Government to resist call for child labour sanctions

The use of trade sanctions to punish countries exploiting child, and forced, labour could backfire, Ian Lang, President of the Board of Trade, will warn today.

Mr Lang is expected to tell a meeting of the Royal Institute of International Affairs, at Chatham House, London, that Britain will "vigorously resist" any attempt to link trade liberalisation and countries' domestic labour standards at a Singapore meeting of the World Trade Organisation (WTO) in December.

He will say that any such linkage "will only serve to slow down trade liberalisation and could even make social problems in the countries concerned even worse".

Although he will argue that his view is shared by most of European industry and "most other countries around the world", it is being pushed strongly by the United States and Norway.

The European Commission has also issued a formal communication on the link - backed by a majority of the European Union's member-states - in which it urges WTO consideration.

But in a recent, unpublished Commons memorandum on that communication, trade minister Anthony Nelson said: "The communication is drafted on the false assumption that a link between trade and labour standards has already been established.

"There is no evidence to suggest that labour standards rise by restricting trade, rather the reverse."

Mr Nelson said: "The Government deplore abusive labour practices, such as the exploitation of children and forced labour."

He added that the Government took every opportunity to support international efforts to stamp out such policies. "However, the Government do not agree that WTO rules should be amended to allow countries to take trade measures against countries with low labour standards.

"The best way of helping developing countries to raise their labour standards is not by penalising them, but by encouraging their economic development and growth through open trading policies.

"The Government therefore welcome initiatives to develop the exports of these countries particularly if, at the same time, the living conditions of producers there are materially improved."

Mr Lang will say today that the benefits to Britain of the completion of the Uruguay Round in 10 years' time will be of the order of pounds 17bn, or 2 per cent of GDP. He will predict that it will be a small taster of the benefits Britain will gain from free trade by 2020.