The Hindu Business Line : Trade with the US

Angered by opposition to the nuclear deal, the US may tread a familiar track to show its displeasure — banning goods produced from child labour and forced labour, which could hit Indian exports.

G. Srinivasan

If strident opposition to operationalisation of the nuclear deal with the US, by India, is bothering the world’s trade major, it is beginning to flex its muscles in areas that might directly impinge on India’s larger exports.

Indication to this effect was signalled early this month when the US Department of Labour issued a public notice, eliciting comments on ‘procedural guidelines’ for the development of a public list of goods from countries that employ child and forced labour in contravention of global labour standards.

A lot at stake

Confirming this, the Minister of State for Commerce, Mr Jairam Ramesh, said on Wednesday in Varanasi, while inaugurating the Third India Carpet Expo, that there is every possibility that the US Government is moving once again to publicly list handmade carpets as products of child labour. At stake are India’s handicraft exports of all varieties, which were around $800 million in 2006-07, with the US alone accounting for 50 per cent.

While Mr Ramesh’s concern centres around handicrafts, in other export items such as garments, sports goods, and gems and jewellery too, the employment of labour below legal working age, both overt and covert, cannot be ignored.

Though India has passed legislation banning child labour, the onus is on the Central and State governments to verify and monitor programmes to ensure that anti-child labour laws are implemented in letter and spirit. That is why Mr Ramesh has called upon the Carpet Export Promotion Council to execute an independent social audit every year to convince NGOs that the incidence of child labour has indeed come down markedly over the past two decades.

Insufficient homework

Even as Mr Ramesh reveals that a joint initiative is being launched by the Union Ministries of Commerce, Labour and Women and Child Development, where there is a strong public perception of the use of child labour, the fact remains that the authorities ought to have done sufficient homework to disabuse the overseas experts and authorities of their perception of India on this score.

Mr Ramesh recalls that a decade ago, there was a similar bid by the US to ban exports of handmade carpets from India on the child labour issue. But the combined efforts of the government and industry proved successful in ensuring that this ban did not materialise.

Indian exporters today are able to give their buyers the ‘Kaleen’ certificate to the effect that carpets exported do not use child labour in any way. Mr Ramesh says the greater use of Kaleen would help combat adverse propaganda against India.

On vulnerable ground

It is not only on the issue of child labour that the US has sought to penalise Indian exporters on products allegedly produced out of child labour.

In the run-up to the 1996 first WTO Ministerial, the US wanted to link trade and labour standards so that export industries that poorly paid their workers or do not maintain global standards applicable to counterparts in advanced countries would not be able to secure market access overseas. But till date this issue could not be foisted on the WTO.

However, in the light of snail’s pace of progress in Doha Round, and growing bilateralism, countries such as India might face the wrath of trade majors if it rubs them up the wrong way on other issues.

This growing realisation of the ills of bilateralism, and the lack of comfort provided by safety in numbers under multilateralism, is dawning upon relatively poor countries such as India.

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