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Will a social clause in trade agreements advance international solidarity?

By David Bacon, 29 November 1999

This week the AFL-CIO will mobilize thousands of union members to demonstrate in Seattle outside the meeting of trade ministers of the World Trade Organization. The labor federation is calling for incorporating the rights of working people around the world into the text of future trade agreements, and for treating the impact of trade on workers as a fundamental issue.

But the AFL-CIO is proposing a way of dealing with trade with which a number of unions disagree. It proposes a social clause, which would incorporate into future trade agreements core labor standards, including prohibitions against child labor and prison labor, against discrimination, and against violations of the right of workers to organize unions and bargain. The WTO enforcement process, now used to protect the ability of transnational corporations to move investments and production freely across borders, could then be used to protect workers' rights as well, the labor federation argues.

But many unions, including leftwing ones in Europe and Canada, have serious questions about the proposal for a social clause. Some equate it with proposals in Europe to make a social contract between labor and capital part of the process of creating a single European economy.

The social contract has tended to be a proposal of Europe's more conservative unions. The more radical ones have argued for opposing the process of merging economies itself, rather than negotiating worker protections within an economic framework dominated by transnational corporations and banks. In Europe, the movement towards a single currency and the merger of markets has brought with it austerity formulas for the elimination of social benefits and protections won by workers over the last fifty years.

Social democrats are now in power in Britain, France, Germany and Italy. In some of those countries workers and unions have been able to reverse the economic trend, and some governments have been more responsive to worker pressure than others. But all these social democratic governments argue that for Europe to make it in the world economy, productivity has to be increased, and social needs and benefits brought into line. That often brings the governing parties into basic conflict with the working-class base which has brought them to power. The conflict is not so different from that which has taken shape in the U.S. between labor and the Clinton administration.

The flaw in the social democratic argument is that its assumption and purpose is wrong. Society exists to serve the social needs of people, not the productivity needs of capital. Those two needs are in basic conflict - a conflict of class interest.

The criticism made by the Canadian Labour Congress of the proposal for a social clause in the WTO negotiations is similar. "The struggle by unions, social justice groups and environmentalists is about more than just winning a seat at the table, or a 'social clause' or environmental rules," a CLC statement declares. "We're determined to change the entire trade regime."

But even assuming that negotiating a social clause is a good idea, in the context of trade negotiations first of all it requires that labor agree on a common agenda. The social clause the AFL-CIO proposes reflects the institutional needs of unions in a wealthy, industrial country. Unions and labor in other countries see other needs as well, especially the need for economic development. Parents of farmworker families in the Philippines and Mexico, for instance, overwhelmingly agree they would prefer that their kids had the opportunity to go to school rather than work. But simply prohibiting child labor doesn't provide that opportunity. It just cuts the income the family depends on to survive.

Labor federations in developing countries propose a large variety of programs for economic development. The more conservative generally support foreign investment and the governments which encourage it. The more radical ones support a program of national development which seeks to protect local industries, and even keep them in public, rather than private, hands. Those kinds of development programs are the antithesis of the economic framework the WTO enforces. Unless the international trade structure is changed drastically, these national development alternatives will not be possible. So proposing a social clause to limit the prerogatives of foreign investors lines up with the more conservative labor federations internationally, and undermines proposals for nationalization and national development less dependent on transnational capital.

Our definition of what the social clause should cover is narrow, reminescent of the land reform proposals of the AFL-CIO in El Salvador during the civil war, or of the Sullivan Principles in South Africa. While labor rights are important, there's a bigger struggle going on -- over who controls the economies of developing countries, and what the development program is.

U.S. unions need to negotiate a common agenda with labor in developing countries, and recognize and respect differences of perspective and opinion. Saying, for instance, that the All China Confederation of Trade Unions is not a legitimate union body because it doesn't agree with the AFL-CIO's trade agenda is a form of national chauvinism, and smacks of the old coldwar prohibitions and destabilizations. It is also very short-sighted from the perspective of forging a common front against transnational corporations who seek to whipsaw workers and take advantage of differences in standards of living from country to country.

The big problem in the new (or old) international economic order is the difference in the standard of living between wealthy and poor countries. The difference between Mexico and the U.S., which was about 3:1 in the 1950s, is about 16:1 today. That difference is the cause of the loss of U.S. jobs as corporations relocate production. So long as this huge gulf exists, U.S. workers will continue to have that problem, social clause or no.

