mployers are compelled to treat workers decently, they will deploy them more productively. By that logic, certain labor practices common in undemocratic countries, such as child labor, prison labor, and denial of the right to form unions, can be seen as unfair trade practicesand, potentially, violations of WTO principles that trade should reflect acceptable rules of market competition. Since wages affect all traded products and services, labor issues are central to the ultimate credibility of the WTO as the arbiter of a consistent rule-based international trading system. To the extent that wages are artificially held down because labor rights are abrogated, an indirect subsidy is extracted from these workers by their governments' policies, which arguably violate the WTO's free trade philosophy. During the WTO's second-year review in late 1996 in Singapore, the United States actively sought to link labor rights with trade. However, this effort was blocked by a coalition of Third World nations (who saw the initiative as a form of protectionism) and the European Union (which was then dominated by conservative governments). Nonetheless, the attempt put the U.S. government on the side of trade-labor linkage and forced WTO members to officially consider the issue of linkage for the first time. Even Sir Leon Brittain, the Thatcherite vice-president of the EU who actively opposed trade-labor linkage, was compelled by sister EU governments to affirm that "labor standards and other apparently domestic political issues are now the legitimate concern of the WTO because they are concerns of our constituents." The United States, according to the U.S. Trade Representative's office in Geneva, will continue pushing for linkage. THE ORIGINS OF THE WTO Established in the wake of World War II, the WTO's predecessor, the General Agreement on Tariffs and Trade (GATT) formed the third pillar of the Bretton Woods system, which included economic development loa...
