USA Balance of payments with trading partners

Analyze the international trade scenario of the past ten years. Find out
where the interests of trade have had conflicts with social goals,
political goals, human rights goals, and economic goals of a country,
region or people in general.

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Solution

The Indian carpet industry, with a large and lucrative overseas market.
It is export oriented with the largest importers being Germany and the
USA followed by Switzerland, United Kingdom, Australia and Canada. India
offers a wide range of floor coverings that have evolved over the
centuries to suit a variety of tastes, climates and budgets. The woolen
and silk carpets are more renowned compared to the other materials such
as cotton and several vegetable fibers, which are used for making
attractive and practically useful mats and durries

The export of carpets and rugs has risen to Rs. 1,000 crores annually.
India has emerged as major producers of hand knotted carpets. A very
important role is being played by the Handicrafts and Handlooms Export
Corporation of India (HHEC). It plans to raise the revenues earned from
export of Indian carpets from Rs 1000 crores to Rs 2,000 crores in the
next to or three years. (Crore is currency denomination used in
India.One crore is equivalent to $ 10 million).Handicrafts and carpet
exports form a large chunk of India export and are a major source of
revenue earnings for the country.

The carpet industry is very complex, but is generally controlled by the
export companies. These exporters arrange, either directly or through
contractors, for a carpet to be produced on a particular loom. The
looms are normally owned by small entrepreneurs and range from single
looms in private houses to small factories with 30 or more looms. The
exporter supplies the wool and design and after a price and quality is
agreed, the loom owner is responsible for producing the carpet to
specification. Agents for the loom masters and owners find their
workforce from a variety of sources. Most of the employees are children.
The children may be their own children and other children from within
the village. These remain in their own family.

The child labor may also be obtained from other areas (normally poorer
regions) by purchasing or coercing children from Bihar in north-east
India to Uttar Pradesh; or from small villages in Nepal to Kathmandu; or
from outlying villages to small towns in Pakistan; and even children
trafficked from other countries, such as children imported from west
Nepal to Uttar Pradesh. Removed from their families, these are, without
doubt, the worst sufferers.

All the children work long hours for very little pay. Indeed, in many
cases, particularly when they live at the looms, their wages are reduced
to pay for food and lodging, or they may receive no pay whatsoever, for
example, where the loom owner applies their wages to cover the advances
given to their parents and the agents who brought them in the first
place. This is a form of debt bondage (which is defined as a
slavery-like institution by Article 1(a) of Article 7(a) of the
Supplementary Convention on the Abolition of Slavery, the Slave Trade
and Institutions and Practices Similar to Slavery 1956) and is quite
common in the industry throughout South Asia.

A great many of them are children who have been kidnapped by slavers
from their parents and sold to the loom master. They are locked behind
bars and beaten. They are poorly fed and receive no wages.

In the past ten years, there has been a gathering movement in India to
end the exploitation of so many children in the industry. This activity
has been supported by the Anti-Slavery Society. As a result, the UN
Working Group on Contemporary Forms of Slavery and the International
Labor Organization have called on the Union Government (i.e., the
federal government) in India and the federal government in Pakistan to
enforce their own laws and to stop the use of child labor. According to
the reports by UNICEF "children work long hours for very little pay.
Indeed, in many cases, they may receive no pay whatsoever"

The economic goal of India is to earn revenue, prosper and get counted
as a developed nation but not at the cost of sacrificing small children.
To replace children at the looms, women folk from the affected families
are being trained in the training centers set up by the Development
Commissioner (Handicrafts), Govt. of India. In consonance with the
spirit of the weaver welfare programme and its objectives carpet weavers
are given priority in the allotment of housing - cum - worksheds, life
insurance, medical facilities and other schemes.

The Carpet Export Promotion Council has sanctioned 44 Schools out of
which 20 schools are presently running through NGOs of repute while 24
Schools have already completed 3 years of NFE under the Welfare Projects
where children are provided:-

Non - formal Education (NFE)

Mid - day Meal.

Stipend to supplement the wage loss

The Government of India and the carpet industry are determined to
totally eradicate the use of child labor on priority basis and a multi -
pronged strategy has been formulated which includes stepping up of
enforcement measures and speedy implementation of welfare measures for
children weaned away from carpet industry.

From the above example, we can understand how international trade can be
in conflict with a nation's economic and human rights goals. However,
most of these barriers/conflicts to international trade can be amicably
resolved with a constructive approach of both the government and NGOs,
Human Rights and other such agencies so that the trade does not suffer
and all parties involved, be it the exporter or the weavers or the
government are suitably.

Solution by: Sachi Sarma, MFT, OTA ID#: 105014

Submitted on: May 13, 2006, 6:00 am