Responding to Globalisation:The Role of Labour Standards, Trade Union Strategies & Capacity Building

Trade union training in ILS and the ILO Declaration on fundamental principles and rights at work and its follow-upTurin, 29 January – 23 February 2007

Kristian Weise, ITUC

Agenda

Globalisation, its challenges and trade union responses: an overview

Main issues in globalisation: trade, finance, work and development in depth

Labour standards, trade union strategies and capacity building: discussion of possibilities

What is globalisation?

Global economic integration through trade, financial flows and production systems

The consequence that all parts of the world are much more interconnected and vulnerable to developments far away from them (economic cycles and production shifts)

The consequence that all ‘markets’ have become global; both for products and for labour (doubling of the world’s labour force)

How has globalisation occurred?

Transport and communication technologies have connected the world

Political transformations – the end of the cold war, introduction of capitalism in India and China – has meant that the world has become one

Global rules, primarily in trade (GATT and WTO) and under the influence of the IMF and the World Bank has facilitated free flows of trade, investment and production

What is wrong with globalisation?

Globalisation has the potential to bring along development and poverty eradication but it is not being managed in the right way

It is the wrong global institutions that set the agenda for globalisation and they are being used in the wrong way. They are promoting the wrong policies (see map)

These institutions have 1) let workers compete internally in a negative way which decreases wages and working conditions – China as the main example, and 2) taken away the opportunity of many countries to follow employment-creating and welfare promoting policies – debt burden and structural reforms

Global Governance

WTO

World Bank

IMF

G8

and regional groupings

like

APEC

UN FamilyIncluding

ILOUNDPUNEP

UNTADetc.

The result: a crisis in the world of work

Rising unemployment High levels of under-employment and under-paid

employment Stagnating wages and diminishing share of income going

to workers Declining welfare, particularly where it is employer

provided Increasing pressure on organising and collective

bargaining Growing ’casualisation’ of work Rising informal economy Spread of Export Processing Zones

Trade union strategies

Overall, to promote the creation of Decent Work worldwide and in all institutions: ensures both the right development in rich countries and development in the poor ones

Promote the Core Labour Standards wherever possible

Enabling national affiliates to combat these things nationally and to fight for the rights and policies that will change their situation

Securing that the international political environment works towards the right priorities: Lobbying and campaigning G8, EU, US, AU, APEC etc.

Trade union strategies

Working to ensure the right architecture of global institutions and more coherence between them (UN and ILO vs. IMF, WB and WTO)

Working for pro-poor and pro-workers policies in the international institutions, primarily the WTO, the IMF and the World Bank

Ensuring better practices among multinational corporations and in Export Processing Zones

Securing a stronger, united international trade union movement

How do we implementthe strategies?

Support national centres with analysis, policy advice and campaigns

Lobby and campaign the international organisations from day to day and at special occasions

Make publications that highlight the problems, get media attention and point to political answers

Create new alliances, take advantage of mutual strengths and campaign together

Trade

International Trade

International trade: from 1% of World GDP in 1820 to 5.5% in 1950 and 17.2 % in 1998 – even more today…

From triangular patterns to global inter-connectedness

- in 1965: 59% between developed; 32 % between developed and developing; 4% between developing

- in 1995: 47% between developed; 38% between developed and developing; 14% between developing

International Trade

International Trade Agreements

Bilateral

Regional

EUMERCOSUR

ASEANAPECEtc.

Multilateral

WTO

History of the Multilateral System

Already in 1948, there was a failed attempt to create an “International Trade Organisation”.

From 1948 to 1994, the GATT (General Agreement on Tariffs and Trade) provided the rules for world trade: 8 negotiation rounds.

WTO established in 1995. Based in Geneva, small secretariat. Today: 149 countries; more than ¾ are developing countries and countries in transition to market economies.

WTO: How does it work?

Primarily a platform for negotiations – different from IMF and World Bank.

A set of agreements are at the core. They are negotiated and agreed by consensus, and provide the legal framework for global commerce.

Division of tasks: WTO Staff, General Councils and Ministerials

Alliances

Problems with the WTO

Democratic deficit even though it supposedly is one of the most democratic international organisations…

Special provisions for developing countries but advantages for large and rich countries… (market size, special negotiations, resources)

A blind fait and belief in trade: no impact assessments on development, employment or the environment

No voice for trade unions…

Trade union demands for reform

Transparent and democratic structures

Prioritising employment

Integrating labour standards

Coherence with the ILO & the UN

Transition programmes & aid

Non-interference in non-core issues

Areas of negotiation at the WTO

Agriculture

Services

Manufacturing

Agriculture What’s at stake?

- Market Acces: tariff and other barriers

- Domestic Support: subsidies and other programmes

- Export Subsidies

What are the problems?

- The agricultural sector of developing countries - the most important sector for many of them - is losing ground because of the cheap, subsidised products from developed countries

- On average, 70% of the workers in developing countries work in agriculture

Agriculture – two examples

The EU exports wheat at two-thirds of its production cost, and sugar at only 25%. The EU subsidises each cow by more than US$2 per day while 3 billion people in developing countries have to survive on less than this amount.

