Speech by TUC General Secretary Brendan Barber at the Wilton Park Conference

Wilton Park Conference, 8-10 November 2006

Strengthening labour standards in the global economy

Brendan Barber, TUC General Secretary

Thursday 9 November, 09:15-10:45

WHAT CAN TRADE UNIONS DO TO PROMOTE RESPECT FOR LABOUR STANDARDS?

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I am very glad to be here again at Wilton Park, and sorry that I cannot stay for the whole conference. I'd like to thank the organisers at Wilton Park and the co-sponsors at the Foreign and Commonwealth Office and also Tom Levitt in particular who will be speaking after me - I hope these brief words of thanks protect me from any retaliation to my remarks from that quarter!

I don't expect any, in truth, because the message I want to convey is that trade unions and governments have a shared agenda on core labour standards and globalisation, and that it is in our interests to work closely together.

That isn't to say that there aren't other alliances to be forged, other stakeholders with an interest.

But the current globalisation story or narrative is one where unions and governments in particular could work closely together.

What is that story?

If you talk to ordinary people in the developed world (that means anyone not in the room this morning!) their experience and views about globalisation are likely to be contradictory.

They like the cheap goods, they like the exotic food, they like the plentiful entertainment - films, music, books - and they like the foreign holidays.

Compared to when I was a lad, Britain's consumers now have a completely different experience. Choice has gone global.

But they aren't so keen on the lifestyle choices they have been forced to make.

To be blunt, they are often at the very least uneasy about the development of a multicultural Britain (and that applies to immigrant communities too, including the Black British or second-generation Hispanic Americans).

And they are more than uncomfortable about the way the economy is changing, especially if one of the downsides of globalisation - offshoring, longer hours or precarious employment contracts - has affected them or their family directly.

One consumer's cheaper imports are another person's job gone east.

At the Labour Party Conference in September, Tony Blair said that the British public were reluctant global citizens, and I know what he means.

But they're not reluctant because they are xenophobic - I firmly believe that most people aren't.

And they're not reluctant because they don't see the benefits. As I say, I think they see both sides of globalisation, albeit not always at the same time.

The British, and I think this goes for people across the developed world, are reluctant because they are worried that, when push comes to shove, the economy as a whole might gain from globalisation, but they might personally lose out.

They may well agree that globalisation is good in the long run, but as John Maynard Keynes pointed out, 'in the long run, we're all dead'.

So what we are beginning to see is workers in developed economies becoming increasingly ambivalent about globalisation. And workers are, of course, voters.

In Japan, in the US and in Europe, arguments for protectionism are being heard more and more, and they are being listened to by governments.

In some cases, these voices are articulated through trade unions, although as the case of the current debate over the accession of Bulgaria and Romania into the European Union, governments have often been faster to adopt protectionism than trade unions, a point I will return to.

Voters are indicating to governments that they don't like the downsides of globalisation, such as destruction of local manufacturing, offshoring of white collar occupations, the introduction of hedge funds that can make or break a company in minutes and therefore take short-termism to new heights.

They don't like the race to the bottom which is too often the lazy answer to global competitiveness. I'm not just talking about wages, which are still generally increasing in economies like Britain's, but about the assault on workers' terms and conditions that has been spearheaded by calls for greater flexibility, the growth of temporary agency contracts and longer hours for less money - especially the case in some parts of the German economy, for instance.

What workers in the developed world want in a globalised economy is security.

That doesn't have to mean a job for life, but it does mean a safety net.

It doesn't mean that we try to shut out the rest of the world or resist globalisation, but it does mean that we should try to ameliorate the downsides, and help people cope with the challenges that globalisation brings.

And that's where labour standards come in.

For the last generation or two, workers in the west have more or less had a safety net provided by a combination of the welfare state and strong trade unions. In the US, that has been slightly less true than in the rest of the west, and in Scandinavia it has been rather more true than on average.

