XN000022-1995-04-25 — Page 9

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Warning against linking labour standards with trade

Deputy Director-General of Trade, Mr Thomas Yiu, today (Tuesday) warned against harmonising labour standards among trading economies through trade measures and other artificial means.

He pointed out that it was precisely because of the differences in factors of production that trade among economies was meaningful and that trade was mutually beneficial.

"Any artificial attempt to equalise such factors including labour will only be counter-productive and disrupt international trade," he cautioned.

Mr Yiu was speaking as head of a Hong Kong delegation at the 51st plenary session of the United Nations' Economic and Social Commission for Asia and the Pacific (ESCAP) being held from April 24 to May 1 in Bangkok.

He noted that in the past few years some people had been advocating the promotion of social progress by the harmonisation of a set of labour standards. They believed the world trade arena should be a level playing field, and differences in labour conditions among trading nations give unfair advantage to some when they trade with others.

Mr Yiu pointed out unequivocally that these beliefs were based on fallacious conceptions.

"To start with, it cannot be more wrong for us to go after a mechanical interpretation of a level playing field," he said.

"The very reason why there is international trade is because we are in a playing field in which the trading economies are not all level in all aspects. In other words, there is comparative advantage."

Mr Yiu said the playing field of international trade need not be flat, but it should be fair in the sense that, like all playing fields, it should be governed by rules.

"The present playing field of trade is built essentially on the basis of the General Agreement on Tariffs and Trade and currently the World Trade Organisation," he said.