Financial Times FT.com

Why a ‘grand deal’ on labour could end trade talks

By Theodore Moran and Gary Hufbauer

Published: March 12 2007 18:49 | Last updated: March 12 2007 18:49

US congressional Democrats, led by Sandy Levin and Barney Frank, are insisting that core labour standards promoted by the United Nations’ International Labour Organisation be included in forthcoming trade agreements as part of a “grand bargain”. They want to make ratification of free trade agreements (with Panama, Peru and Colombia) – and renewal of President George W. Bush’s fast-track trade negotiating authority to conclude the Doha round – conditional on the inclusion of enforceable ILO standards.

An inconvenient truth poses a huge obstacle to the proposed “bargain”: US labour laws are either openly inconsistent with core ILO standards, or they could be challenged by lawyers if ILO standards trumped established statutes and long-standing interpretations. A trade agreement that enthroned ILO standards would not only alter federal labour law, it would also override state laws – triggering a constitutional howl from Sacramento to Albany. The practical effect would be to stop US trade negotiations. Few legislators would want to subordinate huge swaths of labour law to broad principles enunciated in trade agreements.

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