Harvard International Labor Standards

INTERNATIONAL LABOR STANDARDS

INTERNATIONAL LABOR STANDARDS AND TRADE AGREEMENTS

By Student’s Name

INTERNATIONAL LABOR STANDARDS

Introduction

One of the most controversial proclamations of all times in global approach discussions

has been the relentless proposal for “international labor quality attainment (Basu et al., 2008).

Weak labor manifestos in some developing nations have been the reason as to why most

governments are seeking to adopt international labor laws (Economic Perspectives, 1999).

Stephen Golub of the Swarthmore College (Economic Perspectives, 1999) claims that the issue

of low wages cannot be handled through the conformation of labor regulations only. He asserts

that a much more formidable communal protective network will come in handy in the securing

of workers’ rights. Stephen specifically targets the unskilled employees in any given country and

gives his authority that international labor standards would be efficient in the safeguarding of

staff’s entitlement (Economic Perspectives, 1999). In so saying he equally proposes the codes of

performance as an accredited component to be used in regulating of necessary labor privileges.

When speaking of International Labor Standards, it is paramount to lay one’s focus on

five specific areas. These are the virtue of being able to systematize and negotiate collectively,

secondly is a person’s independence in forming of various alliances and coalitions (Economic

Perspectives, 1999). Third is there should be no forced or obligatory labor laws imposed on any

individual while the fourth is children should not be used as workers. Lastly is the correct

warranting of favorable working conditions and these are inclusive of (logically stipulated

weekly hours, a mandated rest over the weekends or whichever day the company deems fit).

Next is the exerting of periodical working limitations for the young adults, and wages should be

reconcilable with the effort given (exploitation of employees must be avoided). Besides quality,

health and safety measures should be adhered to (the well-being of the staff should be a priority).

Employment bigotry and prejudice should be eradicated from the workplace as all workers

INTERNATIONAL LABOR STANDARDS

should have equal rights (issues of race, skin color, and nepotism) (Economic Perspectives,

1999).

After registering impressive results through the globalization of product assembling and

fabrication, many nations (worldwide) inclusive of the United States sought to find out whether

harmonization of labor rules would prove effective. By so doing the Geneva Oriented

International Labor Organization (ILO), a consortium instructed with the duty of overseeing

global labor statutes was set up (Economic Perspectives, 1999). Since its conception in the year

1919, the ILO has constructed 170 labor laws which have however faced approvals and

confirmation by several countries which have abode by them. In a different view, they (ILO

regulations) have equally faced rejection is some nations which term them as “disguised

protectionist calculations” (Economic Perspectives, 1999). In so saying, many developing states

have not relinquished sovereignty to the ILO’s rules in a bid to steer clear of its control (Kanbur

& Svejnar, 2009). It is, for this reason, I form the basis of my essay. I will accentuate the

arguments for or against the international labor regulations and seek to explain their relevance in

the global market. I will also expound on the appropriateness of trade endorsements as an

important concept in the implementation of international labor rules between nations. In this

essay, I will equally broach on subjects of theoretical and empirical analysis of the same.

Theoretical Literature

An extensive literature has been formulated on the modification and advancement of the

acceptable working hours which is one of the rules of the ILO. It is an important aspect as it

relays close correspondence between the GDP (Gross Domestic Product) and per capita (NRC,

2004). A weekly summation on 70 hours is a correct reflection of the input workers from

emerging countries portray especially in the agricultural sector. Current research carried out in

INTERNATIONAL LABOR STANDARDS

developing nations such as Vietnam reveal that children are no longer exposed to the formal

economy as their parents enjoy boosts in their wages. At the same time, it was discovered that a

weekly fifty hours input in manufacturing industries proved less strenuous and showed

disparities from the working environment other workers were exposed to. As a result, these

contributions of long working hours reflect the unfortunate repercussions of the lifestyles of

various workers in a developing country.

In the US annual average earnings per individual are quantified, assessed and evaluated

as a believable figure reflecting the employee's efforts (NRC, 2004). To some extent a fraction of

the movement in annual proceeds necessitates the review of changes encountered in the trade

cycles. It goes hand in hand with the alterations regarding collective hours inculcated in a job

meaning that such adjustments consider strong macroeconomic pressures that influence the work

market. In growing countries, these impacts are frequently much formidable and as is mentioned

above a huge section of the workforce emanates from the informal and the rural parts.

