NEW RULES FOR THE GLOBAL ECONOMY
As the 20th century draws to a close, the global economy still is reeling from the turmoil unleashed by a series of serious financial crises. A quarter of the world economy remains mired in recession, and sluggish growth in much of the rest of the world calls into question prospects for rapid global recovery and improving living standards for the majority of the world's workers. While increased global integration has brought growth and dynamism to some sectors and to some corporations, its downside has become more apparent and more troubling.
Long-term trends toward growing global inequality continue, both between and within countries. In sub-Saharan Africa and in many other of the poorest countries, per capita incomes are lower today than they were in 1970. The gap in per capita incomes between countries with the richest fifth of the world's people and those with the poorest fifth widened from 30-to-1 in 1960 to 60-to-1 in 1990 and to 74-to-1 in 1995. Meanwhile, the richest three people in the world have assets greater than the combined incomes of the 600 million people living in the 48 poorest countries.
Most American workers have not benefitted from global integration either. Real wages have stagnated or declined for the majority of American workers, while the wealthy few have reaped disproportionate gains.
The economic and political power of transnational corporations has become increasingly concentrated, both through mergers and acquisitions and, in some industries, through rapid growth. Dramatically unequal access-between men and women, among English and non- English speakers and among countries-to technology, education and Internet connections will exacerbate these trends.
In the United States, fundamentally flawed trade policies have resulted in ballooning trade deficits, the loss of hundreds of thousands of high-paying manufacturing jobs and a system of international rules that has undermined domestic measures designed to protect human rights and the environment. Trade agreements have opened our markets while leaving in place other countries' barriers, and they have empowered multinational corporate giants while leaving workers and communities to fend for themselves in an increasingly bitter global competition for scarce jobs and investment.
Chronic and growing U.S. trade deficits have led to a massive international debt that is not sustainable in the long run. The underlying problems must be addressed, or these trade imbalances will bring the current economic boom to an abrupt halt.
If we do not fundamentally change U.S. policies and the policies of the international institutions in which the U.S. government plays such an important role, we will continue to lose good jobs, our trade deficit will continue to soar, inequality will continue to grow, corporate power will become more concentrated and the world's poorest nations will fall further behind. The American people will-and should-reject a policy of global engagement that comes with these costs. There is an alternative.
America's unions are committed to a new internationalism focused on building international solidarity around a progressive, pro-worker, pro-environment, pro-community international economic policy.
Global Turning Point
The global community stands at an important turning point-key decisions will be made in the near future, both in the global policy arena and by national governments. Later this year, the world's trade ministers will meet in Seattle to consider whether to launch an ambitious new round of negotiations and what such negotiations should address. In the wake of the Asian financial crises, the international financial institutions are under pressure to re-evaluate the conditions they impose on developing countries in exchange for loans and financial assistance. The U.S. political system is stalemated with respect to new trade negotiating authority, unable to build consensus around traditional trade bills.
We should use this moment to pause and take stock of globalization so we can begin to repair the damage that has been done by misguided and careless policies. After several decades of tearing down trade barriers and increasing the mobility and flexibility of direct investment as well as speculative capital, we need to take an honest and careful look at the results. What has been the impact of current trade and investment liberalization policies on development, income distribution, financial stability and American workers? Have we struck the right balance between the need for global rules and the scope of domestic regulation on public health, the environment and human rights?
Current Rules Have Failed
The current framework of global rules has failed miserably on many crucial counts. The international financial system has promoted policies that left many developing countries vulnerable and unprepared in the face of currency volatility and unpredictable swings in speculative capital flows. The result was thousands of bankruptcies and suicides and tens of millions of people losing their livelihood and falling into desperate poverty. The international financial institutions pressured crisis countries to export their way out of their problems-exacerbating deindustrialization and a rising trade deficit in the United States.
Trade and investment rules have focused on guaranteeing the mobility of goods, services and capital across borders without giving adequate attention to the social impact of liberalization. In doing so, they have strengthened the power of corporations bargaining with their workers, as well as with national and state governments.
But these trade and investment policies have done nothing to discipline illegal and anti-social behavior by corporations and governments competing in a fiercely competitive global economy. As a result, American workers have found themselves increasingly in head-to-head competition with workers in other countries who lack basic human rights, and legitimate national regulations protecting the environment, consumer standards and workplace health and safety have been challenged as disguised restraints on trade.
Development policy has been inadequate, inefficient and misguided. If the global economy does not generate more equitable outcomes in the developing world, then the entire global system will become increasingly unstable and unsustainable. We must use trade and investment agreements to reward those governments that respect workers' rights, protect the environment and allow democracy to flourish, not those that create the most hospitable climate for foreign investment, regardless of social concerns.
Our Challenge
The AFL-CIO, working with its affiliated unions, international brothers and sisters and allies in civil society, will raise these issues to the public; engage in constructive dialogue; work to elect public officials at all levels who share our concerns; and demand changes in the rules, both nationally and internationally.
We will focus our attention on implementing an integrated global strategy, one that achieves three broad, interrelated objectives: generating equitable global growth and development; adopting rules to regulate global competition for capital and markets in a socially constructive way; and reforming the international financial architecture so that national governments and international institutions have both the policy tools and the mandate to regulate financial flows appropriately. This project will go hand in hand with our work to reform the domestic economy and labor market. Neither of these efforts can succeed without the other.