U.S. unions can seek to talk with the Chinese or Mexicans or Salvadorans or Cubans about the dangers they see in trying to rely on transnational corporations as a source of capital for economic development, and should do so. And of course, if they have fraternal, cooperative relationships based on mutual respect and self-interest, they will have a more receptive audience that they will if they treat people with whom they disagree as though they had no right to exist.

But the big problem isn't the policies of foreign labor federations, or even their governments, but with our own. US economic and trade policy has a greater influence on the widening gulf in income than any other single factor, and that, of course, is our responsibility.

The Clinton administration, which at first was unwilling to discuss any labor protection, has seen a certain reality -- that addressing (whether in real or just PR terms) the worst of the abuses in foreign factories is a way of deflecting domestic pressure. But it has no interest in addressing the fundamental problem of poverty, and the role its policies play in perpetuating it. In fact, if anything, its newfound interest in labor standards is a way of enabling the implementation of those same policies. So the Labor Department proposes a garment code of conduct which prohibits forced and unpaid overtime after 60 hours, or the labor of kids under 14, in Central American sweatshops. The corporations which violate the code are demonized, and the ones that don't are considered ok.

But the proposals for standards and codes of conduct leave unasked a basic question -- where does the poverty comes from which forces workers through the factory doors? What policies are pursued by the U.S. government which perpetuate that poverty? Seeking to avoid these questions, the administration proposes to negotiate over limits on the worst abuses (not necessarily as the workers of those countries define them), so long as U.S. labor basically accepts an international trade structure and economic order which institutionalizes the gulf in the standard of living, and the impoverishment of whole nations.

Since the AFL-CIO has already endorsed the administration's presidential candidate, who proposes these same economic and trade policies, there's a certain political convenience involved, to say the least.

An alternative program for international labor solidarity could be based on a much broader set of ideas. They might include:

1. Negotiate an agenda (including the terms of social clauses), based on mutual respect and self-interest, with the unions and workers of all countries.

2. Accept the legitimacy of existing unions - no coldwar prohibitions or destabilization programs. Develop friendly and cooperative relationships based on dealing with common employers, and with the effect of U.S. trade and economic policies on the people of the country involved.

3. Oppose the negotiation of new trade agreements, and demand the restructuring of the international economic order.

4. Make international policy dealing with the difference in standards of living from country to country a primary objective of AFL-CIO policy, reexamining the role U.S. economic, political and military policy plays in reinforcing that difference. Labor solidarity means opposing U.S. foreign policy in areas where it has led to drastic decline in living standards, such as the economic reforms in eastern Europe.

5. Make independence from U.S. foreign policy a matter of principle, including ending subsidies for AFL-CIO programs from USAID, NED or other government institutions. The AFL-CIO should be unafraid to publicly criticize imperial policies like the US counterinsurgency program in Columbia, economic and military sanctions in Iraq and Serbia, and the economic blockade of Cuba.

6. Respect differences in cultural and social norms, including different social systems. Some countries believe in the rehabilitation of prisoners through work, for instance, (a principle supported in the past by reformers in the U.S. as well), while recognizing that workers don't want to have to compete against the products of unpaid labor.

7. Prohibitions against some forms of labor, such as child labor, also need to include alternatives which will actually increase the incomes of the families affected, so that they can survive without the earnings of children.

8. Support an independent system for the enforcement of labor standards -- not the WTO system, which should be opposed on principle. The WTO structure is controled by developed countries, and used to impose an unjust international economic order on developing ones. It is unrealistic to expect that same structure to ensure economic justice. Calling for it to do so alienates those people who are its victims, and raises the possibility that international labor standards could be used as the pretext for economic aggression in trade wars.

9. International labor standards should include those which affect people in the U.S. and developed countries, as well as developing countries. U.S. working people, for instance, need a prohibition on strikebreaking, living wages, the right to free health care, the elimination of mandatory overtime, an end to welfare reform, and protection for the rights of immigrants.

david bacon - labornet email
internet: dbacon@igc.apc.org
phone: 510.549.0291

david bacon
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berkeley, ca 94703