Effect of Trade Liberalization on Child Laboure in Developing Countries Particularly in Ethiopia

1.1 Introduction

1.2 Definition

There is no universally agreed upon definition of child labor. Typically, the term child labor is used to refer to child time in activities that are somehow harmful to the child. For example, the United Nations Convention on the Rights of the Child (UN-CRC) emphasizes the importance of protecting children from: 'work that is likely to be hazardous or to interfere with the child's education, or to be harmful to the child's health or physical, mental, moral or social development.

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According to the United Nations International Children’s Emergency Fund (UNICEF), child labor is defined as “all children below 12 years of age working in any economic activities, those aged between 12 and 14 engaged in more than light work, and all children engaged in the worse forms of child labor.

Although children had been servants throughout most of human history, child labor reached new extremes during the Industrial Revolution. Marx believes that child labor was created by the industrial revolution and is still a serious problem, which attracts great attention among developing countries. Poverty and its related problems are some of the main causes of child labor in Ethiopia. Children often worked long hours in dangerous factory conditions for very little money. Children were useful as laborers because their size allowed them to move in small spaces in factories or mines where adults couldn’t fit, children were easier to manage and control and perhaps most importantly, children could be paid less than adults.

According to ILO estimations, there are around 215 million children aged 5-14 years old engaged in different economic sectors globally. Among all regions, Africa has the largest amount of child labor. A report describes child labor at the start of the 21st century as 'endlessly varied and infinitely volatile'. Drawing on recent survey data, it says an estimated 352 million children aged 5 to 17 are currently engaged in economic activity of some kind. Child labor often assumes serious proportions in commercial agriculture associated with global markets for cocoa, coffee, cotton, rubber, sisal, tea and other commodities. Studies in Brazil, Kenya and Mexico have shown that children under 15 make up between 25 and 30 per cent of the total labor force in the production of various commodities.

The 2016 Global Estimates present the scale, prevalence, and key characteristics of child labor in the world today. Child labor remains endemic and its elimination requires both economic and social reform as well as the active cooperation of all those governments, workers’ and employers’ organizations, enterprises, international organizations, and civil society at large.

Child labor is a pervasive problem in Ethiopia. A national Child Labor Survey conducted in 2001 with ILO assistance indicated that 52% of children aged 5 – 17 years were economically active (49% of those aged 5 – 14 years, or 7.4 million).

Based on International Labor Organization(ILO) investigations, child labor at least has one of the following characteristics:

  • Violates a nation’s minimum age laws;
  • Damages children’s physical or mental health
  • Prevents children from attending school;
  • Uses children and undermine labor standard

The Minimum Age Convention, 1973 (No. 138) of the ILO sets the general minimum age for admission to employment or work at 15 years (13 for light work) and the minimum age for hazardous work at 18 (16 under certain strict conditions). It provides for the possibility of initially setting the general minimum age at 14 (12 for light work).

Trade liberalization is assumed to have its own advantages and dis advantages. The arguments in favor of trade liberalization are known: it promotes the efficient allocation of resources through comparative advantage, increase economic growth or reduces poverty, allows the dissemination of knowledge and technological progress, and encourages competition. Proponents’ of trade liberalization on the other hand says it is likely to have a major impact on the lives of poor children and their families or it can pose a threat to developing nation’s economies because they are forced to compete in the same market as stronger economies. For a time being it seems to bring economic development but, the effects of trade liberalization occur gradually over time.

Trade liberalization reduces school attendance in the short run; it will also have long term implications for the intergenerational transmission of poverty.

Some arguers argue that, low labor standards allow developing countries to exploit their comparative advantages. This in turn would help them to compete in the international market and eradicate poverty.

According to international research project conducted by Young Lives project, Trade liberalization changes the relative profitability of economic activities, so some groups within a society may benefit while others lose. This means it increases income disparity between the rich and the poor which can result the exploitation of children of the poor. The research project conducted a study in developing countries, like Peru and its finding reveals that trade liberalization has negative impact on children’s education and increases child labor.

In 1990 Peru undertook a drastic programme of macroeconomic adjustment /FTA with USA and structural reforms designed to overcome serious problems of hyper‑inflation and stagnation. The Structural reforms were aimed at trade liberalization, enhancing competition in domestic products and factor markets and drastic reduction of state participation in the market economy.

The research conducted by the young lives in Peru, clearly shows that children are indeed susceptible to the negative effects of trade liberalization and that they belong, in general, to the same types of vulnerable groups identified in many other development and poverty contexts. The poor, marginalized, and disempowered households are least likely to participate in or benefit from trade liberalization policies targeting economic growth, so the children of the poor are the most at risk from negative effects of trade liberalization.