The US’ annual subsidies of US$ 4 billion for its cotton production cause a reduction in world prices of 26%, directly affecting the income of the more than 10 million people in West and Central Africa dependant on cotton production.

Manufacturing

What’s at stake?

- Market Acces: tariffs and non-tariff barriers

What are the problems?

- Employment

- Sustainable industries

- Essential income for many countries

- What kind of formula?

- Preferecence erosion

…textiles is the example of how it shouldn’t be done!

Services

…the inclusion of services is relatively new in the WTO

Services represent the fastest growing sector of the economy, accounts for 60% of global output, 30% of global employment and nearly 20% of global trade.

The General Agreement on Trade in Services covers all internationally-traded services. For example, banking, telecommunications, tourism, professional services, …

Services

What’s at stake?

- Offers and Access

What are the problems?

- The negotiating method

- Essential services included – irreversability of liberalisations

- Human beings – a tradable commodity?

- What is ’more burdensome than necessary’ and who decides it?

What is happening right now?

The Doha Development Round has never been a real development round

No place for employment or labour standards

At a stalemate but ready to take off…

Unsure whether the round will be finalised in 2007

What is the international trade union movement doing?

International coordination and lobbying

Getting media attention

Alliances and political pressure

Trade Policy Reviews

…but it all starts at the national level!

Issues for discussion

International trade and workers – what should trade union priorities be?

The value of a multilateral trade system?

Trade and labour standards – compatible?

Other ways of achieving fair trade – i.e. labelling?

What can you do at the national level?

Regional co-operation

An example of the wrong model: APEC

APEC in brief

21 Member Economies: Australia, Brunei Darussalam, Canada, Chile, the People's Republic of China, Hong Kong, Indonesia, Japan, the Republic of Korea, Malaysia, Mexico, New Zealand, Papua New Guinea, Peru, the Philippines, the Russian Federation, Singapore, Chinese Taipei, Thailand, the United States of America and Viet Nam.

Accounts for 46% the world's population, 46% of world trade and 57% of world GDP.

APEC was established in 1989 with the stated objective of enhancing economic growth and prosperity for the region and strengthening the Asia-Pacific community.

APEC in brief

Focus is on growth, cooperation, trade and investment. Key tool is reduction of tariffs and trade barriers as well as trade facilitation.

Cooperation is based on non-binding commitments, open dialogue and decisions made by consensus.

Bogor Goals adopted in 1994 are the main guide: free and open trade in developed APEC economies by 2010; in all of APEC by 2020.

From ‘trade only’ to a more to ‘trade and’

Trade union considerations

Bogor Goals – how far in achieving these: what will be done to speed up the process?

Scope of activities – lip service or a real interest in a broader agenda; openness to new policy measures or ‘traditional’ ways of working?

Will the HRDWG (1 out of 11 WGs) as well as the SSN-CBN and GFPN (2 out of 5 speical task groups) remain on the fringes?

How to get labour issues into APEC?

Finance, work and development

The work of the IMF and the World Bank

The IMF and the World Bank

The World Bank (WB) and International Monetary Fund (IMF) were founded in 1944 in Bretton Woods, USA.

They were created as companion organisations to the United Nations.

The IFIs are meant to contribute to financial stability and economic growth, leading to a more stable and prosperous global economy.

IMF and WB: roles and tasks

IMF: surveillance, technical assistance and financial assistance to ensure stability

World Bank: long-term development and poverty reduction through lending

The same undemocratic governance, flawed policy understanding and neo-liberal ideology

►

IMF and WB: SAPs

Starting in early 1980s, IMF, WB and regional development banks required the application of Structural Adjustment Programs (SAPs) as loan conditions.

During the 1980s, more than 70 developing countries apply SAPs designed by the IFIs on the pretext of reducing or avoiding indebtedness.

During the 1990s, most of former centrally-planned economies apply SAPs recommended by IFIs, claimed to be necessary steps for building a market economy.

From failure to failure

The SAPs failed but their legacy lives on…

- The IFIs have not succeeded in preventing an increase of poverty and inequality

- In general, there has been slower growth and more inequality after the introduction of SAPs in the 1980s

- During the 1990s, the number of people living in extreme poverty has increased in all regions except Asia

- In most developing/transition countries, real wages have fallen

- Responsibility for Asian financial crisis

The same policy prescriptions continue today

IMF and WB Policies

Privatisation

Liberalisation

Deregulation

Austerity in public spending

Trade union demands

Make a U-turn in policies

Change loan conditionality

Provide financing of public services and state-run pensions without demanding their privatisation

Extend debt relief to a greater number of countries

Support labour reforms only when they respect ILO conventions and promote the core labour standards

…some optimism!

Changing globalisation

Placing

Decent Workat the heart of global

governance

Labour standards, trade union strategies and capacity building:

Discussion of possibilities

Trade union strategies

Promoting Decent Work Promote the Core Labour Standards wherever possible Enabling national affiliates to work on the issues Securing that the international political environment

works towards the right priorities Ensuring the right architecture of global institutions and

more coherence between them Working for pro-poor and pro-workers policies in the

international institutions Ensuring better practices among multinational

corporations and in Export Processing Zones Securing a stronger, united international trade union

movement