Unfair Competition from Countries without International Labour Laws - Term Paper Example

Free Trade and Unfair Competition from Countries that Do Not Comply with International Labour Laws Freetrade is an arrangement in international trade where governments do not interfere with international trade, namely imports and exports. There are numerous free trade agreements that exist between countries, with the most well known being the North American Free Trade Agreement (NAFTA) that exists in North America and the trade agreements in Europe. The World Trade Organization vouches for free trade agreements, and they are supported by governments putting in place fair rules to guide labour in their countries (Oelz & Muller, 12). Labour laws are rules put in place to guide countries in setting regulations against the exploitation of workers within their borders. Many developed countries have implemented fair labour laws in their countries. They have put in place rules to protect the workers in their countries against exploitation by employers, both public and private employers. In this regard, there is a minimum wage set; workers rights to form a union are protected among other rights. However, there are countries that still have not adopted labour standards in their work force. These countries still have labourers earning below minimum wage, and child labour still exists in these countries (International Labour Office, 15). In most cases, these countries are the less developed countries. Questions as to whether the countries that have not regulated their labour laws get unfair advantage due to the existence of free trade have arisen of late, with the world trade organization being under fire for not doing enough to enforce labour laws, or rather to ensure that they are upheld by all countries participating in international trade. In some quarters, the World Trade Organization has been criticized for not openly declaring products that have been manufactured by child labour as illegal, instead being silent as unfair practices continue to take place (Mosley, 1). That free trade allows countries without labour regulations to have an unfair advantage in international trade is a fact. This is because countries that do not have labour regulations engage in unfair production practices in regard to labour. This is because the ccost per unit of production is cheaper as compared to the cost per unit of products produced in countries where international labour laws are observed. In most of the countries that do not have labour standards, there is child labour. With child labour in place, production becomes cheap because these children are exploited in the payment of their wages. It is important to note that child labour has been declared illegal by the International Labour Organization because child labour is a violation against the rights of children to access education and other social needs that children have (International Labour Office, 33). In that regard, by these countries hiring children into their labour force they are not only violating the provisions on labour as stipulated by the International Labour Organization, but also the rights of these children as provided for by the United Nations Centre for Human Rights and the Convention on Child Rights (Oelz & Muller, 25). With child labour, it is imperative that the World Trade Organization conducts investigations in the conduct of these countries, and in particular the industries that thrive on child labour. In order to prevent such practice, the World Trade Organization should ban all products that have been produced by child labour from trading in the international market. This will go a long way to prevent such acts from happening, as countries that engage children in cheap labour will miss international trade due to imposed sanctions (WTO, 5). Child labour tilts the scales in the favour of these countries because they do not incur production costs as high as the countries in which labour laws are observed. The issue is not production being cheap; rather these countries employ unorthodox methods to cut down on production costs. Secondly, countries that do not have their own labour standardization regulations exploit workers by paying them wages way below the minimum wage. This means that these workers are not paid, as they should be by their employers. This is an unfair practice concerning the provisions of the International Labour Organization, which has set the minimum amount of money that can be paid to a worker in salaries and wages, and countries are expected to comply with the set regulations. By paying workers salaries below the stipulated amounts, these countries grant themselves the advantage of cheap labour. They put the other countries, which pay their employees above the minimum set salaries and wages with respect to the provisions of the International Labour Organization at a disadvantage, since they incur more costs in production that the countries that do not enforce labour laws (Mosley, 1). These countries that pay their workers less than stipulated by the International Labour organization end up charging better prices that those countries that comply with these laws. In this event, the countries that comply with the international labour regulations will be competing against countries that use unfair methods to gain an advantage in trade (WTO, 8). It would therefore be prudent to have laws in place to regulate the issue of cheap labour addressed in these countries, as the international community would not have to miss making profit margins in international trade due to countries that are non- compliant to the provisions of the International Labour organization provisions. Third, the countries that do not enforce labour standards do not allow