But the Pittsburgh declaration goes further and urges the G20 countries not to ‘disregard or weaken internationally recognised labour standards’ and to ‘implement policies consistent with ILO fundamental principles and rights at work’.

Led by their federation, the American Federation of Labor and Congress of Industrial Organizations (AFL-CIO), the US labour unions have had a long history of pushing for a ‘social clause’ into trade treaties at every forum. For international economists familiar with this history and the stranglehold the unions exercise on the Democratic Party and Congress today, the G20 declaration constitutes a carefully designed trap. It is drafted in a way in which the US and the European Union can get developing country employment and labour ministers, unfamiliar with the agenda and influence of developed country unions, to endorse measures that have a ‘feel good’ façade but are, in fact, a protectionist dagger aimed at our jugulars. Indeed, the US undersecretary of labour, Sandra Polanski, who has been put in charge of the meeting, is well known to us as a long-standing proponent of such measures and a relentless activist on their behalf.

When the unions in the US and the EU insist on a set of labour standards in the developing countries with which they compete for markets at home and abroad, they take an altruistic line: we are doing this out of solidarity; we are doing it for your workers. But when you push them hard, they always say: it is ‘unfair’ to have to compete with others who do not have our standards. Now, the latter is an argument about competition; it is about losing out in trade. So it is an argument motivated by self-interest, not altruism.

The traditional demand by the American unions has been that others should have the same standards as the US does. But this argument is comic, were it not tragic. Is the US a paragon of virtue on labour standards? After all, less than 10 per cent of its private workforce is now unionised. And this is because the main weapon that unions have, the right to strike, has been crippled by the Taft-Hartley legislation of over 50 years ago. Even liberal universities have refused to let their administrative employees organise. In consequence, Human Rights Watch, which has investigated the right to unionise, a central feature of the ILO principles, has found that this is far from being guaranteed in the US.

So, US unions have shifted to asking for ILO ‘core standards’ instead. But this will not wash either. The US has not even ratified many of these core conventions. So, in effect, this version is also to be aimed at others, not themselves.

The truth of the matter is that, frightened by competition from our exports, the American and European unions seek relief. This can be obtained by conventional import protectionism. But, if this is constrained by WTO obligations, then it can be obtained by raising the cost of production of the foreign rivals. Raising their labour obligations is one way of doing this. Therefore, we have called it a form of ‘export protectionism’, like the Voluntary Export Restraints, where the exporting country restrains its exports.

An alert must therefore be sounded and the matter discussed at the highest levels of the Indian government, with the labour minister fully briefed by trade experts and officials on the traps that await him at the impending meeting. We can also be sure that the US delegation will be assisted by Washington think-tank proponents of such protectionist proposals, many of them from the Carnegie Endowment (where Polanski sat during the Bush years), the Petersen Institute for International Economics (which has had a history of advocating trade-labour link), and the Centre for Global Development (which is captive to the protectionist notion of fair trade extending to labour standards in trade). Our best trade experts can effectively counter their arguments if only we use them.

But it is not enough to push back on proposals, which will harm us and the developing countries, more generally. India needs to be proactive and offer its own resolution that explicitly discourages the insertion of labour clauses into trade treaties and institutions. The intellectual argument is on our side on this issue. We should not be content to act as if we can eat at the banquet but have no say in the choice of the menu.

This essay was first published here in the Times of India on 23 February 2010.

Jagdish Bhagwati is University Professor at the School of International and Public Affairs at Columbia University and Arvind Panagariya is Bhagwati Professor of Economics at Columbia University.