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Trade and labour standards: speech by Brendan Barber

Issue date
Wilton Park Conference Speech

19-21 October 2008

TUC General Secretary Brendan Barber

My starting point is that everything has changed.

At the weekend, the Financial Times called John Maynard Keynes 'the man in the news' and the Chancellor used him as justification for how he is confronting the possibility of a new recession.

The US is about to elect a new President - certainly change is the mantra that has made Barack Obama the favourite to win.

Above all this, what has really changed is that the world is facing a new economic paradigm. Bluntly, liberalisation and deregulation of the financial system have demonstrably failed to deliver the goods, and may well have poisoned the well when it comes to growth, jobs and sustainable economic progress.

At the moment, the main impact is on Wall Street and in the world's financial system. But we know that the chill winds that have reached Hurricane Katrina force on Wall Street are now impacting on Main Street, and it won't just be Main Street, USA, but Main Street, Europe; Main Street, Asia and Main Street, Africa.

Meanwhile, and I hope that anyone involved in the negotiations won't be too upset at me for saying this, on planet Doha, it appears as if nothing has changed at all. The same arguments, the same objections, the same briefings for the press about who is to blame for the latest failure to reach agreement.

Bluntly, if trade negotiators and the governments they represent carrying on doing what they've been doing for the past seven years, they will continue to get the same answer which is stalled talks, stuttering trade, no real increase in development.

What is needed on the trade agenda is a new approach for new times.

First, and most positively, the WTO should be riding the crest of a new support for multilateral decision-making.

Second, we do need to recognise that what the world needs now like a hole in the head is a return to protectionism. We've been down that road before, and it simply exacerbated the crisis.

We need to recommit ourselves to building global trade - not just between north and south, or north and north, but south-south trade too.

For our part, as trade unionists, we must re-commit ourselves to free trade, to more effectively make the arguments for trade justice and fair trade.

I don't see the contradiction between free trade and fair trade, between free trade and labour and environmental standards, any more than many of you would see any contradiction between free trade and intellectual property rights or the rule of law.

These are simply the fundamentals that must underpin the global trading system, the rules that we need to trade with each other, part of the global architecture.

They are vital to winning the support of organised labour - still 165 million people around the world, twice that if you include China - and the support of ordinary citizens and consumers.

I will say more about this in a moment.

But I also want to add the third pillar to a successful renewal of world trade negotiations.

That is the decent work agenda. I am very pleased that the ILO came up with its Declaration on Social Justice for a Fair Globalisation this summer, and proud of the contribution that TUC colleagues made.

A world trade deal based on trade alone will not capture the imagination, or win the consent - maybe even support - of the people it needs to reach.

It needs to be part of a wider agenda, made ever more necessary by the global financial and increasingly wider economic crisis. It needs to address the development needs of the global south and the need for a boost to demand that the north now needs too.

Because I return to my earlier point: trade and the expansion of trade is a good thing. Trade is needed for growth and growth creates employment. Trade justice was for instance a central theme of the 2005 Make Poverty History campaign because we acknowledge that to address the systemic causes of global poverty trade has to be got right. In the longer term it will make much more of an impact on development than debt relief and aid budgets.

But trade alone is not enough. I'd hope there is no one here who still believes in trickledown theory, but to listen to some of the exponents of the Doha round, you would think it was a proven fact upon which we can base a global system. There appears to be a failure to acknowledge that growth in trade without the associated polices and regulations to ensure that the benefits of that growth are fairly distributed makes it pointless, unless of course you already happen to be one of the privileged few.

So after those comments on why we support an agenda for a reformed multilateral trading system. Let me turn briefly to what we mean by core labour standards, just for the record. What are these rights that seem to strike so much fear into the hearts of some companies and governments?

The Core Labour Standards are summed up in eight ILO conventions which can be grouped under four headings:

  • freedom from discrimination;
  • freedom from forced labour;
  • freedom from child labour; and
  • freedom of association and the right to bargain collectively

These core standards are universal. The extent of implementation will vary according to a country's state of development or the priorities agreed at a national level but these basic standards are supported and campaigned for by all trade unionists, north and south.

