The WTO Legality of Trade-labour Sanctions in the Us GSP Programme

Abstract

GSP is a mechanism for according 'S&D' treatment to the developing countries and least developed countries in order to integrate them into the global trade market by increasing their export earnings. It finds legitimacy in the Enabling Clause to deviate from the WTO general principles of non-discrimination and reciprocity. Though the objectives of the GSP are entirely economic in nature, ironically, the programme has been twisted into an arm of promoting and disseminating internationally recognized labour rights in a third country as part of social concerns. The US GSP programme was an early adopter of labour issues and the country has already applied unilateral trade sanction for around a dozen of times to promote worker rights in the target country. This gives rise to some pressing concerns. First, does Enabling Clause permit the US to impose trade sanction to promote labour rights in a third beneficiary country? Second, whether the US can invoke defence of Article XX of GATT to justify trade-labour sanctions in its GSP programme? This paper finds that the US GSP trade-labour sanctions are neither legitimate nor legal under the WTO law.