There is an argument that the best safety net is a strong entrepreneurial culture so that those who lose out as a result of globalisation can claw their way back in through hard work and risk-taking, and that is part of what happens in the US. But the greater inequality in the US, the fragility of a system that could be knocked so sideways by a natural disaster like Hurricane Katrina, and the political storms currently around social security reform in the US do not, I suggest, support that case.

What we need in the west to make globalisation more palatable is measures which make it easier for ordinary people to survive its effects.

That can include action by the state - more training, more infrastructural investment - measures to create jobs without damaging competitiveness.

The EU's Globalisation Adjustment Fund, announced by the British Presidency a year ago, is a step in exactly the right direction, not least because it directs assistance to the workers who are hurt by globalisation and restructuring, rather than their erstwhile employers.

It isn't a big enough fund, of course, and it doesn't involve the social partners, so it is a rather technocratic solution, but it's one small step in the right direction.

Creating a safety net can also include action by unions. Studies over many decades have shown that restructuring exercises which involve the workers' representatives themselves are better for the workers, and actually better for the enterprises.

Unions can articulate the concerns of workers and ensure that those concerns translate into measures which give those workers back some control over their lives.

Unions can and do negotiate alternatives to employer strategies that would leave workers poorer, or out of a job altogether, and they negotiate retraining packages, too.

Bluntly, governments in the west need to give workers more of a voice in the globalisation debate, with a say over practical issues like restructuring, offshoring or downsizing.

But this is all about the global north. What's the picture in the global south?

This conference has been in session since yesterday afternoon, so someone must have quoted the old Polish saying that 'there's only one thing worse than being exploited by a multinational company, and that's not being exploited by a multinational company!'

The south, too, has cause to be ambivalent about globalisation.

On the one hand it is the only secure route out of poverty, whether that's through migration, trade or development aid.

On the other, it can mean decisions about a country's industrial strategy being taken out of that country's hands, and the same can be said of decisions about the extent of the public sector, with globalisation meaning privatisation for too many countries.

The race to the bottom doesn't only affect northern economies, either. When the Multi-Fibre Agreement ended a couple of years ago, it wasn't European textile workers who suffered most from the influx of cheaper Chinese products (there were effects, but Europe was cushioned by higher value added products), but those in Bangladesh and Lesotho, where wages were slashed and jobs lost.

In too many cases there is no growth in trade helping to lift the poorest economies off the bottom rung, merely a shift in Europe's trading arrangements so that we buy goods from China rather than the rest of South East Asia.

So workers in the global south often lose out because of the same arguments about competition that northern workers face. The problem is, they start from a worse position.

They need labour standards as much or even more than we do.

The TUC took part earlier this year in an AFL-CIO seminar in Kuwait, which discussed the relationship between labour standards and trade.

The Gulf trade unionists present at the seminar were adamant that they wanted trade deals with the US and the EU to include labour standards clauses because that was the only way to provide them with the rights they needed to defend their own terms and conditions.

They emphatically did not see the demand for social clauses to be a plot to protect the standards of EU and US workers, but a way of raising standards across the world.

The International Trade Union Confederation - or ITUC - which was formed last week in Vienna has been quite clear in supporting a labour standards approach to development, and it does so not because it is dominated by the global north, but because the world trade union movement, north and south, is united in calling for basic labour rights as the building block of development, growth and free trade.

Those rights and the concept of decent work, don't forget, were developed by the ILO, where the global south participates equally with the north.

The European social model is not, in truth, a European invention, but a global one, and the nascent European Union borrowed heavily from the ILO's labour standards in developing the social model.

So while unions recognise we can't stop globalisation, we can help shape it. That means giving it a social face as well as an economic dimension. And that means ensuring all workers - whether in the UK or the developing world - can share in the benefits.

Last year, millions of people across the world mobilised under the Make Poverty History banner to argue for more and better aid, trade justice and debt relief, underpinned by a decent work agenda based on the core ILO labour standards.

That campaign is ongoing, with the TUC and the ITUC working closely with the Global Economic Justice Network and Global Call to Action Against Poverty, in particular in the run up to the G8 next year in Germany when poverty in Africa and global economic imbalances are both on the agenda.