At this point when the power, wealth and global reach of business is arguably greater than ever before - with a number of multinationals now worth more than the economies of many developing nations - our argument has to be that only universal, international standards can effectively regulate the behaviour of today's big corporations and ensure that the benefits of trade reach people.

On the other hand, and to recognise that some multinationals are better than others, they also need these standards to underpin their own commitment to good practice, and because, despite their size, no multinational enterprise can single-handedly protect the rights of every child, every bonded labourer and every trade unionist around the world.

Companies need the support of the state in ensuring standards such as those established by the ILO are implemented and enforced, and I think this is nowhere more true than in the case of child labour, where the development of decent jobs for parents, decent schools for children, and active enforcement of the ILO conventions need to move hand in hand. No single company, however progressive, can do that on its own.

But let me return to the points I made earlier about the need to gain public consent, if not active support, for increased world trade.

In Britain we were repeatedly told that the way globalisation was progressing and the trade system developing was good for us. The 'China price' helped keep inflation down and consumer goods within everyone's reach.

But when it is your workplace that shuts down because it is cheaper to make the goods in the Pearl River Delta or answer the calls in Bangalore the fact that your DVD player was £20 cheaper isn't always so relevant.

The case for the mutual benefits of a globalised economy still has to be won - not just among people like my members in the north, but among the people of the south.

Our arguments for a link between labour standards and trade agreements at all levels aren't and mustn't be a protectionist agenda.

We shouldn't and don't object to fair competition based on comparative advantages such as easier access to materials, lower labour costs or economies of scale.

However we do and must object to a race to the bottom in terms of labour standards and artificially low costs based on the deliberate subversion of Decent Work, such as unions being illegal or rendered unable to function.

Southern trade unionists will of course speak for themselves - I'm glad to see so many here today. But what I have heard, especially in the joint campaigns we have run with our colleagues in the south about EU Economic Partnership Agreements, is that while there is an acknowledgment that increased trade can bring benefits if it is done right, when it goes wrong ....

  • formal sector jobs are destroyed and if replaced at all are replaced by work in informal unprotected sectors;
  • markets are forced open in an unsequenced way and are swamped by goods from the developed world or the largest developing countries;
  • new industries aren't allowed to find their feet and their potential to create good decent jobs is lost; and
  • the purchasing practices of our multinationals can lead to workers being forced to work 16 hour days, 7 days a week to meet rush orders or requirements that are changed at the last minute on the whim of a buyer in London or New York.

And politicians and trade officials wonder why there is a growing backlash against the WTO, EPAs and regional and bilateral trade agreements!

Is it all doom and gloom? No. The ideas and tools to build a fairer and more just system are there.

How do we start?

Well obviously from a union perspective we need labour rights and environmental standards to be built into trade agreements in a watertight way with the same status as any other clauses.

Social and environmental standards must cease to be seen as an 'add-on' to be paid lip service to when talking to domestic audiences, but dropped once the 'real' business of trade negotiations gets underway.

Almost as bad is their inclusion as poor relations of 'commercial' clauses with no follow up or enforcement mechanisms. Recent US and Canadian bilateral agreements have given us a possible template for how agreements can be drawn up which help to improve standards in a meaningful way (something I'm sure Thea will be happy to expand on)

Voluntary initiatives like the Ethical Trading Initiative and consumer power demonstrated in the growth of 'fair trade' products are important for setting best practice and raising awareness and consciousness, but in the new world that the current crisis is heralding, we have to force home the point that global markets need global regulations.

A system based on trade justice sustaining and supporting Decent Work would be a genuine win-win situation improving living standards for people in both developed and developing countries. If we carry on the way we are going it will end badly for not just the world's poorest but all of us here too.

The time to start looking in a concrete way at how this can be done is now. Pascal Lamy has called for a global summit to address the financial crisis and push for movement on trade, and I hope that he is talking about a summit that brings together all the stakeholders.

This is not a simple issue, but for us the need is clear and the dangers of failing to act are stark.

I hope the debate over the next couple of days will focus on how we can make the link a reality and I look forward to the discussion now.

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