A Better Recovery

The virus has demonstrated the interdependence of people not only within communities, workplaces and nations but throughout the world. The importance of countries sharing expertise, working together on a vaccine and supporting each other through tough times has demonstrated the value of international collaboration and solidarity. These values must be integral to our recovery.

It is not just the virus that crosses borders. Our economy is truly global in nature: investment, goods, services and people cross national borders every day in increasingly complex and varied pathways. The rules that govern our international systems for trade and finance often act to damage the interests of poorer countries and make it harder for working people across the world to be paid fairly for their labour, driving down regulatory standards and working conditions. Workers in the global south whose livelihoods and often lives depend on the behaviour of large multinational companies are let down by the lack of global rules on workers’ rights and social protections, and the low levels of trade union coverage. Those that face discrimination, including minority ethnic and migrant workers have often paid the greatest price.

These rules have benefited the multinational companies that benefit from cheap labour, but have been promoted by the multi-lateral institutions, such as the World Bank, IMF and World Trade Organisation, that should be standing up for workers’ rights. Reform of international rules and institutions is urgent, and in building back a better country, we must also play our part in building back a better world. Trade unions across the world are pushing for a new social contract with decent work at its heart. Now is the time for countries to come together to build it.

Trade deals which have weakened labour protections have pushed workers into the informal economy with devastating consequences for their livelihoods now

The global trade agenda has been driven for too long by the interests of multinational business. Unfair trade deals and trade rules enforced by the World Trade Organisation (WTO) have driven underdevelopment in many countries by removing protections for domestic industries and displacing workers from good jobs into the informal economy. They have also driven privatisation of public services and undermined social security systems and democratic decision making by enabling both governments and foreign investors to challenge and potentially remove social protections.

The terrible consequences of this trade agenda have been revealed by the Covid pandemic with millions of workers in the informal economy, particularly in Global South countries, forced to face the risk of infection over the certainty of starvation when there is inadequate social protection or access to free healthcare. The International Labour Organisation (ILO) estimates that as many as 1.6 billion of the world’s two billion informal economy workers are affected by lockdown and containment measures, and that these measures threaten to increase poverty among informal workers in low-income countries by as much as fifty-six percentage points. [1]

Urgent action by governments and international funders is required to address the needs of these workers now. But in order to ensure that the post-Covid recovery creates decent jobs and protections for all workers, the global approach to trade needs to be fundamentally rethought, with the aim of producing decent jobs for everyone. Governments must use international trade treaties to promote development, gender equality, decent jobs, universal quality public services, social protection regardless of immigration status, and commit governments and companies to uphold ILO standards.

This means that trade deals must:

• have effectively enforceable labour rights commitments with penalties imposed on governments and companies that do not uphold ILO standards or the Decent Work Agenda
• require that businesses adhere to the UN Guiding Principles on Business and Human Rights and have strong state mechanisms to ensure this
• not remove tariffs on developing countries that are needed to protect domestic industries
• completely exempt all public services
• completely exempt personal data
• not contain any special court systems that allow foreign investors to sue governments for actions that threaten their profits (Investor State Dispute Settlement style systems).
• involve trade unions in negotiations, to ensure that workers’ rights are kept central.

The UK government should begin by putting in place this approach in its own negotiations on trade with the EU and US. At present, the refusal by the UK government to commit to uphold a level playing field on workers’ rights in the EU-UK deal threatens to begin a race to the bottom in the UK. And the UK government’s negotiating objectives make clear a deal with the US threatens to reduce workers’ rights, data protection and public services. ^[2]

Weak regulation of global supply chains means that the workers who produce the goods we consume enjoy none of the protections we expect

Trade unions have long been concerned that global supply chains have developed without proper regulation or the involvement of trade unions which have left countries dependent on few exports and driven down conditions for workers. This has meant that the pandemic has had a devastating impact on countries dependent on the export of goods such as textiles – the clothes that end up in our shops and wardrobes. As there has been a crash in demand, millions are threatened with abject poverty. Research by the ILO shows that:

• An estimated 200 factories in Cambodia have either suspended or reduced production and at least 5,000 workers have lost their jobs.
• In Myanmar, a lack of raw materials from China has led to the closure of at least 20 factories and the loss of 10,000 jobs.
• In Viet Nam, an estimated 440,000 to 880,000 workers could face reduced hours or unemployment. In the worst-case scenario, this figure could increase to as many as 1.3 million.
• In Bangladesh, as many as 2.17 million workers have been affected by the crisis, with many facing unemployment as orders are cancelled and production declines steeply. ^[3]

By insisting on sourcing from countries with low overheads – cheap labour, few regulations and low taxes – companies are complicit in the devastation that follows the mass cancellation of orders. Even if they had been paid living wages - a long time ask by campaigners that rarely, if ever, been effectively delivered, these workers would have little income protection, poor access to health care and minimal food security. The profits of our brands still rest on the total vulnerability of their suppliers’ workforces.

