Asia forum confronts free trade


GENEVA -- This weekend the Asian-Pacific Economic Cooperation forum will meet in Osaka, Japan, at heads of government level.

With China and Taiwan in the same room, this is the meeting place for real business in the economically hottest patch on the earth's skin.

Last year in Jakarta, the APEC heads of government committed themselves to free trade across the region by 2020, at the latest. This year, they have to start showing "a willingness to deliver" if they are to stand any chance of meeting that target.

The Japanese hosts want a consensus to emerge.

Promises of liberalization, when they come, will evolve as the self-interest in such moves becomes apparent. Besides, argue the Japanese, formal tariffs and quotas obstruct trade less than more subtle barriers, such as regulations on health and competition. And hidden benefits like child labor, give exporters a fillip that more than compensates for tariff barriers.

Social clause demands

This Japanese reticence is mostly for the anti-free-trade lobby in the U.S., which is going to demand a "social clause" to make it difficult for the developing economies to achieve a favorable trade balance by using cut-price child labor, bonded labor, non-unionized labor, and even, as in China, the "slave" labor of prison camps.

Anti-free-traders tend, in the business and union worlds, to be at the more conservative end of the political spectrum. But on this subject their natural allies are the liberals and "greens". It is a formidable coalition.

This week in Geneva, the debate in all its shades was on show at the International Labor Organization.

To listen to the Indian government delegate pontificating at enormous length on the perils of interference in the internal affairs of the Indian economy is an unwelcome reminder of how diplomacy, however polite, can filibuster into exhaustion any attempt to find a rational meeting of the minds on the subject of child labor.

And, to be fair, such countries have a point. For the West to demand higher wages and better social conditions from their Third World competitors is to damn the poor twice, once for being poor and second, for using the competitive advantage that their underdevelopment gives them to raise themselves out of it.

To cut through this impasse, which infects every forum where it is discussed,the director-general of the ILO, Michel Hansenne, has taken an important initiative.

The ILO, he says, has had on the statute book for years all manner of detailed international accords on labor practices -- over 170 altogether.

Many of them are effectively gathering dust, ratified by only a handful of countries. So he has persuaded the union representatives to put on the back burner the debate on sanctions in support of the "social clause" while he tries to turn up the heat on the universal ratification of a "core group of international standards" -- on child labor, forced labor, the right to organize and equal remuneration for both sexes.

Last May, Mr. Hansenne asked the 171 member states to ratify seven key conventions. "The response far exceeded my expectations," he says. "It looks as if we're going to double or even triple the number of ratifications. In the last five months more have ratified than in the last 10 years."

Ironically, the U.S., which is the most vocal of Western countries on the "social clause," has one of the worst records on ratification.

It is going to stymie progress in Osaka and it is going to be a brake on President Clinton's campaign for long-term efforts at worldwide liberalization in Singapore next year. If Mr. Clinton is truly going to make his mark as a trade president, one of his priorities must be to give Congress a firm lead on the need for ILO ratification.

F: Jonathan Power writes a column on Third World affairs.

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