Trade talks divided as the US gets tough over labour rights


IT was late in the evening in the Marina Mandarin Hotel in Singapore, the venue for negotiations by trade ministers attending the World Trade Organisation conference.

Everyone was tired after a long day of talks and negotiations. A senior American official turned to his European counterpart and snapped: "If we don't get a reference to labour standards, we're not going to agree to anything. The conference will be a wash out."

The official was referring to the sharp division at the first WTO ministerial meeting over whether to link trade and labour practices.

Heads of delegations failed yesterday to resolve the differences over the wording of a ministerial declaration.

The late night failure emerged after Acting US Trade Representative Ms Charlene Barshefsky presented a new draft of a controversial clause on core labour standards to about 50 countries.

The US is ostensibly targeting child and prison labour in developing countries. Poorer nations say this is a cover for protectionism in favour of highly paid American workers.

They are adamant in rejecting a scrutiny role for the WTO, as the imposition of rules about labour conditions would whittle away their trade advantages.

American exasperation was mainly directed against Malaysia, which again yesterday rejected attempts to put labour rights on the official WTO agenda.

But the Asian country offered to accept a ministerial declaration of support for basic labour standards. During open debate, chaired yesterday morning by Ireland's Minister for Trade and Tourism, Mr Kenny, the Malaysian Trade Minister, Mr Rafidah Aziz, said: "We reject any move to discuss and deliberate on labour standards and other social causes in the WTO."

Diplomats confirmed that Washington was threatening to reject other parts of the meetings final declaration unless it won mention of the labour issue. The US official's remark was probably a calculated bluster, however, because the US, with strong backing from Canada and Japan, is keen to make a success of the 128 nation conference through an information technology agreement (ITA) which would liberalise trade by 2000 in the $600 billion market for computers, software chips and other high technology products.

But the incident indicated how the US has set the agenda and how easily the concept of liberalising trade world wide could be compromised by splits between the industrialised nations and the Third World.

Despite the brinkmanship, most other critical issues appeared near [resolution, setting the course for trade business and jobs around the world until the next century.

"I think matters are developing well today," Canadian Trade Minister Mr Art Eggleton told reporters, adding that more time was needed. "I think we're well on the way.

EU officials said they had whittled down the list of items which the US wanted excluded from the ITA. They included optical fibres, television monitors and capacitors, while the European Commissioner, Sir Leon Brittan, had offered to cut tariffs on CDROMs carrying recorded music.

Ministers also agreed to reach an accord in Geneva by February on liberalising telecommunications by 2000, meaning that states like Ireland which signed on would voluntarily end the monopoly status of the national telephone service.

Developing countries have objected that their telecommunications products are not advanced enough to allow them to compete in developed economies. Mr Eggleton said they were well on their way to involving 90 per cent of current world trade in the ITA, which would end tariffs in the fast growing information technology market.

Differences among negotiating countries were minor, he said. "I think most of the substantive concerns in wording for areas like investment (and) competition policy and government procurement, to great extent, are done."

But linking trade and international labour standards remained the most contentious problem last night, he said.

Mr Kenny said, after chairing a meeting of EU ministers, that it was important to have a final ministerial declaration agreed so that the WTO would be seen as a political success.