Building on the progress made since the adoption of the UN Guiding Principles of Business and Human Rights, a global effort needs to be made to ensure that business models address these profound inequalities at a far deeper level than has been attempted so far. In the short term, business must join unions in pushing governments to provide social protection and respect the ILO’s core standards, and be prepared to pay if increased costs result. In the longer term, they will have to rethink their purchasing approach, engage in social dialogue and help build a model of global supply chains that is centred on decent work and respect for international labour standards. The era of cut-to-the-bone and infinitely flexible supply chains must come to an end.

International institutions must be reformed so that they work towards a new social contract

The push towards informal models of work, and the lack of regulation of global supply chains have been facilitated by international institutions that have privileged the interests of multi-national business over workers, promoting a deregulatory agenda that has served to entrench inequality. The World Trade Organisation (WTO), International Monetary Fund and World Bank have entrenched rules that have consolidated the power of multinational companies and worked to undermine workers’ rights, labour market institutions, quality public services and other social protections through deregulation, liberalisation and privatisation in both the Global North and Global South.

These institutions must act urgently to protect workers most at risk in the pandemic, but this should be just the start of a new approach which democratises these institutions to ensure equal participation from the global south, and puts decent work, social protection, and a just transition to a lower carbon world at their heart. All development cooperation should follow the principles set out in the Busan Principles for Effective Development Cooperation. ^[4]

Urgent and longer-term actions must include the following:

• The IMF should co-ordinate fiscal stimulus, and issue additional ‘special drawing rights’ (SDRs) – a mechanism for boosting member countries’ reserves - with a Trust Fund into which advanced economies can re-allocate their holdings of SDRs to be used for public health, social protection and protecting jobs. ^[5]
• The UN should lead a binding sovereign debt work out mechanism In 2018, at least 46 low-income countries spent a greater share of GDP on debt servicing than on healthcare systems. This has no doubt weakened their ability to respond to the Covid-19 pandemic. While there has been some debt cancellation and relief led by the IMF, World Bank and G20, greater action and coordination is needed. The TUC supports a UN-led binding debt sovereign work out mechanism.
• Multilateral organisations should work together to establish a Global Fund for Universal Social Protection to support health care and income support for Global South countries. this should support public services including health and social care and education being brought back in house. Social protection is a fundamental right and key component of the ILO’s Decent Work Agenda. ^[6]
• The WTO should require its members to uphold International Labour Organisation Standards as a key part of promoting a trade agenda that enables decent work.
• The UN should lead a co-ordinated effort towards new global rules on taxation New global rules, including a global financial transaction tax, are also required to ensure there is progressive taxation that ensures companies pay their fair share in the countries where they operate and addresses issues such as carbon emissions. It is estimated that tax havens collectively cost governments between $500-600bn a year in lost corporate tax revenue through evasion and avoidance. Low-income countries account for $200bn of these losses, which is more that the estimated $150bn they receive in foreign development assistance each year. ^[7]

International co-operation is essential to tackle the far right

Globally, far right governments have used the Covid-19 pandemic as a justification for anti-migrant, racist and xenophobic actions and an increase in authoritarian measures.

• Hungary has put in place an indefinite state of emergency with limits on free speech and has blamed foreigners for the spread of the virus in the country.
• In Brazil the president attended an anti-democracy rally and the education minister has blamed Chinese people for the virus.
• Poland is going ahead with new legislation that can be used as a system of political control of the judiciary.

They have sought to sow division and blame ‘the other’ for the social and economic suffering caused by the pandemic to divert attention from their inadequate responses to the crisis and the long term impact of the economic policies which have left workers behind. Furthermore, far right governments have denied migrants and refugees fundamental human rights such as the right to medical care, rights at work including safe working conditions and social security entitlements.

The TUC works with trade unions internationally to counter the far right, supporting unions to organise workers from all countries and racial backgrounds to demand decent treatment and stop racism and xenophobia. But the efforts of trade-unions must not stand alone. A new internationalism based promoting decent work for everyone must be part of a global effort to counter the hatred, fear and division propagated by far-right parties that damage workers everywhere.