their workers to form unions. In this regard, these workers have to work at the discretion on the employer, working without complaining of harsh labour conditions at their places of work (Oelz & Muller, 44). Because of these workers being voiceless, they cannot ask for an improvement of their terms of service. This is in contravention to the provisions of the World Trade Organization and the International Labour Organization. It is imprudent for these countries to have in place international trade laws yet they do not have in place provisions to protect labourers in their industries. By these countries denying their workers their right to associate and form unions to represent them in negotiations for salaries and wages, these countries are in gross violation of human rights that grant al people the right to form associations and unions in the case of workers. Another common trait of countries that do not have standardization for the workers in their industries is that they participate in forced labour. Forced labour is a scenario where people are forced to engage in work against their will. One form of forced labour is slavery. By these countries engaging in forced labour, they deny people their basic right to choose their way of earning a living. It is a common occurrence that in scenarios with forced labour, the employees are seldom paid at all, and in any case, they receive wages it is just enough to get them through the moment. In this regard, the countries participating in forced labour do not incur much costs of production. This is different from the case in countries that have standardized labour laws which pay salaries to their employees and allow them to have jobs whenever they can (WTO, 12). In the event that an employee wants to quit their job because they are either displeased with the working conditions or because they voluntarily d not want to work anymore they reserve the right to quit their jobs. This is different from countries that take part in forced labour. These countries also force the prisoners in their correctional systems to engage in production of products that are then traded in the international market. This is in contravention of the universal human rights as provided for by the United Nations Commission on Human Rights (Mosley, 1). It is impossible to have fairness in international trade when two countries in the settings just described have to compete in the same markets. The country with low production costs because of having workers work without pay will most likely set low costs for their products in the international market. This will give them an unfair advantage in comparison with the countries which observe standardized labour laws. The international community through the International bodies such as the United Nations vouch for the protection of workers from discrimination at their places of work. In this view, workers ought o be given value for what they work for in all fairness. It is against the rights of labourers to discriminate against any of them for any reason that is not warranted. The most prudent practice is to pay employees fairly for work done. The international labour laws provide for the right to fair remuneration. However, countries that do not have labour laws in place do not take it upon themselves to protect their workers against unfair compensation by employers. Discrimination is rife in these countries, especially against the disabled and women (WTO, 21). In most cases where the marginalized groups are employed, they are maltreated at work and given very little pay. Because their pay is very little yet they have to stay in employment, workers in these countries have to continue depending on their employers for a job so that they and their dependants can have food to eat. By discriminating against workers of any group, these countries are involved in the violation of human rights. They are involved in unfair trade practices in the international market and these institutions that either promote such discrimination or do not do enough to mitigate such acts either blacklisted from international trade or sanctions taken as to their trading practices in the global market (Oelz & Muller, 2012). The international organizations such as the World Trade Organization and the International Labour Organization have not done sufficiently enough to prevent such actions that border on gross violation of human rights from taking place. In fact, the World Trade Organization has had to defend itself in recent history from accusations of being complacent in the protection of developed countries from the illegal actions of the developing countries, which in most cases do not do enough to prevent cases of human rights abuses within their borders. They do this because they gain a comparative advantage over their competition because they have cheap labour that is ill-achieved. Numerous organizations have criticized the World trade Organization for not speaking out against such practices. In such regard, these countries continue with their gross violation of the rights of workers in order to maximize the profits that those governments make from the export of such products. This has even led the United Nations to question the manner in which the World Trade Organization is handling things. First, the World Trade Organization has been criticized for not addressing the impact that free trade has on the rights of labourers. They totally disregard of the fact that the countries that have labour rights in place find themselves facing undue disadvantage in the international markets arising from the countries which do not enforce such laws being out of order by repeatedly violating the internationally agreed upon labour conventions. It is an open fact that some countries