At the national level, the American union movement has forcefully and decisively rejected the failed model of corporate-centered trade agreements, such as the North American Free Trade Agreement (NAFTA). In conjunction with allies in environmental, religious, consumer, women's and development organizations, we twice defeated a regressive, restrictive Fast Track bill that would have advanced this model to new areas. We are prepared to do so again if our substantive concerns are not adequately addressed.
In coordination with a broad international movement, we helped defeat the Multilateral Agreement on Investment (MAI) that was being negotiated by the 29 wealthy nations of the Organization for Economic Cooperation and Development (OECD). The MAI would have further shifted the international balance of power toward transnational corporations, eroded the regulatory capacity of national governments and undermined the bargaining power of unions. The challenge facing us now is to take the next, more difficult, step and build a coalition that can initiate, negotiate and implement progressive trade and investment agreements, not just defeat bad ones.
National Priorities
At the national level, our priorities must include:
* Ensuring that the U.S. government consistently and effectively demands the incorporation of enforceable workers' rights and environmental protections into the core of all new trade and investment agreements-multilateral, regional, bilateral and unilateral, including the Free Trade Area of the Americas, extension of NAFTA benefits to the Caribbean and extension of trade preferences to Africa or other regions. We will vigorously oppose any agreements that fall short of this standard.
* Strengthening the workers' rights provisions in existing U.S. trade laws and enforcing these provisions aggressively and unambiguously.
* Vigorously monitoring and enforcing trade agreements that are now in place.
* Strengthening and streamlining safeguard provisions in U.S. law (including Section 201 and the NAFTA safeguard provisions), as well as at the World Trade Organization (WTO). We must have the capacity to respond quickly and effectively when import surges cause or threaten injury to domestic industries.
* Renegotiating NAFTA to address serious flaws in a number of areas, including investment rules, safeguard measures and cross-border trucking access. The labor and environmental side agreements need to be strengthened and made enforceable.
* Developing a comprehensive national policy on the transfer of technology, production, and production techniques that makes the rights and interests of U.S. workers a priority.
* Assuring that trade agreements do not threaten the integrity and safety of our nation's transportation systems (including air, rail, maritime and trucking).
* Providing deep debt relief and development funds to ensure that our developing country partners have the resources they need to raise living standards and implement appropriate labor and environmental standards.
International Priorities
The WTO must take concrete steps to achieve the following:
* Review the impact of trade liberalization on income distribution, economic development and financial instability before launching major new negotiations.
* Incorporate enforceable rules on core workers' rights (including the freedom of association, the right to bargain collectively and prohibitions on child labor, forced labor and discrimination in employment).
* Establish accession criteria requiring that new WTO members are in compliance with core workers' rights.
* Overhaul existing rules to strengthen national safeguard protections in the case of import surges and ensure that trade rules do not override legitimate domestic regulations. It is essential that WTO rules not infringe on the ability of national or state governments to use their purchasing power to protect human and workers' rights.
* Develop stricter rules against the mandatory transfer of technology, production, and production techniques.
* Ensure that WTO rules do not create pressure on governments to privatize public services.
* Carry out institutional reforms, enhancing transparency, accountability and access, so that citizens can understand the basis for WTO decisions, as well as provide meaningful input to this process.
* Provide more technical and legal support to developing countries so their participation in negotiations is not hampered by lack of resources or technical expertise.
In addition, the AFL-CIO thinks new negotiations on investment and competition policy are headed in the wrong direction-toward shoring up the rights of investors at the expense of other members of civil society and U.S. laws.
When the world's trade ministers meet in Seattle Nov. 30-Dec. 3, the AFL-CIO and its affiliated unions will mount a major national and international union mobilization to ensure these issues, which are of great interest to our members and to workers worldwide, form the agenda for the WTO's trade discussions.
Coordinating the Work of the International Organizations
The AFL-CIO supports the International Labor Organization's (ILO) 1998 Declaration on Fundamental Principles and Rights at Work and urges the ILO to move forward speedily with a strong and energetic follow-up mechanism. Now that the ILO and the international community have succeeded in building consensus around the universality and importance of the core workers' rights, it is crucial that these core standards be incorporated into the work of the other international organizations, including the WTO, the International Monetary Fund (IMF) and the World Bank.
The IMF, the World Bank and the regional banks must fundamentally rethink the conditionality they impose on developing countries. Rather than forcing austerity, privatization, deregulation, export-led growth, trade and investment liberalization and weakening of labor laws, the international financial institutions must emphasize domestic-led growth, democratic institutions and the observance of core workers' rights.
The international financial institutions and the governments of the industrialized countries must take urgent steps to grant deep debt relief to the least developed countries that are in compliance with core workers' rights so these countries can meet the basic human needs of their populations and lay the foundation for future growth.
The Economic Imperative
The current regime of international trade and investment rules has failed on economic as well as moral terms. Aggregate global growth is slowing, not accelerating. Global inequality is growing. And many of the nations heralded in the recent past as stars of the global economy have found that repressing political dissent, stifling an independent union movement and concentrating economic and political power in the hands of the corrupt few do not provide a basis for long-term growth and stability.
The AFL-CIO is facing the challenges of the global economy in three ways: by building international solidarity, working to change the rules of the global economy and fighting on the home front to build strong, effective unions and ensure that workers have a voice in the national political debate.