This report, commissioned by Save the Children, Norway, discusses the main economic arguments for and against the incorporation of a social clause in World Trade Organization (WTO). Part one presents a historical review of how the question has been addressed in ILO and WTO, and the positions of the main actors involved are stated. ILO is generally disinclined to imposing trade sanctions against countries not fulfilling their obligations in terms of ILO regulations, and the ILO Convention 138 on Minimum Age is not included in ILO's core labour standards. The second part of the report analyses the main arguments in favour of including a social clause in WTO. It is argued that international coordination of labour standards, in contrast to their harmonisation, may improve welfare in developing countries. However, trade sanctions against countries violating the rules will probably not be credible since such sanctions would most likely damage the target group as well as the legitimacy of WTO. Without the credible enforcement of the rules, a social clause would most likely be merely symbolic. The report argues that it would probably be more efficient to strengthen ILO. The report is available in Norwegian only.
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