for instance, India does not have a national minimum wage policy. So, in the strict legal sense, virtually all those who are in the unorganized sector come in the category of 'forced labour'. Also, nearly 65 million children below the age of 14, who should have been in schools, are working to earn their livelihood.

The western patronage for the social clause, to carry any conviction, needs to be complemented with at least two major thrusts. First, sustained pressure needs to be mounted on the governments of non-western societies to improve their track record in areas such as universal education, national minimum wage policy and rural unemployment. Second, ways and means will have to be devised for under-writing the cost of education in most of these societies. This is done best by writing off the Third World debt as a lion's share of the resources of these countries goes into debt-servicing.

The second major issue in this regard is the economic unilateralism that the WTO regime implies. The emphasis on the free flow of capital is not matched by the free movement of labour. The west, in other words, is free to express its native strength and resources; whereas the developing countries are not permitted to benefit from their essential resource, which is skilled manpower. The patently unjust and unequal situation is all the more reprehensible given the demographic imbalances of the world. Asia today houses almost a half of the global population. The unemployment situation in most of the Asian societies has reached explosive levels. Surely the world can do better with a purposive demographic readjustment, provided the privileged nations of the world overcome their residual racial allergy to the presence of the coloured people in their midst.

It is imperative that these and other related issues are addressed expeditiously and with an open mind. The economic inequalities of the world have already reached unsustainably morbid levels. To try and aggravate it any further through deliberate systemic provisions and policy maneuvers is to act very irresponsibly indeed. It would be a very great tragedy indeed to craft a global order without the willingness to give up the parochial mind. The idea that the harvest of globalization can be in - gathered with out meeting the responsibilities thereof belongs to the realm of wishful thinking and needs to be seen as such.


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