* Sarkozy wants bigger role for social, labour standards
* Urges reform of global governance to clip WTO and IMF
By Jonathan Lynn
GENEVA, June 15 (Reuters) - French President Nicolas Sarkozy called on Monday for a reform of international regulation to strengthen the role of labour and environmental standards at the expense of bodies such as the World Trade Organisation (WTO).
Sarkozy told a global jobs summit at the International Labour Organisation (ILO) in Geneva the world could no longer be governed by the laws of supply and demand.
The G20 group of rich and emerging countries has asked the ILO to help map ways out of the economic crisis by encouraging stable employment. The United Nations agency groups governments, employers and workers to promote good working conditions.
Denouncing the growing commercialisation of all areas of human activity, Sarkozy said in his speech that France was fighting to treat health, labour, environment and trade equally.
"It will put the same energy into fighting the temptations of protectionism as defending the idea that the WTO cannot be the only one to decide everything and that each specialised institution must play its part in defining international standards and their implementation," he said.
Sarkozy said the International Monetary Fund, World Health Organisation and ILO needed more powers to enforce standards, as would a future World Environment Organisation he expects to be created at December's climate change conference in Copenhagen.
At the same time, the IMF, World Bank and development banks should take social and environmental factors into account in their lending, and refrain from imposing adjustment plans with disastrous social and human consequences, he said.
The idea would be for specialised international institutions to intervene in disputes, especially concerning trade, when their areas of expertise are affected.
He said trade law and commercial arbitrators would no longer have the final say, but the ILO would be brought into international disputes when labour standards were affected, or the IMF would be consulted if there was a question of "monetary dumping" -- a reference to manipulated currencies.
"Let us build together this new global governance so that the ILO can have its say at the WTO, the IMF and the World Bank as soon as the basic standards it is charged with seeing respected are at issue," he said.
"The international community cannot be schizophrenic and ignore at the WTO or the Bretton Woods institutions what it promotes at the ILO."
Sarkozy garnered warm applause from the ILO conference, with worker representatives welcoming his criticisms of unregulated globalisation, "social dumping" and calls for greater respect of labour norms and conventions.
His recommendation international lenders pay more attention to social factors when helping developing countries would have also resonated with poor countries.
Sarkozy said he did not want to impose the standards of the richest countries on the poorest but create a system of rules that raises everyone.
Still, it is difficult to see developing countries welcoming his call for a bigger role for labour and environmental standards in trade, as many see such arguments as an attempt by rich countries to erase the comparative advantage in labour costs enjoyed by poor and emerging nations. (Editing by Sophie Hares)