Developed countries argue that this problem might be alleviated through the incorporation of core labor standards to WTO. Because the WTO rules and disciplines would provide a powerful incentive for member nations to improve workplace conditions. Labor standards encourage states to compete through skills, development and productivity, rather than through low wages if so it amounts unfair competition of trade. So labor issues must be incorporated to WTO. If it is seen from economic point of view the low wages and labor standards in developing countries threatens the living standard of workers in developed countries and from moral point of view the low wages and labor standards violates the human right of workers or children in developing countries.

Most developing countries on the other hand argue that, the introduction of these standards in trade agreements would be counter-productive. Indeed, such an institutional innovation would impede imports from countries having a comparative advantage and, consequently, would slow down economic growth.

Many of their officials believe the campaign to bring labor issues into the WTO are actually a bid by industrial nations to undermine the comparative advantage of lower wage trading partners. The issue is not a matter of choosing the best working condition but a matter of survival. So if core labor standard becomes included to WTO it could be allowing poverty to perpetuate and the developed are going to use it as protectionism. So what we can understand from this is that developing countries are eager to exploit children.

1.2 Statement of the study

As we can understand from different literatures child labor is a widely spread and still unresolved problem all over the world, especially in developing countries like Ethiopia. In almost all studies we found that the main cause to child labor is poverty. Although the proponents of trade liberalization argue, that it promotes efficient allocation of resources through comparative advantage, increase economic growth or reduces poverty, allows the dissemination of knowledge, technological progress and improve the life standard of the people. They argues that trade liberalization comes with good opportunities like introduction/transfer of technologies that could replace child labor and modify the living standard of the poor people.

But the opponents of trade liberalization on the other hand argue, it increases income disparity within members of society, allow intergenerational transmission of poverty and worsen the living standard of the people in developing countries, especially children by exploiting their labor with very low employment standards as a result of high degree of competition they face.

Most developed countries recommend that the inclusion of core labor standards to WTO rules and disciplines would provide a powerful incentive for member nations to improve workplace conditions and minimize the problem of child labor. Labor standards encourage states to compete through skills, development and productivity, rather than through low wages.

But almost all developing countries say that bringing labor issues into the WTO are actually a bid by industrial nations to undermine the comparative advantage of lower wage trading partners. Their fear seems that better core labor standards would negatively affect either their competitive position or economic performance in world markets because they would be prohibited not to use child labor.

Though Ethiopia is not a member of WTO at this time, but it is on the way to accede. So the researcher is interested to conduct a study in this area, yet the problem of child labor is preexisted in Ethiopia, the researcher thinks after accession it could be aggravated or children in Ethiopia could be faced to more child labor exploitation because of the trade openness.

1.4 Scope of the study

The researcher will conduct the study by analyzing international instruments related to child labor and trade liberalization. The scope of the study will be limited to the effect of trade liberalization on child labor in developing countries i.e Peru and Ethiopia.

1.5 Objective of the study

The study will have both general and specific objectives:

1.5.1 General objective

  • The paper will try to determine whether trade liberalization causes greater child labor in the case of developing countries or not.

1.5.2 Specific objective

  • To assess whether Ethiopia’s acceding to WTO could aggravate its child labor or not.
  • To assess whether the application of core labor standards/prohibition of using child labor on developing countries really causes them to remain under continuous poverty or not.

1.6 Research questions

1.6.1 General research question

  • Does trade liberalization cause greater child labor in developing countries?

1.6.2 Specific research question

  • What could be the implication of Ethiopia’s acceding to WTO on the labor of its children?
  • Could the observance of core labor standards really make developing countries to remain under poverty?

1.7 Significance of the study

The relation between trade liberalization and child labor in developing countries like Ethiopia is the area which needs special attention .The researcher thinks this study will have a contribution to fill the gap in the academic atmosphere and also will have an importance for other researchers to use it as a starting point in order to conduct further study in this area. Furthermore stakeholders could find some guidelines in drafting policies. Policy drafters and law makers could give special attention to take into consideration this problem in order to minimize the effect of trade liberalization on children who are one of the vulnerable groups in Ethiopia. So Ethiopia is expected to have strong laws in relation to the problem in advance.

1.8 Research methodology and sources of information

The research will be doctrinal and the method to be used is qualitative. The methodology to be employed is explanatory through analysis of international instruments, different literatures that are related to the issue in question specifically. The researcher will apply explanatory methodology of research because this will allow examining how and the reason why trade liberalization could be a cause to child labor in developing member countries particularly in Ethiopia and researches done in other countries will be taken as experience. Therefore the researcher chooses to use this methodology in order to clearly show the relationship/cause and effect between trade liberalization and child labor.

As a source of information the researcher will use different researches conducted in this area as an input and refer articles, websites, literatures and books which are secondary data sources. International instruments like the 1994 of the Marrakesh agreement of WTO and international labor laws will be explored.

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