Worker Rights in a Global Economy

U.S. trade policies must be “fully aligned with our values,” the new United States Trade Representative, Robert B. Zoellick, said in an interview published in The Washington Post on March 13. “I’m convinced, whether it relates to child labor, forced labor, or HIV/AIDS—and I’m sure there will be others—that to be successful, I and my compatriots have to get out front on those issues,” he told Post reporter Paul Blustein. Otherwise, warned Zoellick, the cause of free trade may be put at risk.

Top trade officials are averse to linking child labor or any other “value” with trade, so the thoughts expressed by Zoellick, only five weeks after he took office, are especially significant. His ideas are in tune with the changing public and private mood toward worker rights in the global economy. Never before have there been so many codes of conduct, declarations, speeches, statements, polls, editorials, letters to the editor and other pronouncements favoring international worker rights. But what difference has that outpouring made at the practical level—in the world’s workplaces, especially those of the most vulnerable workers?


Sweatshops still flourish. Children making garments and fireworks die in fires and explosions. Women work in factories seven days a week for a pittance, and then are routinely fired when they try to organize a union. In short, a glaring contradiction exists between today’s oft-proclaimed principles and actual workplace practices in many parts of the world. That contradiction becomes all the more glaring in light of the disparity between the vast wealth generated in today’s globalized world and the massive poverty among the working men and women who help produce it.

Thanks to the media and even more to the Internet, those grim realities are receiving relentless exposure. They sparked demonstrations such as the one at the 1999 ministerial meeting of the World Trade Organization in Seattle, and at the April 20-22 Summit of the Americas in Quebec City. At the Quebec summit President Bush and top governmental leaders from throughout North, South and Central America, as well as the Caribbean (excluding Cuba), reviewed a very early draft of a hemisphere-wide trade and investment agreement to establish a Free Trade Area of the Americas (F.T.A.A.). The Seattle protest, combined with deep disagreements among governments on a wide range of issues, short-circuited a plan to launch a new round of worldwide trade negotiations in 1999. The protests in Quebec City and elsewhere this year may at least slow down the F.T.A.A.

According to the limited information available, the 250-page preliminary F.T.A.A. draft is largely modeled after the North American Free Trade Agreement (Nafta), adopted by Canada, Mexico and the United States in 1993. Not just the A.F.L.-C.I.O. but unions throughout the hemisphere—as well as other nongovernmental organizations—are mobilizing against that model for not effectively incorporating worker rights and environmental protections, among other reasons. “Our trade union brothers and sisters in the hemisphere are working with civil society allies...demanding that any future regional trade or investment pact reflect their concerns, not just those of the multinational corporations and the policy elite of the hemisphere,” says an A.F.L.-C.I.O. executive council statement.

Critics of the F.T.A.A., like those of the W.T.O., are often portrayed as anti-globalization. The views of Jagdish Bhagwati, a mainline economist, illustrate that things are not that simple. Bhagwati, whose vigorous and prolific defense of free trade has no equal, opposes both regional trade agreements (such as Nafta, on the grounds that it competes with the W.T.O.) and certain provisions of trade agreements (the intellectual property rights protections and the unfettered movement of capital across borders). These are significant objections, shared by some other economists. But Bhagwati is no anti-globalist, even though his criticisms sometimes have a radical bite, as in his published charge that “the Wall Street-[U.S.] Treasury complex is unable to look much beyond the interest of Wall Street, which it equates with the good of the world.”

Today’s voluminous rule books of foreign trade cover much territory, geographically and substantively. Their numerous provisions determine which countries can sell or not sell you bananas, whether you can legally patent a South Asian folk medicine, what kind of laws your elected representatives in Congress and state legislatures are permitted to pass, who can sue whom across borders, what kind of label you can put on a can of tuna fish, and so on. By their very quantity and variety, specific rules are bound to attract opposition from many separate sources, which can coalesce into a formidable opposition. That could easily happen as negotiations toward an F.T.A.A. proceed during the next three or four years. As a result, the U.S. Trade Representative is seeking allies to obtain Congressional approval for legislation that covers the broad terms for trade negotiations and to bring about something else he deems important—having Congress make a binding agreement in advance to limit the scope it will have in considering an eventual F.T.A.A., as well as any agreement reached in the next round of W.T.O. negatiations. That fast-track scope, opposed by unions and others, would restrict Congress’s role to voting the agreement up or down, without amendment and within a relatively short time period.

