History of the world economy

World labor group warns of corporate concentration

Special to the People's Weekly World,
14 December, 1996

In a memorandum addressed to the the foreign ministers of the nations belonging to the World Trade Organization (WTO), the World Federation of Trade Unions (WFTU) said the issues before the first Ministerial Conference of the WTO "are of vital concern to the world's trade unions since millions of jobs - and the living standards of many millions more - are linked to international trade and economic relations."

The WFTU, the world's largest international labor organization with headquarters in Prague, said it hoped that the agreements reached during the Dec. 9-13 meeting in Singapore would "contribute to the achievement of I a New International Economic Order [as] defined by the U.N. General Assembly and oriented to the democratization of international economic relations.

Pointing to the fact that more than half of the 100 largest economies in the world are transnational corporations (TNCs), WFTU urged the meeting to be "particularly concerned" with the concentration of economic power in a relatively small number of corporations. This concentration, WFTU said, should stand as "a stern warning."

In its memo, WFTU reminded the ministers that while the sales of the top 200 TNCs is equal to more than a quarter of the world's economic activity, their combined global employment is only 18.8 million - less than 1 per cent of the world's work force. "The top five firms have more than 30 per cent of global sales in airlines, aerospace, steel, oil, personal computers, chemicals and the media," the WFTU memo said adding, "It is generally recognized that economic concentration ... discourages lower prices. Corporate profits have jumped 75 per cent from 1990 to 1995."

The WFTU reiterated its long-standing demand that globalization be based on international economic cooperation that upholds equal benefit for all trading partners as well as upholding international labor standards.

"In this context, it is essential that the United Nations, WTO and all U.N. agencies concerned resume the work to formulate a Code of Conduct for regulating the activities of transnational corporations, to orient the globalization processes to the principal global challenges in the matter of meeting people's needs," the WFTU statement said.

The WFTU warned that "a real danger of a 'backlash' to a globalization that has brought with it "unprecedented unemployment and the alarming growth of poverty, inequality and exclusion." Recent studies show that growth can only benefit the masses if it is accompanied by public investment in infrastructure and human resources development, without which the benefits of globalization might go to only 10 to 15 per cent of the population.

The WFTU reminded the conference that several developing countries had warned the UN General Assembly hat the preeminence of transnational forces had blurred the definition of national sovereignty. "There is widespread apprehension that a powerful minority is seeking to bankrupt and coerce the majority to meet their narrow economic and political ends," WFTU said.

The WFTU said it "hoped" that the Ministerial Conference would also take measures to ensure that international trading systems are based on principles of equality, sovereignty and non-interference in internal affairs.

The WFTU statement continued: "The WFTU has repeatedly called for the lifting of all trade sanctions against Cuba, Libya, Iraq and Iran, which deprive working people of access to food, medicines and other essential commodities. The WFTU hopes that the Ministerial Conference will impress upon all Member States of the WTO the responsibility to uphold the basic principles of international trade law and cancel all trade bans and other such measures which affect the free flow of international trade."

Turning to the contentious question of labor standards, the statement said: "The WFTU believes that effective mechanisms exist within the tripartite structures of the ILO to oversee the implementation of international labor standards and investigate complaints related to violations of ILO conventions" and called upon the WTO to "strengthen its cooperation with the ILO" and to call on its member states to coordinate efforts to secure the implementation of ILO labor standards.

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