28 November 1999
Labour issue is "false debate", obscures underlying consensus, WTO chief Mike Moore tells unions
Poverty, not trade, is the main cause of bad working conditions, and it must be met by expanding commerce, not imposing sanctions, World Trade Organization Director-General Mike Moore told international trade unionists on 28 November.
Addressing the International Confederation of Free Trade Unions (ICFTU) conference on "Globalisation and Workers Rights" in Seattle, Mr. Moore warned that "demonizing globalization" deflects attention away from the needed solutions: promoting trade so that it can lift workers in developing countries out of poverty, and tackling the mismatch in developed countries where many workers lack the skills demanded by a new knowledge-based economy.
The ICFTU conference was held on the eve of the WTOs Third Ministerial Conference which opens in Seattle on 30 November.
The full text follows.
I value this opportunity to speak. This is the second time in less than a year that a WTO Director-General has been asked to address the ICFTU. In between, we have had increasing contacts and exchanges at all levels of our organizations and many meetings, both privately and socially, with your leaders and officials and some affiliates. This reflects our mutual interests - and the importance of continuing our dialogue in the time ahead.
I wanted this job because I saw the WTO as a way of lifting living standards for working people everywhere. I also believe that the WTO is fundamentally about international solidarity, interdependence, breaking down barriers between people as well as economies. Prosperity and peace - that to me is what the multilateral trading system can bring about.
I have never seen a contradiction between trade and labour because I don't believe one exists. Open economies, imperfect as they are have delivered more jobs, opportunities and security to more people than alternatives. Countries that have embraced openness and freedom have increased the real incomes of their workers, which in turn has raised labour standards and reduced poverty. Countries that remain closed, remain poorer, underdeveloped, cut off from the world of rights and freedoms. If I made a contribution to my country it was to make the case that trade is about jobs and income, taxable income, to pay for our dreams of better health care and better education.
This is why I find the bitterness and divisiveness of the current trade and labour debate so destructive and confusing. It is destructive because it is in many ways a false debate. It is destructive because it obscures the underlying consensus that exists about the social problems all countries face in this interconnected world, and the need for shared solutions.
Families want the same thing everywhere. Someone to love, somewhere to work, somewhere to live and something to hope for.
Who supports slave labour? Or prison labour? Who wants their children in factories rather than in school? Who among us is immune to the social and economic disruption of technological change? None of us.
Most of the 135 members of the WTO are also members of the ILO. We represent the same taxpayers, the same governments, the same constituents. All of these governments have an interest in improving their social and labour standards. There is a profound connection between economic, political, social and industrial freedom and economic development. Indeed, there is an argument that freedom is a basic pre-requisite for economic success.
All WTO's membership signed up to the Singapore Declaration in 1996 committing them to core labour standards, supporting the ILO, affirming that trade helps promote higher labour standards, opposing the use of labour standards for protectionist purposes and agreeing that the comparative advantage of countries - particularly low-wage developing countries - must in no way be put into question. The ILO adopted the 1998 the Declaration on Fundamental Principles and Rights at Work which endorsed the basic principles of freedom of association, the right to collective bargaining, elimination of forced labour, effective abolition of child labour, and elimination of discrimination in hiring and employment practices. Just this year, the ILO agreed to prohibit the worst forms of child labour, while recognizing that child labour is largely a function of poverty and that sustained growth is key to eliminating its exploitative and harmful forms.
All of these governments are signatories to the United Nation's Universal Declaration of Human Rights. These rights are not the property of one organization, one culture, or one country, but of all people. There is a conceit that these are European or even American rights. They are not. They are universal rights. No-one complained about globalization when the Berlin Wall fell or South Africa was freed, or the Colonels returned to their barracks and freedom rose. No. Men and women of conscience and commitment everywhere, from the frontline in Poland and South Africa to the backline in my small green country, and I suspect here in Seattle, marched in solidarity with oppressed people in South Africa and Poland. It was trade unionists who stood as internationalists in solidarity for freedom everywhere. Why? Because there were universal values at stake in all these places. Now should we shrug off their needs for markets and jobs?
Men and women of the labour movement, we must follow the Singapore mandate and ensure the WTO and the ILO have a good working relationship. My predecessor, Renato Ruggiero, and I have had regular contact with the head of the ILO. I have spoken to Juan Somavia and assured him that I don't want his job. He assures me he doesn't want my job. This is, in part, because there is no difference between us on the vital importance of advancing labour standards, and the need to do so by persuasion, positive assistance, and get jobs and growth - including growth through trade. The challenge is not for one organization to do the work of all, but for all organizations to work together in a more coherent way. Whether its the ILO, UNICEF, WHO, the World Bank, IMF, or the WTO, we need cohesion in tackling these problems. No single Parliament or international institution can legislate away all the evils of our planet or the miseries often made worse by bad governments. We can't have clean air in one country alone, or organize our fisheries or even run a tax system or an airline without the co-operation of others. But, together we can "inch up" workers' and families' conditions.
