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A Movement in Decline Stands Up to Mercosur Summit

By IPS Correspondents, IPS, 9 December 1998

SANTIAGO, Dec 9 (IPS) - The labour movement in the Southern Cone Common Market (Mercosur) is gearing up for a fresh fight at the bloc's summit in Brazil, to demand a social and labour dimension to the subregional integration process.

Brazil's 'Central Unica de Trabalhadores' (CUT) has called a street demonstration Thursday, demanding that the presidents of Mercosur members Argentina, Brazil, Paraguay and Uruguay and associates Bolivia and Chile include social clauses in their free trade accords and greater attention to labour.

Thursday's 15th Mercosur summit in Rio de Janeiro will sign a social-labour declaration that "is not what we wanted, but it is one step forward," according to Kjeld Jakobsen, CUT secretary of international relations.

The unions, grouped together in the 'Coordinadora de las Centrales Sindicales del Mercosur' (a coordinator of central unions), has been pushing for a binding charter to enforce compliance with core labour standards.

But they accepted a declaration because a "Socio-Labour Commission", comprised of government, labour and business, will also be created as a forum for debate and follow-up on compliance with basic workers' rights, said Jakobsen.

In spite of the efforts of labour leaders, unions were unlikely to obtain binding commitments by the governments due to one simple reason: today's labour movement is in sharp decline in the region.

The central unions of all six countries in the Mercosur sphere are in crisis, hit hard not only by privatisation processes and threats of economic depression, but also by internal conflicts within the labour movement.

Chile's 'Central Unitaria de Trabajadores' (CUT) has been weakened by a power struggle between communists and the governing 'Concertacion por la Democracia' (the centre-left Coalition for Democracy). Prior to the 1973 coup staged by Gen. Augusto Pinochet, which ushered in 17 years of dictatorship, CUT had over one million members - a number that has shrunk to 400,000 today, of a total workforce of five million.

Also in decline are the once combative 'Central Obrera Boliviana' (COB), Argentina's 'Confederacion General del Trabajo' (CGT), Uruguay's central union, the PIT-CNT (which has lost close to 80 percent of its members in the past three years), and Brazil's CUT, according to the data gathered by IPS correspondents in the Southern Cone countries.

The unions are involved in an uphill battle against the conditions imposed by free trade and the deregulation of financial markets and labour relations.

Privatisations have led to massive layoffs, especially in Chile and Argentina, as well as a further diminishing of the labour movement's strength.

Miners and railway, telephone, postal, oil and metallurgical workers have lost their past protagonistic roles, and today teachers and health professionals form the vanguard of public sector unions. Teachers have led major strikes in Argentina, Bolivia and Chile, protesting government austerity plans designed to balance budgets and tighten fiscal spending.

The financial crisis which broke out in July 1997 in Thailand to spread throughout Asia and around the world, is another factor that has worked against the trade union movement in Mercosur.

Warning signals of recession emitted by slumping stock markets have translated into bankruptcies, closures or cuts in activity of businesses and the resultant loss of jobs.

The phenomenon could bring back the high levels of unemployment that accompanied the tough structural adjustment programmes with which most Latin American countries pulled out of the 1980s debt crisis.

Unemployment, which stood at 4.84 percent of Brazil's labour force in December 1997, climbed to eight percent in June. And although it dropped slightly to 7.45 percent in October, observers fear it will soar to 12 or 13 percent by next March or April.

In Chile, one of the countries in the area with the lowest levels of unemployment, official figures put the rate at 6.8 percent in October. The University of Chile, however, estimates unemployment at 10 percent, and warns that the informal sector is expanding.

Argentina and Uruguay, nations with traditionally high levels of unemployment, have seen a slight drop in joblessness. But a surge in unemployment is one of the threats implicit in the domino effect that would come from a recession in Brazil.

Argentina's unemployment rate, which stood at 13.7 percent in October 1997, had fallen to 12.5 percent by October this year - but at the cost of a boom in the number of self-employed and informal sector (black market) workers, who account for fully half of the workforce of 15 million.

Unemployment in Uruguay dropped from 11.4 percent in late 1997 to 10.2 percent in September this year.

In Bolivia, the official unemployment rate stands at 16 percent - but unofficial estimates put it closer to 35 percent.

According to the president of Brazil's CUT, Vicente Paulo da Silva, only 32 percent of Mercosur workers hold full-time formal sector jobs, while 53 percent are under-employed (including those active in the informal sector) and 14 percent are jobless.

That means around 58 million workers either out of a job or involved in unstable work, without rights or guarantees - with women bearing the brunt of the burden, said Brazil's Jakobsen.

Trade within Mercosur rose fivefold to 20.2 billion dollars from 1990 to 1997. But in that period trade with the rest of the world went from a 17.3 billion dollar surplus to a 16.7 billion dollar deficit - which meant many exported jobs, Da Silva pointed out.

Mercosur - whose four full members have a combined 200 million inhabitants - is the world's fourth largest economic player, after the United States, the European Union and Japan. It's combined Gross Domestic Product (GDP) of 1.1 trillion dollars accounts for 80 percent of South America's total GDP.

Brazil's CUT, economists and non-governmental organisations held their own forum Tuesday and Wednesday to discuss civil society's participation in the integration process and problems like growing unemployment. (END/IPS/tra-so/mo-ggr/sw/98)