The need for mustering broad support is at least partly responsible for Zoellick’s remarks that trade policy must be “fully aligned with our values,” and that the United States must “get out front on these issues.” After all, many—perhaps most—of those who rail against the F.T.A.A. and the W.T.O. on the Internet and who shout against them in public protests in various countries, are not anti-globalization crazies. They are people who believe in borderless human solidarity but are convinced that the present trading and investment system—devoid of a worker rights and environmental dimension—seriously impedes progress toward that solidarity. Last year on May 1, Europe’s Labor Day, Pope John Paul II told a rally in Rome of nearly 200,000 people, including worker delegations from 40 countries, “Globalization is a reality present today in every area of human life, but it is a reality which must be managed wisely. Solidarity too must be globalized” (italics in the Vatican text).

Members of the trade and investment community—the insiders and privileged outsiders who long have written, interpreted and enforced trade and investment rules on their own—insist that concepts like solidarity and human rights have absolutely no place in trade policy. But Nafta and other trade agreements do protect—and enforce—human rights. Certain specific human rights, that is: those of people and corporations who own property across borders. True, in the trade context the right to property is conventionally not identified as a human right. But take a look at Article 17 of the Universal Declaration of Human Rights: “(1) Everyone has the right to own property alone as well as in association with others; (2) No one shall be arbitrarily deprived of his property.”

Then take a look at the U.S.T.R. Web site for a summary of the U.S. negotiating position for the F.T.A.A. It fully embraces the provisions of Article 17 (without referring to it, of course) as necessary for the new agreement. In other words, the United States wants the governments of the Americas to protect the right of foreign individuals and corporations to own property in all its forms and to protect those properties against arbitrary deprivation. And the U.S. definition of property is broad, as the U.S.T.R. itself points out. Under intellectual property it includes “copyrights, patents, trade secrets, trademarks, and geographical indications”; under investment, it includes “all forms of assets that have the characteristics of an investment, such as companies, stock, certain forms of debt, certain concessions, contracts, and intellectual property.”

The U.S. insisted on the same position in the 1990’s during negotiations for a Multilateral Agreement on Investment in the Organization for Economic Cooperation and Development. In late 1998 that pact, meant for subsequent transfer into the W.T.O., was well on its way to adoption, but died at the hands of a worldwide campaign of opposition, in which even developing countries (in the words of The Economist) felt it was “designed to give rich-world investors the upper hand.”

Thanks to U.S. insistence, which was not confined to abstractions about values, Nafta’s Chapter 11 on investment was the early blueprint for enforcing property rights by international agreement. Chapter 11 has teeth, otherwise known as sanctions. It enables a corporation in one Nafta country to challenge another Nafta country’s laws, policies, or jury decisions, and to sue that country’s government for financial losses caused by alleged violations of Nafta’s expansive property rights rules. Although this extraterritorial power has thus far been exercised in only about 16 cases—one by a U.S. corporation challenging Canadian public health policies as “regulatory takings”—it has led Canada’s minister of international trade, Pierre Pettigrew, to urge the United States and Mexico to “clarify” the responsibility of governments under Chapter 11, since recent rulings were broader than originally intended.

In the modern global economy, capital, as embodied in investors and other kinds of individual and corporate property owners, certainly deserves reasonable cross-border protection So does labor. Denying such protection to labor, as embodied in workers and organizations of workers, is unjust and discriminatory.

This year’s hemisphere-wide campaign to eliminate that discrimination focuses on a future F.T.A.A. It may also send a message to delegations at the W.T.O. ministerial meeting on Nov. 9-13 in Qatar, Oman, where the next multilateral global trade round will be at the top of the agenda. Of course, success in that campaign will not of itself civilize the international labor market. But it will provide desperately needed encouragement and reinforcement to the many current initiatives—private, quasi-public and governmental; local, national, regional and global—necessary to protect the human rights of workers in word and in deed. And it will equip policy makers with a tool indispensable for managing globalization wisely.

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