OECD Ministerial Meeting Brings Emphasis to Labor Rights and Non-Market Economy Issues

On October 6, the OECD Ministers issued the 2021 Ministerial Council statement at the Ministerial Council Meeting (MCM). This years’ MCM had a theme of “Shared Values: Building a Green and Inclusive Future”. Not surprisingly, the statement emphasized “shared values” which would shape the way new challenges are addressed. It also mentioned technology standards, forced labor, and non-market economies. Although the statement does not mention China by name, these issues have been sources of friction between China and some countries. China is not an OECD member, but it is a “key partner” and an observer of the OECD.

With regard to shared values, the statement noted:

The strength of the OECD lies in our shared values. Since its founding sixty years ago, the OECD has grown into a community of 38 like-minded democracies committed to market-based economic principles; an open, free, fair, and rules-based multilateral trading system; transparency and accountability of governments; the rule of law; gender equality; the protection of human rights; and the promotion of environmental sustainability. The Council, meeting at the ministerial level, adopts the OECD’s 60th Anniversary Vision Statement as an expression of these shared values and adopts the Global Relations Strategy to guide our external engagements, promoting adherence to OECD standards and good practices. In considering enlargement of the Organisation, we commit to preserving its like-minded nature, and Members will be guided by the high standards of our shared values when deciding whether to open accession discussions.

Regarding technology standards, it stated:

We recognise the need to develop and strengthen standards for new and emerging technologies that reflect our shared values and keep pace with innovations reshaping our economies and societies. We commit to working together to advance an inclusive digital economy including through implementation of the OECD AI Principles and promoting data free flow with trust and the possible development of high-level principles for trusted government access to personal data.

China has stepped up its involvement in international standard setting in recent years, according to a report from the US-China Business Council, which has become one of the areas of competition between the United States and China.

With respect to labor standards and labor rights, the statement said:

We reaffirm our commitment to uphold international labour standards and strongly condemn the use of forced and child labour. ... We will work to strengthen the rules-based multilateral trading system with the WTO at its centre, to oppose economic coercion, and to level the global playing field through increased competition, better integration of SMEs to global value chains, and the dismantlement of unnecessary barriers to international trade. ... We will step up our efforts to combat global illicit trade and, in line with relevant OECD standards, to ensure responsible business conduct and due diligence by businesses regarding human rights and international labour standards.”

Human rights are another point of tension between China and its western trading partners. The United States, European Union, Canada, and some others have imposed sanctions on Chinese officials and companies (here, here, and here for examples in the United States, and there are more discussions in others) for their involvement in human rights violations and forced labor, which has led to some Chinese retaliation.  These sanctions have a chilling effect on both trade and trade relationships between China and these trading partners.

The statement also mentioned “non-market economies” as one of the shared challenges the group faces:

We appreciate the OECD Secretariat’s dedication throughout the pandemic to maintain the Organisation as a centre for data analysis, best practice policy advice, and a platform for multilateral discussion and collaboration with the G7, G20, APEC, and other international fora to address shared challenges, including those posed by non-market economies.

United States Trade Representative Katherine Tai also discussed “challenges posed to the international trading system by non-market economies” at the MCM, according to a USTR readout. During her meeting with France’s Minister of Economy, Finance and Recovery Bruno Le Maire, a USTR readout noted that “Ambassador Tai and Minister Le Maire also discussed ongoing non-market economic and trade challenges posed by China, which prevent American and French businesses from fairly competing in the global marketplace.” In a separate meeting with Canada’s Minister for Small Business, Export Promotion, and International Trade, Mary Ng, the United States and Canada also discussed the importance of the multilateral trading system, areas of potential cooperation for a successful MC12, and “the need for action to combat the challenges posed by non-market economies,” according to a USTR readout.

Non-market economies were one of the main topics discussed at the first meeting of the US-EU Trade and Technology Council. At the meeting, the two sides laid out details on shared goals, covered practices, and their current plans. China, the largest non-market economy in the world, has been the main subject of these discussions.