have already began to feel that free trade faces mitigating effects from labour standards, and some are asking for the scrapping if labour laws. One such country is Mexico. Another criticism of the World Trade Organization stems from the fact that those organization has not done anything to check balances that give countries whose only competitive advantage is the fact that they have cheap labour an edge over the countries that apply the international labour laws in their industries. The World Trade organization has been battling accusations of blocking potential solutions to human rights abuses along with the rights of labourers by giving a ruling that it is not legal for any government to go ahead and ban a product on the basis of the way in which they have been produced (Oelz & Muller, 56). This is a grave accusation, considering that the World Trade Organization is expected to be at the forefront of protecting all labourers in conjunction with the International Labour Organization in order to promote healthy trade practices across the world. The World Trade Organization has come out strongly t dispel these accusations, but they still have not put in steps to mitigate the consequences that come with such unfair trade practices. Instead, the World Trade Organization has accused the developing countries of resisting the implementation of international labour laws within their borders. They give excuses that by being asked to implement international labour laws, there is a scheme for developed countries to protect themselves by forming a smokescreen under which they can actively participate in the undermining of the comparative advantage that they enjoy, especially concerning lower wages (International Labour Office, 75). The World Trade Organization has also faulted the developing countries for arguing that the improvement of labour terms come as a result of the improvement in the economic conditions of a country and as such they should not be forced to improve terms of employment for their workers yet their economies still suffer from poor performance. They argued that their economies were not as established as those of other counties that had implemented the international labour laws. This argument was placed as a warning against sanctions that developing countries were threatened with, stating further that if those sanctions were put in place, it would only serve to make the situation worse for their countries, and by extension the workers in their industries (WTO, 33). In this regard, it would be retrogressive to impose such sanctions. Developing countries and other countries that are reluctant to implement the international labour laws contribute greatly to the unfair trade practice that is seen in the world today by virtue of their non-conformity to the provisions of international law regarding the rights of labourers. Instead of threatening the developing countries with sanctions, it is advisable that the developed countries set up industries in the developing countries and offer better working conditions to improve the labour standards in those countries. This would be more progressive in contrast to the imposition of sanctions to these countries, making the poor labourers suffer more, with less money in the economy (WTO, 35). Another way in which this situation can be alleviated is the assistance of the less developed countries to invest in labour intensive production. This would reduce the cost of production for their industries, by extension increasing wages and so improving the welfare of the workers within their borders (Oelz & Muller, 112). The international community should also engage the government in training seminars in order to teach senior government employees and policy makers the importance of having a well-paid labour force, and the benefits that it holds for the country. This way, there will be a sign of improvement in the welfare of workers in these countries.. The imposition of sanctions has been opposed in very strongly. Many people have come forth and pointed out the history of countries such as the United States, which itself has a history of implementing protectionist policies with the goal of sheltering the domestic industry. This case is not unique to the United States alone. Even the other countries that are now regarded as ‘developed’ such as Germany, the United Kingdom and France. All these countries had at one point adopted measures such as putting in place protectionist policies. The developing countries then wonder loudly why they are under pressure to remove their laws the unfair practices such as the subsidy of exports and the imposition of tariffs on imports to the economy. Some analysts base their criticism of these so called ‘developed countries’ on the fact that they were trying to impose sanctions on the less developed countries yet they had rejected the same policies. This points to a scenario where it appears that these developed countries do not apply international laws in their countries now want the same laws imposed on other countries. In this regard, developing countries have rejected attempts to have them enter into trade agreements with other countries. There have been arguments for the imposition of free trade among all member countries taking part in international trade. These have been increasingly believed to be of benefit especially to the developing countries. To begin with, markets get liberalized from the interference of government. This is important because the government does not have a direct contribution to the prevailing prices in the economy due to actions such as subsidies or even tariffs. The involvement of government in the setting of prices may lead to market failure arising from forced priced that have been set without due