MUMBAI [Bombay] – The visiting US treasury secretary, Lawrence H. Summers, Monday [17th January] stated that the best way to address the issues of labour and environment must be a subject for dialogue between various countries as the world charts course for further the World Trade Organization (WTO).
Labour exploitation and environment are questions that must be up for discussions, Summers said in his address to the Confederation of Indian Industry (CII) here. The labour standards in one country could be detrimental to the interests of workers in other countries, he said.
The problem of focusing only on trade was learned within us in the late 1800s and early 1900s, as interstate commerce took off and the national economy began to come together, he said.
Over time, politicians in both major parties came to recognize that a greater degree of interconnectedness between states also called for common institutions and understandings at the national level, to offset the downward pressure on local rules and standards that competition could create, the US treasury secretary noted.
The challenge, he said, is to reconcile three widely shared objectives - realizing the benefits of trade and integration support of public purpose in areas such as promoting the environment, regulating financial risk and assuring worker and product safety, and allowing sovereign governments to make their own choices and public policies in place that will work for them.
Summers said at the global level: “Our agenda is to promote free trade, sovereignty and serious issues with respect to common problems”.
The challenge with respect to trade, environment and many other issues will be striking the right balance between all the three objectives, he said, adding that the difficulties of doing this were pointed up in the recent WTO meetings in Seattle.
Discussions of international integration used to be the preserve of the industrial countries, but with the balance of power now shifting and nearly all of the growth in the world’s labour force taking place in developing countries, it will be especially important to make these nations a larger part of the discussion.
This has been reflected in the financial sphere with the creation of the G20, in which India has an important role. India and the US, the world’s largest and oldest democracies, have an opportunity to work together to shape the terms of this new global engagement in the years ahead, he observed.
Summers said the economic developments in India has the potential to transform in two decades not only India but the world economy and the US has great stakes in what happens here.
He said the 6.5 per cent growth rate in India in recent years is impressive and felt that 10 per cent growth is well within the grasp.
