What price the advent of a global market?

Date: 15/02/1996

The International Confederation of Free Trade Unions has pin-pointed the globalisation of trade as its major challenge for the next century. As the ICFTU prepares for its world congress in Brussels in June, Elizabeth Wise meets its general secretary, who sets out its strategy.

PUSHING its trading partners for promises to open borders, the EU trumpets the glories of linking markets and building commercial accords with countries around the world.

But Bill Jordan, general secretary of the International Confederation of Free Trade Unions (ICFTU), is not celebrating. He and other union leaders have another view of the much-lauded globalisation of trade, which they say is pushing up unemployment rates and putting European workers on the streets.

“It is the third world war,” he says. “There won't be mortal casualties, but there will be economic casualties.”

Jordan and his 127-million-member union group are calling on EU member states to defend European workers from the pressures of cheap labour in the developing world and to reform domestic social policy.

More trade, the EU reasoning goes, means more jobs. But that is not necessarily so, according to Jordan. “There is the prospect of real job loss in Europe, a permanent job loss, and a defensive reaction in Europe.”

Some may dismiss this as typical of the views of old-fashioned trade unionists, but, in fact, more and more people agree with Jordan. Klaus Schwab, founder and president of the World Economic Forum, which draws the world's movers and shakers to the Swiss ski resort of Davos each year, has spoken of globalisation reaching a “critical phase” and observed a “mounting backlash” in Europe, of which the crippling strikes in France in December are just one example.

Jordan believes the globalisation of trade is changing the world as dramatically as the Cold War did, but with “more significant effects”.

First, economic growth slows down and prosperity dwindles. Then, more slowly, but irrevocably, the world's centre of economic gravity shifts from the West towards Asia.

Jordan cites estimates produced by the Organisation for Economic Cooperation and Development (OECD) suggesting that seven of the world's ten largest economies will be in Asia in the next 25 years, and adds that his trips to Asia have convinced him that even those figures are conservative.

Schwab agrees that increased trade has not brought more jobs to Europe and wonders why Europe has not come up with an answer to the rising joblessness, or managed to convince workers that the benefits of trade are on their way.

Jordan has one answer. Although he does not advocate an isolationist policy or an end to international commerce, he says the EU should not confer trade benefits as easily as it does. Instead, it should demand serious reform from its partners.

“The privilege of free trade is a great one and not to be given away,” Jordan maintains. “It should be given in return for a pledge of civilisation.”

The union group is making itself heard at EU headquarters. Only last month, the European Commission, responding to complaints from ICFTU and the European Trade Union Confederation (ETUC), began investigations into forced labour practices in Myanmar (Burma) and Pakistan.

If the allegations of slave labour organised by the Burmese military and forced child labour in Pakistan are found to be true, both nations could lose their benefits under the Union's generalised system of preferences (GSP).

Since 1995, the EU has included social provisions in its GSP which enable it to refuse tariff reductions for imports coming from offending countries. Such conditions should be prerequisites for any country to receive GSP, argues Jordan.

More ICFTU letters to the Commission have targeted Swaziland, Niger and the Congo. The confederation rushed to mobilise last autumn in the face of

rapidly-advancing negotiations between the EU and Mercosur, the four-nation group of Latin American nations (Argentina, Brazil, Paraguay and Uruguay), to get labour standards encoded in the trading pact.

Now, with the EU-Asia summit looming, Jordan and his associates are once again making themselves heard. The ICFTU has asked the EU to demand a social dialogue when they meet Asian leaders on 1 and 2 March in Bangkok.

“For the trade unions, this is too good an opportunity to miss,” says the ICFTU's monthly publication Free Labour World. It has mobilised partner unions in the countries participating in the summit “to take steps with their respective governments”.

The ICFTU has asked summiteers to set up a work programme to develop a joint social agenda, covering the five international labour standards drawn up by the International Labour Organisation (ILO) and endorsed by UN member nations when they met a year ago in Copenhagen for the World Summit on Social Development. The standards include bans on child and forced labour, ensuring non-discrimination and the right to form unions. The ICFTU is also asking those attending the Bangkok summit to include a programme of trade union consultation in their negotiations on Euro-Asian cooperation.

Lastly, union leaders want the summit to end with a pledge that participating nations will support efforts in the World Trade Organisation (WTO) to set up a working group on the link between trade and labour standards.

That subject has sparked controversy at the WTO's headquarters in Geneva, where members disagree on whether the next round of world trade talks should include labour clauses. Developing nations, where labour is cheap, maintain the demand is a smoke screen for 'First World' protectionism.

The ICFTU says not only the WTO, but all international agreements such as the Asia Pacific Economic Cooperation (APEC) and the North American Free Trade Agreement (NAFTA), should have a clause which obliges parties to set standards for the “freedom of association and the right to collective bargaining, the minimum age for employment, discrimination, equal remuneration and forced labour”.

Jordan argues: “In the present rush to establish free trade agreements as a contractual basis for economic relations, the social implications are being overlooked.”

While Western countries cannot insist that factory owners in developing countries pay 'First World' wages, they can demand an end to child and bonded labour and discrimination, the ICFTU maintains.

Even if the nations involved have social standards, they are not being transposed into trading agreements, says Jordan. Domestic protection, therefore, risks being “undermined by the legal commitments which countries are entering into under the trade agreements”.

Jordan argues that process must stop, adding that international trade agreements, regardless of the number of countries involved, require basic labour standards.

Without that, unemployed workers will rebel.

He also insists that governments have failed to recognise just how serious the problem of unemployment is for the EU.

Service industries say that as their sectors grow, they will create jobs. But Jordan says those jobs do not fill the gap of the departing manufacturers, because full-time jobs will be replaced with part-time or temporary jobs. How is it, he asks, that while EU countries have had steady, albeit low, economic growth, unemployment has continued to rise?

“Europe is not aware enough of the cause of unemployment. Europe is not aware of how serious it is,” he says.

Jordan draws hope from Germany's social dialogue between employers, employees and government. He says the Germans have understood that it is worth restraining prosperity in order to keep jobs for all.

He also believes that, although the concept of social partnership has disappeared from the UK, continental Europeans still believe in it. Unions are still strong in France, for example - so strong that they succeeded in sparking a government crisis in Paris before Christmas.

Jordan says the rest of the EU should learn from the German approach, insisting: “If Europe is to get through this incredibly difficult period, it needs to adopt the German model on a continental scale.”