regard to the natural forces of demand and supply, which work together to determine the prices of goods and services in the economy. Another reason why it is important for developing countries to join trade agreements is because they have new markets to which they can take their products. The widened market has the advantage of improving the sales figures for their exports, especially to other countries that do not have the comparative advantage that the developing countries have. An increased market base provides mmore prospective areas of investment and can be essential in cases where the country will have to increase its production capacity in order to be able to satisfy demand sufficiently. The benefits to joining in with other countries to form a trade agreement is that this allows for the free flow of labour among the countries. This means that the citizens of one country can visit another country to take advantage of the employment opportunities therein. They can then be encouraged to invest this money that they earn outside the country back in their native country, contributing significantly to the growth of the economy. Further, the joining of a free trade agreement would benefit a developing country by ensuring that the products that they export to member countries do not get any barriers in terms of policy. Taxes are also reduced across the member countries of the free trade agreement, this being an incentive for increased trade among the member countries. Finally, there is free flow of capital among these trading countries. For instance, business people will be able to transfer their assets across the partnering states without the pressure of having his assets lose value. This is made possible by the agreement stipulating fair terms for member countries in the trade agreement. Works Cited Decent work for domestic workers: fourth item on the agenda. Geneva: ILO, 2011. Print.” This source was important in the explanation of the rights of workers in member countries as written by the International Labour Organization. The understanding of the rights of workers was an important component of creating a knowledge base on how these rights are abused in countries without labour laws. "Free Trade Agreements and Labour Rights." Free Trade Agreements and Labour Rights. N.p., n.d. Web. 2 May 2014. . The purpose for using this source was to get information on the relationship that exists between the Free Trade Agreements and the rights of laborers. This would be important in understanding the effects of abusing these rights on trade in the international market. "International Trade and Labor Standards: A Proposal for Linkage." International Trade and Labor Standards. N.p., n.d. Web. 2 May 2014. . This source helped by providing the rules of international trade, with particular emphasis on countries that have not adopted the international labor laws. This would be important in the understanding the labor standards as set by the WTO and the ILO. Mosley, Layna. "Free Trade Can Lift Labor Standards Abroad." The New York Times. The New York Times, 27 Oct. 2011. Web. 2 May 2014. . This article by Mosley was particularly important in shedding light on the benefits that Free Trade can have on the standards of labor in other countries. The article offered a current approach to international trade, and related the two matters of free trade and labor standards. Oelz, Martin, and Angelika Muller. Effective protection for domestic workers a guide to designing labour laws. Geneva: ILO, 2012. Print. Martin and Muller wrote this book to provide information on the way workers’ rights all over the world can be protected. This information was essential in clarifying the roles of the employers in the protection of the rights of their employees. Office, International Labour. The Cost of Coercion Global Report Under the Follow-Up to the ILO Declaration on Fundamental Principles and Rights at Work, 2009.. Geneva: International Labour Office, 2009. Print. This book published by the International Labor Office provided statistics to the figures on coerced labor around the world. The statistics in this book led to the creation of the assumption that forced labor contributes to unfair competition in the international market. The end of child labour: within reach : global report under the follow-up to the ILO Declaration on Fundamental Principles and Rights at Work : International Labour Conference, 95th Session, 2006, report I(B).. Geneva: International Labour Office, 2006. Print. This publication by the International Organization spelled out the measures being taken to ensure that child labor is eradicated in all countries. This book spelled out a masterplan that would be followed as a guide in the fight against child labor "The text of the Declaration and its follow-up." The text of the Declaration and its follow-up. N.p., n.d. Web. 2 May 2014. . This publication of the International Labor Office was essential in showing the progress being made in regard to protection of the rights of workers. The International Labor Organization has been tracking the progress being made with relation to coerced labor. "WORLD TRADE ORGANIZATION." WTO. N.p., n.d. Web. 2 May 2014. . "Workers Rights: Labor standards and global trade." The Brookings Institution. N.p., n.d. Web. 2 May 2014. . This article was referred to in order to better understand the position of the World Trade Organization in regard to the countries that gain a comparative advantage in international trade due to the cheap labour in their countries. Further, this reference was essential in depicting that workers’ rights have a direct relationship with the products in the market and so all countries have to engage in fair business practices by engaging fairness in labor. Read More