It is widely agreed that development cooperation budgets are marginal compared to the financial flows from trade, investment and even the remittances sent by a country’s emigrants.
It is therefore very important to focus on the causes of poverty and inequality, and to tackle these causes through development policy. This in essence is what the shift from the Millennium Development Goals, that are sector-based and focused on the impoverished countries, to the Sustainable Development Goals, which are universal – for everyone – and common – for all peoples, should be about. And every country must establish how it will resolve its shortcomings, and everyone can demand that it fulfil its goals.
On the labour front, as workers and trade unions we have always called for social and environmental clauses in trade treaties. It is a means of setting a “floor” and improving labour standards.
At the moment, across our oceans, be it between the European Union and the United States (TTIP) or between the US and the countries of the Pacific (the Transpacific Partnership TPP) or between the Asian countries (through APEC),etc, the aim is to create trade blocs where trade (and investment and capital flows) is allowed to grow without constraint. Let competition be decided on price. Not how something is produced, or how the production chain works or how profits are shared. Bring down customs duties, liberalise investments and capital flows. Circumvent the World Trade Organisation and do not seek compensatory, control or participatory mechanisms. Do not try to prevent tax havens or tax avoidance by the multinationals. The negotiators of these agreements repeat that they will respect the internal rules and regulations of each party on many issues, including labour.
When it comes to labour economics, there are always contradictory studies that show an overall increase in or loss of jobs, and very disparate results in different sectors and territories in the short and medium term. Little or nothing has shed light on the improvement or deterioration in working conditions after these agreements have entered into force and are being applied.
But when trade is governed by the laws of the jungle it creates greater inequalities, according to whether the enterprise, sector or even region specialises in goods or services for which there is high demand because they are “different” or scarce, made with skilled labour, compared to the opposite, the homogenous product, not differentiated in any way, made thanks to a large supply of labour, etc.
That is why we need to have standards to set the “floor”, the ILO’s Fundamental Conventions. But we must also demand decent work and social dialogue to achieve better standards in every country. The rush by governments to create a whole network of trade agreements, without a parallel set of social and labour standards, suggests that they are aiming for an increase in unfair competition that will undermine working conditions in every country, including those of developed countries. They will not be competitive in many countries because in terms of price and market access many products can be produced in other places with lower labour costs (because there is no collective bargaining for example) and lower environmental standards. While this sort of dumping has always existed, globalisation and the practices associated with it (tax avoidance by multinationals, ease of transport, increased trade…) have worsened distortions in trade and could continue to do so.
For example, we could take a look at the unequal ratification on the two sides of the Atlantic, EU-US, of the ILOs International Labour Conventions. The United States has not ratified six of the ILO’s eight principal conventions, including those on freedom of association (no.87) and collective bargaining (no.98). They have only ratified 14 of the 189 international conventions currently in force. By contrast, all European Union countries have ratified the eight fundamental conventions and Spain for example has ratified 133 of the 189.
What does it mean when there is no collective bargaining in an airline or, de facto, there are no trade unions? What is the price of their tickets? How would this affect a company that complies with all the best labour standards? Where will FIAT establish its head office, where will it produce and who will profit from the sale of one of its vehicles? What will Apple do with its huge profits made in 190 countries, while it doesn’t pay tax in any of them and where it auctions off the factories that assemble its gadgets? All the share holders and fund managers are laughing at us.
European entrepreneurs should be the first to call for the ratification of the ILO’s Fundamental Conventions by the United States in this future US-EU trade treaty. By not doing this – and their governments are not doing it either – they are heading in the medium term for a lowering of European standards, all for the sake of competitive pricing.
The words of Cecilia Malmström, European Trade Commissioner, speaking to the European Parliament, are clear: “As far as labour rights are concerned, we don’t have total harmonisation in Europe, there are different rules, but a foreign company that does business in Europe must respect European laws, national laws, and when we go to the United States, we respect American laws. We are going to harmonise them.
What we are trying to do in all our negotiations is to press for all eight of the principal ILO Conventions to be ratified by all the other countries. As you have said, the United States have ratified two, and two more are more or less incorporated in the national legislation. We will see if we can make progress on the other four. They are not going to ratify the text of the other four, but we can make progress in the spirit of those conventions with the United States.”
Given that there is plenty of scepticism about achieving something “in spirit”, this accommodating position in favour of “business” is something we should reject. It is not enough to talk about ‘decent work’ in one treaty or another, to make a supposed concession to the trade unions, instead of including an actual labour standard. It devalues it.
The OECD, the organisation of the world’s richest countries, favours these agreements. It has always sought an increase in trade, the ‘flexibilisation of the labour market’, the free flow of capital. At the same everyone can see the lack of freedom of association, and impossibility of collective bargaining, in some of this club’s countries, and its indifference to the tax avoidance of the multinationals, to the existence of tax havens developed by its own members with ad hoc tax regimes, over the 50 plus years of its existence.
In short, these agreements do not promote an upwards harmonisation of social rights and environmental regulations that favour workers, consumers and citizens, be they European, American or Malaysian. Their contents will be extrapolated to other trade agreements around the world with a domino effect, to the detriment of the rest of the population of this planet, favouring global capitalism, stronger multinationals, with fewer rights and a smaller say for citizens. That is why we have to reject them. “Business” must support people.