Our aim is to get governments and international economic institutions to move away from the stifling neoliberal consensus, and we have some cause for optimism.

Across Latin America, for example, new models of development and growth are emerging based around values of social justice.

The fact that there are different models in different countries - Chile or Brazil, for example, or Venezuela - is a hopeful sign that we won't get trapped once again into support or opposition for a specific model of social justice.

The second challenge we face is protecting the casualties of globalisation at home.

In August the TUC published a report setting out the steps the government should take to address this growing problem.

We want to see a much stronger framework of employment rights, so that British workers are no longer the quickest and cheapest to sack in Europe, like the two thousand workers at Peugeot in Ryton.

Our argument is not about economic protectionism, it is about exactly the opposite - creating a level playing field.

We're not against free trade, but to be truly free it must be truly fair, trade between equals based on common principles like the rule of law and trade union and other human rights.

The TUC has made a similar case about the equally important issue of migration.

In a global economy, it is inevitable that people in poor countries will migrate to rich countries to build a better life.

It goes without saying that the TUC welcomes migrant workers and the contribution they make.

Indeed we do not want to see any restrictions placed on the right of Bulgarian and Romanian workers to come here when their countries join the EU.

But we do not want them to be exploited, and nor do we want them to undercut the existing workforce.

This is a key issue for trade unions, but it's one we must approach we some delicacy. We must not allow a race to the bottom which pitches poor workers against one another - especially if the economy takes a down turn.

A rights-based approach - a labour standards approach - is the only way to simultaneously protect migrant workers from exploitation and safeguard the terms and conditions, indeed the jobs, of the existing workforce.

And as we campaign for a better legal framework, unions must redouble their efforts to reach out to migrant workers - because the best protection they can have is the protection of a trade union.

Which leads me onto the third challenge we face - building trade union organisation in the age of globalisation.

As capital becomes more global and more mobile, so must we.

We need to respond to globalisation by creating a new internationalism in our movement.

First - we need to see campaigning initiatives that transcend national boundaries and really make the multinationals stand up and take notice.

Like the recent campaign to secure justice for Group 4 workers in Indonesia, sacked while they were on strike.

A campaign that involved Group 4 workers and their unions here in the UK, in the US and in South Africa.

Second - we need to build global alliances with other progressive social organisations.

Unions must work more closely with NGOs, environmental groups and anti-poverty campaigners around a common agenda. The Global Call to Action Against Poverty is an example of that.

I said earlier that I would return to the issue of the rise of protectionism and the possibility of a progressive alliance between governments and unions about globalisation.

As I said, workers who we represent are voters, and they need to be convinced that what governments are doing is in their interests, or those governments won't be governments for very long.

That logic has impelled many governments, including those who are most vocally committed to globalisation, down protectionist paths.

It has led the US government to impose tariffs despite being pro-free trade (and against European steel-makers, not against economies with no respect for human or union rights).

It has led the Italian government to consider turning a blind eye to Belarus' appalling human rights record to secure favourable treatment for its shoemakers.

And it has led the British government to restrict labour market access for the EU's two newest members in a U-turn that has seen the Chancellor imply that whilst markets must be free, free movement of workers is globalisation gone mad.

In Europe this year we have had to fight off a Services Directive that would have left labour law at the mercy of the market in the name of completing the internal market in goods and services, but we see the emergence of a single labour market with a contradictory and inadequate web of different labour standards.

Unions and governments should be working together to answer the electorate's fears not with protectionism, but with the protection of labour standards.

We should be discussing ways not to pull up the drawbridge and each pursue our own fortress social model, but ways to spread the core labour standards of the ILO to all economies - the precise antithesis of a tariff barrier, because they are universal.

The Swiss writer Max Frisch once said of importing human capital, 'we invited guest workers, and got human beings.'

Rather than pursue a dry, impersonal neo-liberal agenda we should be giving a human face to globalisation.