|Toespraak gehouden op 25 maart 1995 tijdens een seminar georganiseerd door de Indiase Ambassade in Den Haag over 'Consumer boycott versus free trade'.|
Consumer boycott versus free trade
I would like to thank you for the opportunity to present the view of the India Committee of the Netherlands on the issue of trade and labour norms. We are glad that the Embassy of India has taken the initiative to bring together in this seminar people from different backgrounds to speak on the issue.
The ICN is, together with other organizations like FNV and Novib, presently involved in two campaigns which are related to trade and labour norms. One is the promotion of Rugmark carpets, which are certified to be free of illegal child labour. The other is the Clean Clothes Campaign, which aims at the adoption by retailers of an indepedently controlled Fair Trade Charter, consisting of a number of minimum labour norms. This is the background from which I speak, but I will not elaborate on these campaigns now.
I was asked to speak on the topic of 'Consumer boycott versus free trade'.
What I would like to emphasize strongly is that socially responsible behaviour by companies, consumers and incentives for this by governments is not in contradiction to free trade. It is in fact a necessary and market-driven complement to it.
In the past trade was much more controlled by governments as part of protectionist national economic policies. The tendency towards relatively freer trade and breaking down of protectionist barriers is welcomed by us and many others. We are for example very much in favour of further lowering or - even better - abolishing European tariff barriers for products from India and other developing countries.
At the same time we feel that freer trade should be based on some minimum standards with regard to the environment and labour conditions. Like other human activities, trade - whether it is national or international - should not violate some very basic human rights
which are accepted by most countries and codified in the core conventions of the ILO.
In combining trade with social responsibility the most important instruments are not boycotts but positive affirmative action by consumers and companies, where possible supported by positive economic incentives from the governments.
Take the consumers. The qualities that well-informed consumers are expecting from products are not only product-related, but also more and more related to the labour conditions under which the product is produced as well as its environmental effects. The increasing globalization of trade also implies that consumers concerns about working conditions do not stop at national borders. But it is not primarily governments but the market which is pushing the producers to behave socially responsible, otherwise they will be out of business. Put positively: products which are e.g. certified to be produced under good social conditions will have an added value in the market.
Or take companies operating on a competitive market. These companies are increasingly aware that socially irresponsible behaviour, like buying or selling products made by exploited children or adults, can severely damage their brand or company name. Remember Shell. Even a negative reaction from 5% of the consumers to unethical practices can make companies loose out against competitors. Therefore more and more companies are now adopting their own social code of conduct on investment and trade. What is often still lacking is an independent controlling mechanism, but also this will come when consumers keep on demanding it. Again it is the market and not the government which creates the driving force towards ethical trade practices.
Also the governments have a role to play. In some extreme cases like slave labour they should ban imports. But in most cases of e.g. child labour it is much more effective to positively reinforce the actions taken by consumers, companies, other governments and NGO's. This can be done e.g. by supporting the introduction of trade marks for products made without child labour and/or other minimum labour standards. As part of their system of tariff preferences the European Union should e.g. abolish tariff barriers for products which are independently certified to be free from child labour and bonded labour.
Finally at the multilateral level a social clause should define the framework of an international social bottom-line. Not on wage level, but only on international recognized minimum labour standards. I think that a sound multilateral social clause will be beneficial for developing countries because it reduces cut-throat competition on the basis of 'social dumping'. It therefore somewhat pushes up the international market price of some products, without endangering the present competitive wage level of developing countries. This means more income for developing countries and better conditions for the workers. A multilateral social clause can keep protectionism in check, while bilateral clauses will tend to be more influenced by a country's self-interests.
I would like to summarize like this.
Thank you for your esteemed attention.
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