Collective profits and earnings are subject to sizable sampling mistakes as they are not

adequately accounted for especially in various statistical parameters. It is important to note that

changes in the earnings of many workers usually reflect the impacts of natural disasters and

occurrences such as civil conflicts, famine, and drought (NRC, 2004). Various policy

modifications inclusive of little issues to do with fertilizers (its unavailability) also play a

fundamental role in effecting changes in one’s salaries. An augmentation in revenues per annum

directly mirrors the ending of national calamities (the civil war) or the renovation of strategies

inclusive of importation of manures. It does not however necessarily indicate a change in the

labor merchandise policies (NRC, 2004).

INTERNATIONAL LABOR STANDARDS

Furthermore, the WTO (World Trade Organization) speculates on the possibility of the

usage of trade actions into the imposition of work systems, or it could pass up as a justification

for protectionism (WTO, 2005) cited in (Lukauskas, et al., 2013). In summation, Estreicher

(2005) mentions that a bulk of today’s literature on global work standards pays most emphasis

on the appropriateness of connecting labor laws with commerce.

Empirical Formula

Empirical evidence implies that there is a formidable link between energy expenses and

yields in productivity but variations between them spring up at times. The influence of labor laws

on an apparent discrepancy between income and the rate of work is uncertain. Advocates of labor

laws state that poor standards of work depress legitimate gains and profits comparative to what

energy legislation and the expected output stipulates. Besides, while the acquisition of

investment funds and technological advances may serve to increase productivity output,

improvements in wages is, however, uncertain (in developing countries). Economists counter

argue that global commerce with little earning countries are not able to suppress overall benefits

and labor laws in higher earning countries (Kanbur & Svejnar, 2009). They, however, comply

with the ideology that this particular pattern of trading does affect the unskilled employees who

are in a direct contest with incoming goods and services (from progressing countries).

Adverse broadening gaps in wage equities in the US and high salaried countries

correspond to the ideology that international commerce with little earning countries has an

enormous influence (Flanagan & Gould, 2003). In conclusion, research shows that international

trade with low earning nations has brought about a significant increment in income

inconsistency. On a positive note, it has been recorded that through the unification of labor

INTERNATIONAL LABOR STANDARDS

standards, the fate of unskilled employees has been addressed as the system offers them a safety

net (Flanagan & Gould, 2003).

Justification for or against International Labor Laws

In considering the connections between labor set ups and globalization arguments against

labor laws are equally important. These propositions highlight numerous challenging subjects

and most crucial include questions about whether market failures guarantee a country’s adoption

of labor laws (Flanagan & Gould, 2003). Secondly, the issue that proponents ask is whether in

the sabbatical of labor standards are nations pliable in devaluing their work settings to attain a

competitive edge? Thirdly, should international market laws be given more credit than local

political undertakings in the governing of a countries standard of labor laws? Next, has to do

with the relevant conventions employed in the establishment of labor regulations? Then we have

the question of the availability of proof on the comparative productiveness in the incorporation

of labor standards versus trade? Besides arguments are raised as to whether these dimensions are

useful in the amelioration of conducive labor markets. Lastly, if there exist principle substitutes

to international management for enhancing labor laws? (Flanagan & Gould, 2003).

Labor Charges and International Aggressiveness

There are those who are skeptical of incapacitated labor laws in developing nations

would be an imminent danger to the economic standards of the citizens in that country. This is

because there is a high possibility a standard ILO would make it easy for companies to shift their

operations to such countries where labor would be cheap. In so doing “ race to the lowest point”

(a business notion to indicate changes in power) would be created in such a scenario. A bigger

threat to this movement would be that a change would occur in the bargaining of authority in that

nation’s capital. This is because a mightier company is capable of dictating different trade terms

INTERNATIONAL LABOR STANDARDS

than what the country is used to hence creating trade imbalances (Flanagan & Gould, 2003).

Consternation and worry are already present in developing nations as they are required to double

their imports so as to abide by the international trade laws.

The general business hypothesis does not correlate with the concept as mentioned above

(a race to the lowest point). It, however, states that global disparities in labor prices are not in a

position to prohibit a mutually profitable trade between any two nations. Furthermore, it

insinuates that trade diversification between two commercial partners’ works to strengthen

lucratively and commercial success between them (Flanagan & Gould, 2003). Besides the theory

stipulates that the skepticism established between a higher earning country’s competitiveness

with a lower receiving state disregards important business decisions. These decisions have to do

with the links between wages and work productivity in that dismal gains do not mirror small

labor productivity. If the earlier mentioned case occurs it will then imply that the expenses of

manufacturing goods differed minimally to what rates in the profits solely may have hinted

(Flanagan & Gould, 2003).

