Asians Rally Against Wage-Trade Link 
International Herald Tribune
April 4, 1994
Michael Richardson 

Southeast Asian nations have agreed to work as a group to oppose attempts by the United States and European countries to include a "social clause" linking trade and labor standards in future international trading rules.

The issue looms as a major bone of contention when ministers from about 120 countries meet next week in Marrakesh, Morocco, to formally conclude the Uruguay Round global trade pact.

Analysts said Sunday that the decision by members of the Association of South East Asian Nations to act as a bloc on the issue despite major disparities among them in their levels of wages and working conditions reflected deep suspicions by virtually all developing countries in Asia about the West's motives in pressing for such a link.

Southeast Asian nations have made extensive export gains in Western markets in recent years.

The ASEAN countries are concerned that Western states will use any social clause as a device to force developing nations either to raise their labor costs to agreed minimum levels or face special tariffs on their goods to compensate for the fact that they are produced with much lower wages.

ASEAN comprises Indonesia, Malaysia, the Philippines, Singapore, Thailand and Brunei. President Suharto of Indonesia said last week that industrialized nations were pushing developing countries on such issues as raising the minimum wage because they faced internal economic problems and declining competitiveness.

Mr. Suharto's comment takes on added weight because he is also chairman of the Nonaligned Movement, which has 110 members, mainly from the developing world.

The Malaysian prime minister, Mahathir bin Mohamad, said that Western nations were trying to weaken developing nations by imposing minimum wages.

Such a measure could lead to rising unemployment and discontent in Asia, he said, because it would remove one of the region's major competitive advantages - lower labor costs - and force factories to close.

U.S. and French officials have agreed that the World Trade Organization should enforce a connection between trade and labor conditions. The organization will replace the General Agreement on Tariffs and Trade as a more powerful watchdog over the global trading system from 1995.

France wants the body to apply standards that will prevent countries from exploiting children, prisoners and bonded workers as a means of gaining trade advantages.

The United States wants to set a broader approach by having a link between workers' rights and the world trading system added to the declaration that will be made at the April 15 signing of the Uruguay Round trade accords in Marrakesh.

ASEAN officials said that the U.S. proposal broke a promise by the Clinton administration not to introduce new issues after the Uruguay Round negotiations ended last Dec. 15.

The organization is also worried that the introduction of a controversial social dimension would divert attention from work that needs to be done to ensure that measures to liberalize world trade contained in the Uruguay accords are actually applied.

Officials said that labor rights were a complex issue and that the World Trade Organization was not the best forum to deal with them.

America has "introduced a dangerous element by trying to impose its will on less developed countries," said K. Kesavapany, Singapore's permanent representative to the United Nations in Geneva, where much of the international debate on the proposed social clause has taken place.

"This may lead to a North-South divide on world trade," he said.

Wong Kan Seng, a former Singapore foreign minister who is now home affairs minister, said recently that with the conclusion of the Uruguay Round, Asian countries would face more subtle forms of protectionism, such as managed trade, imposition of nontariff barriers and social clauses.

Reflecting a view that is widely held in Asia, he said that many in the West were ambivalent about the triumph of market economics.

"They welcome China opening up but fear the resulting Chinese competition," Mr. Wong said. "Loud complaints about Japanese competition are already a feature of international discourse, and the volume of similar complaints about South Korea, Thailand, Indonesia and Malaysia is increasing."

He said he suspected that East Asian countries were being singled out by the West "because it is impolitic to draw too much attention to competition from cheap agricultural products and manufactures from the new democracies of East Europe."

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