Trade Unions, Labor Rights and the WTO
In These Times
February 3, 1997, pp. 27-28
Independent union leader Muchtar Pakpahan went on trial for subversion in Indonesia, facing a possible death sentence if convicted. But as the indictment makes clear, Pakpahan is really on trial for such crimes as advocating a higher minimum wage and trying to organize workers who produce the goods and services of the new global economy.
The day Pakpahan's trial began, the World Trade Organization, meeting in nearby Singapore, adopted its first statement of support for core worker rights, now widely defined as the right to organize and bargain collectively and as freedom from forced labor, discrimination and exploitative child lahor. The WTO did not take as strong a position as many labor advocates had hoped it would. The group's feeble final resolution asserted that increased trade and trade liberalization would in themselves promote labor rights, and declared that labor standards must not be used for protectionist ends or to question the comparative advantage of low-wage developing countries. Nonetheless, the fact that the WTO made any statement at all on worker rights was a victory for international labor.
The international labor movement insists that protection of core labor rights—which are nearly universally accepted in several U.N. declarations—must be explicitly incorporated into all of the institutions of the global economy. Explicit protections of labor rights would guarantee that workers share more equitably in any economic gains; prevent governments and businesses from seeking a competitive edge through abuse of workers; and give workers a voice in dealing with the awesome forces transforming their lives. Besides protecting workers in developing countries from exploitation, international labor standards could also help prevent erosion of rights already won by workers in advanced economies. Because governments increasingly see foreign exports as the salvation of their national economies, linking observance of labor rights to access to a liberalized global market may make governments take worker rights more seriously as well.
Formed in 1994 during the last round of negotiations of the General Agreement on Tariffs and Trade, the WTO has emerged as the chief international regulator of the global economy. Since the late '40s, GATT agreements mainly focused on reducing tariffs. But the scope of the WTO is much broader, with agreements or ongoing negotiations on such issues as intellectual property rights, investment and the environment. This expanded menu reflects the priorities of increasingly powerful transnational corporations and the richer industrial countries. It also reflects changes in the world economy: Though trade has grown rapidly in recent years, direct foreign investment has grown much faster, and sales by foreign subsidiaries—such as IBM Japan and Ford Europe—now exceed foreign trade in total value.
But so far, trade ministers have wanted to keep labor rights confined to the International Labor Organization, which has set standards and investigated abuse of worker rights since 1919 but can impose no penalties for violations. Many governments—including conservative governments in rich countries, such as Britain, as well as those in developing countries, such as Egypt, India, Pakistan, Indonesia, .Mexico and Malaysia—resisted any discussion of labor rights at the WTO's Singapore meeting. Opponents from developing countries even vetoed an address to the conference by the director general of the ILO.
The United States tried unsuccessfully to get the WTO to establish a "working party" to explore the relation of workers' rights to the emerging world economy. Such a group and deal with these standards." Even the U.S. delegation seemed to be divided on the issue. Although U.S. Trade Representative Charlene Barshefsky insisted that labor rights will continue to be discussed, some members of the delegation suggested anonymously that the Clinton administration was pushing worker rights only to pacify the AFL-CIO.
Developing countries claim that the rich countries are trying to exploit labor rights issues as a new form of protectionism, undermining their comparative advantage in glohal economic competition. These fears, however, are exaggerated. Far from advocating a global minimum wage, lahor advocates simply call for protection of core rights that give workers a chance to fight for hefter conditions. Nor is there much chance that the WTO could turn into a protectionist tool. After all, it's dominated by trade ministers enamored of free markets and effectively subject to the veto power of any member. In practice, the W'TO would likely he extremely reluctant to enforce labor rights, given that even one recaleitrant country could block any meaningful action.
Even if core labor rights were vigorously enforced and workers well organized, labor would still be much cheaper in China, Indonesia or Pakistan than in high-wage countries such as the United States. Moreover, a committee of the Organization for Economic Cooperation and Development— the club of developed countries—concluded last year that developing countries gain no competitive edge from denying workers their rights, and that enforcement of such rights "would strengthen the long-term economic performance of all countries." The study argues that enforcement of core labor rights is likely to increase the efficiency of markets. Its empirical comparisons of economic performance among nations shows few economic disadvantages—and some advantages— for countries that have improved or long supported worker rights. Unions and human rights advocates also argue that workers' rights help strengthen the world economy by more equitably distributing purchasing power, by bolstering democracy and human rights generally, and by helping to assure popular support for liberalized trade.
The major beneficiaries of well-enforced lahor rights will likely he workers and governments in developing countries, which will be better able to resist pressures from transnational companies to prohihit or weaken unions. Without such rights, workers' anger over jobs or incomes could turn into resentment of the new global economy itself. Joh insecurity is already increasingly common in newly industrialized countries: Within a decade, Hong Kong lost nearly half its factory jobs to nearby Chinese cities, and now companies are moving even further into the Chinese interior in search of ever cheaper, more docile labor. Barshefisky, as well as international labor leaders, warn that unless worker rights are addressed, there could be a growing backlash against the world trading system.
The International Confederation of Free Trade Unions with affiliated members in 136 countries has made global labor rights a top priority. During the Cold War era, the ICFTU was the major non-communist international labor federation, and Cold War politics often overshadowed its efforts to promote international labor cooperation. Long criticized as offering mostly talk, the ICFTU made a breakthrough with its campaign at the WTO. There, the ICFTU and union representatives from Canada, the United States, Europe and a few developing countries, like Brazil and South Africa, huddled regularly to exchange intelligence, develop strategy and plan lobbying. The ICFTU will try to make labor rights part of the WTO's ongoing reviews of members' trade policies. It also wants the new rules for international investment being negotiated by the OECD to include a labor-rights clause, which could serve as a model for the WTO.
The WTO currently has no provision for collective sanctions. It simply settles disputes between two countries and permits limited retaliation for unfair trade practices. Until there is forceful multilateral protection of labor rights, unilateral action, such as the European Union's recent decision to revoke trade privileges for Burma for its use of forced labor, will continue to play an important role. Many labor advocates argue that the WTO should not allow China to join until it improves its labor rights record, which includes the recent trial of two young labor activists on charges of subversive conspiracy for trying to educate workers about unions.
The OECD, for the first time, took a similar step when it asked South Korea to bolster labor rights as a condition of entry into its ranks. Korea promised to comply, then reneged, triggering nationwide strikes. The case of Korea is just one example of why, contrary to the panglossian predictions of free-market enthusiasts, free trade and economic growth do not automatically lead to labor rights and a fair distribution of income. Korea has gotten rich, but workers there still must fight for their rights. This is not only a problem of the newly industrialized countries. Labor rights won long ago are now under siege from Europe to New Zealand and the United States.
International protection of labor rights would help workers in countries at all levels of development, but it won't happen without worldwide political and economic pressure. Workers in virtually every country have had to fight hard to win rights. There is little reason to think it will be any easier on a global scale.
David Moberg is researching labor responses to the new global economy with support from the John D. and Catherine T. MacArthur Foundation.
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