Labor Propriety and Universal Labor Laws

The concept that most human rights enthusiasts believe is that through the appraisal of

labor laws in developing countries workers would tremendously profit. An important disparity

must, however, be put in distinguishing between “core” labor laws (acceptable human rights) and

“money” oriented standards (Kanbur & Svejnar, 2009). One hypothesis forms its argument on

whether adjustments concerning cash caliber will aid the worker's plight in developing countries.

There are those who believe that dictating various labor market activities inclusive of correct

appropriation of wages with working hours will ascertain improved labor market laws (Flanagan

& Gould, 2003).

INTERNATIONAL LABOR STANDARDS

Secondly, the conditions under which workers operate on and the adjustment in the cost

of employee’s recruitment would also prove counter-productive. The issue of economic dualism

in developing countries may be equivocally be addressed by the formation of labor unions which

would serve to fight for the work conditions of its citizens. In so doing, industrial earners who

tend to have differing incomes with those workers predisposed in other sectors such as the

service industry and the agricultural one would benefit from harmonized salaries (Flanagan &

Gould, 2003). It is a universally accredited concept by market makers and policy instructors that

pushing for commerce and labor market stratagems that are credible is productive. Its

productivity is seen in its efficiency in the upgrade of work proceeds rather than directing

volumes of dividends and earnings (Dahan, et al., 2016).

Trade penalties have also proved counter-productive in developing nations as they serve

to slow down growth and can have debilitating effects on the modernization efforts of labor

rules. Such a scenario would imply that developing countries will lose its accessibility to other

markets and especially the global one. Foreign-based assistance regarding training and offering

of educative lessons towards workers in an emerging country shows the dependability aspect of

an internationally imposed labor law. It proves efficient as it can rescue a disintegrating country

and prevent it from facing further woes. In so doing, it prevents a myriad of abusive labor

customs such as the imposition of unnecessary trade barriers to weak countries, and harassment

of its staff (Flanagan & Gould, 2003).

On the other hand labor laws, sanctions work in a positive way in the prevention of

humanitarian abuses which are a global menace. For instance, the ungodly hours of work

individual members of (an emerging country) are exposed to contrast with the laws and

regulations of labor laws (Basu et al., 2008). Women and children to fend for themselves have

INTERNATIONAL LABOR STANDARDS

often been victims of wickedly constructed company rules which overwork them and do not take

into account the usefulness of regulated international labor laws. Such a move would render

generational suicide as it saps up the life, strength, and stamina of the young people especially

children and kills morale for work (Basu et al., 2008). Children’s Employment is one of the most

dangerous aspects considered in labor laws as it not only denies a child its right to education but

exclusively bars it from attaining social maturity and growth.

Trade Consensus between Countries and International Labor Systems

Preferential trade agreements (PTAs) serve as today’s pillars in the international market

whereby the unlimited scope is rapidly redesigning the architectural world of trading (Chauffour

& Maur, 2011). Total integration and corporation of various agreements to a working

multilateral segment is a key factor in the expansion of trade and commerce within nations.

PTAs have formulated custom unions close to three hundred rules which have proved useful

especially the reciprocal tax reduction of the World Trade Organization. Such a move has seen

the rapid increment of bilateral and geographical PTAs being developed.

Despite the challenge of trade diversions which harms both its affiliates and non-member

countries, PTA is still able to guarantee economic development. Additionally, they are in a better

position in creating competitive markets which in turn prove productive for both its retailers and

customers and improves economies of scale. Also, they are fast becoming popular in numerous

developing nations as they implement, advocate, and lock in advancements in a broad aspect of

policy implementations in regions inclusive of competition rules, financing programs and state

procurement (Chauffour & Maur, 2011).

The negotiation and enacting of the August 6th, 2002 Trade Act by the Unites States saw

the execution of three trade agreements namely FTA (Free Trade Agreement) between three

INTERNATIONAL LABOR STANDARDS

nations. These were Singapore, Australia and Chile whose FTA mainly focused on commerce in

services, goods, issuing of tenders, investment procedurals, intellectual assets rights, labor and

environmental presentations (UITC, 2005). The United States and Singaporean (FTA) enables

co-operations between the two former mentioned nations and other South East Asian countries in

the implementation of environmental and workers labor rights. It promotes equitability in the

treatment of national and international access to goods and services with specific mandates

written down for the textile and clothing industries (US-Singapore FTA Chapter 5) cited in

(UITC, 2005). It equally provides a platform for the eradication of all tariff duties existing

between them for ten years, especially with the agricultural/industrial goods. In so doing both

nations adhere to the international labor laws of the harmonization of prices which is an

important aspect of the trade.