Not all our critics are wrong. We live in a time when we have never had so much but we've never felt so insecure. One day companies announce their highest profits, and the next a thousand layoffs. We can't find enough trained workers in sectors like high technology and in cities like Seattle; but in other sectors and other regions, jobs are disappearing, never to return. Even in the most dynamic economies like the United States we find large parts of the work force losing ground or facing redundancy. Productivity is being decoupled from employment - growth from redistribution. Both within and between nations the gap is growing.
People want answers. One answer we hear with growing insistence is that trade and globalization are to blame. Globalism is becoming shorthand for everything we don't like about the world as it is. About technology. About our fear of foreign workers taking our jobs. About countries who don't play by the rules. Or about treaties, rules and agreements that limit our own countries' freedom to act. This is understandable. From the agricultural revolution to the industrial revolution through to the information revolution - every great and historic period of economic transformation has been accompanied by uncertainty about the future, disillusionment with leaders, and reaction to change. The current wave of economic change is no exception. At the turn of the century, 80 per cent of the people worked the land in my country, now less then 10 per cent , but we produce much more fibre and food. If all you have is a pair of hands to sell in the information age, then your future is limited.
There are dangers in this backlash to globalization, which we ignore at our peril. It is true that the benefits of the global economy are not evenly shared, not enough can ever be spent on health education or the elderly. It is right that sovereign Governments have this responsibility for spending priorities, but the vulnerable are not helped by blocking trade, restricting investment, and making economies poorer. Consider the statistics: exports have grown by 51 per cent in the United States in the past six years, which has accounted for more than a quarter of economic growth. Trade has contributed to almost 20 million new jobs - jobs which pay on average 25 per cent more than non trade-related jobs. They show that trade is the ally of working people, not their enemy.
What is true for the advanced economies is true for developing economies as well. Imposing trade sanctions - making developing countries even poorer - will not stop children being put to work. Or lift the living standards of their families. Just the opposite. Poverty, not trade, is the main cause of unacceptable working conditions and environmental degradation. And the answer to poverty is more trade and business, not less. The OECD concludes that a new round of tariff liberalization would boost world economic output by 3 per cent - or over 1.2 trillion dollars - and that developing countries would benefit most. India's GDP would grow by 9.6 per cent, China's by 5.5 per cent, sub-Saharan Africa's by 3.7 per cent. As living standards improve, so too does education, health, the environment, and labour standards. In open and democratic societies, people demand more. Innovation needs freedom to flourish and in closed economies hope and growth perish.
The other danger in demonising globalization is that it deflects attention from the solutions we need. The main problem faced by workers in the United States and elsewhere is not foreign competition. It is the mismatch between the skills demanded by a new knowledge-based economy, and the skills many workers now bring to the market. We need to "future proof" our children - and their parents - through education, training and adjustment assistance. Developing countries need more technical assistance, more help with capacity building, and greater access to our markets. Fighting to protect the status quo might provide temporary shelter. Protectionism can save jobs in the short term; at the cost of investment in new jobs and then you end up with neither new nor old jobs. Who wants the status quo in medicine when their child is sick? The status quo is just yesterday's compromise.
There is also a darker side to the backlash against globalization. For some, the attacks on economic openness are part of a broader assault on internationalism - on foreigners, immigration, a more pluralistic and integrated world. Anti-globalization becomes the latest chapter in the age-old call to separatism, tribalism and racism - the "them" versus "us" view of the world. When I was a young man the word internationalism was a noble word. It was also a word that that had real meaning for labour. We took to heart the old songs about international solidarity and the brotherhood of man. But now the idea of internationalism has become something to be feared or attacked. It concerns me that many of those who sincerely want a better and more just world now find themselves aligned with those who stand against internationalism in all its forms. I guess globalisation is the last "ism" to hate.
I know you will fight always for labour's interests. Governments come and go but labour always marches on. Greenpeace will push environmental interests and the International Chamber of Commerce will push business interests. Why shouldn't you? It is your duty. This is what democracy is all about.
I am of the first generation of New Zealanders who did not have to fight in a world war. We know that the great depression caused the collapse of the world trading system because the protectionists won then with the same arguments they use now. From that depression came war and the twin tyrannies of our age, fascism and marxism. And the first people they locked up were democratic trade unionists. If we learned anything from the destructive first half of this century, it is that integration leads to economic growth, interdependence and common shared values, which are in turn the building blocks of peace. We need to reinvent the ideals of our fathers; of internationalism and solidarity for a new age of globalization, and to help build a new fresh, fair consensus around trade and labour for working people everywhere. The new century must be one of persuasion not coercion, with engagement through multilateral rules, agreements where our differences are settled fairly, through the law, which is the mandate of the WTO. It's not perfect, it can be improved but the world would be a more unstable and more dangerous place without it.