The business in services agreement which assures considerable favorable treatment

(between nations and their services) covered in the WTOs (GATS) short for General Agreement

on Trade in Services is lucrative. In service trades carried out across borders, the treaty

eliminates significantly all legal reasons for prejudice and bigotry about all business services

offered (between two countries). The “negative enumeration” tactic of the agreement loses all

restrictions in the service industry unless a particular position and objection are raised.

The catalog of reservations massively influences royal treatment by conducting favorable

dealings with the country it is bilaterally engaged with (in trade and commerce) (UITC, 2005).

Singapore, for example, has lesser strict directives as far as the United States service industry is

concerned. It has provided free access to its law firms, engineering and architectural professions,

certification and registering of patents and logos, wealth ownership and property inspection

services. In so doing the two countries agree to work together towards the establishment of

INTERNATIONAL LABOR STANDARDS

standardized rules not just for themselves but for the rest of the professional international service

providers.

Regional trade agreements work in compliance with the international labor laws and the

overall adjustments of workers’ wages, and handling of economic and social distresses (Addo,

2015). In so doing, the agreement can facilitate open customs policies which in turn enhance the

efficacy of goods entry, manufacturing, and methodological handling. Both parties must adhere

to particular responsibilities and obligations about custom conduct techniques so as to have

uniformity in their assessment approaches (UITC, 2005). By so doing, the FTA would be

addressing issues of transparency, side notes, and settlement of disagreements which are all laws

as per the international labor standards organization.

Accountability offers openness and fairness regarding the adoption and utilization of

administrative policies whereby both parties conform to adhere to all the regulations, rules,

methods and administrations rules. In settlement of disputes a Joint Council is formed whose

purpose is to resolve conflicts via consultations and the incorporation of a dispute jury. In cases

whereby a penalty is monetary oriented, its enforcement should be in such a way that it does not

tamper with the trade blows leading to concessions in commerce (UITC, 2005). The existence of

14 side notes and exchange letters on a broad topic of subjects serves to highlight the countries

positioning as far as denial of profits and illegally acquired benefits is concerned. This applies to

the United States; Singapore, however, is mandated with the task of presenting a legislative stand

on its transactional virtues which form the primary foundation for tax valuation.

In conclusion, trade agreements between countries have indeed served to foster numerous

international labor laws and improve some of them. Trade agreements have also proven the

importance of incorporating bilateral agreements as other nations equally stand to benefit. A

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good example is the South East Asian countries which have profited from the United States-

Singaporean commercial joint.

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References

Addo, K., 2015. Core Labour Standards and International Trade. Heidelberg: Springer.

Basu, K., Horn, H., Roman, L. and Shapiro, J. eds., 2008. International labor standards: history,

theory, and policy options. John Wiley & Sons.

CHAUFFOUR, J.-P., & MAUR, J.-C. (2011). Preferential trade agreement policies for

development a handbook. Washington, D.C, World Bank.

Dahan, Y., Lerner, H. and Milman-Sivan, F. eds., 2016. Global Justice and International Labour

Rights. Cambridge University Press.

Estreicher, S., 2005. Cross-border human resources, labor and employment issues: proceedings

of the New York University 54th Annual Conference on Labor (Vol. 54). Kluwer Law

International.

Flanagan, R.J. and Gould, W.B., 2003. International labor standards: Globalization, trade, and

public policy. Stanford University Press.

Kanbur, R. and Svejnar, J. eds., 2009. Labor markets and economic development. Routledge.

Lukauskas, A., Stern, R.M. and Zanini, G., 2013. Handbook of trade policy for development.

Oxford University Press.

NATIONAL RESEARCH COUNCIL (U.S.). (2004). Monitoring International Labor

Standards: Techniques and Sources of Information. Washington, DC, National

Academies Press. http://public.eblib.com/choice/publicfullrecord.aspx?p=3376787.

US International Trade Commission, 2005. The Impact of Trade Agreements Implemented under

Trade Promotion Authority.

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UNITED STATES. (1999). Economic perspectives: an electronic journal of the U.S.

Department of State. Washington, D.C., U.S. Dept. of State, Office of International

Information Programs. http://purl.access.gpo.gov/GPO/LPS21778.

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