Globalization, Trade & Decent Work Arun Kumar

Globalization? Participants views…

Why Globalisation? Capital Needs Markets…new markets for profits; Also natural resources Capital Needs Markets…new markets for profits; Also natural resources Developing countries need to grow, need capital, access to new technology, goods & services; Developing countries need to grow, need capital, access to new technology, goods & services; Investors need free trade, minimum or no regulations on capital & safe guarding of their investments; Investors need free trade, minimum or no regulations on capital & safe guarding of their investments;  Economic reforms, free trade & Globalization!

Forces behind Globalization G7 Countries (reflecting Business/Financial Capital Interests) - US Treasury Dept major player G7 Countries (reflecting Business/Financial Capital Interests) - US Treasury Dept major player IMF IMF World Bank World Bank WTO – Estd on 1 st Jan 1995 WTO – Estd on 1 st Jan Regional Banks like ADB and Private Banks, Regional Banks like ADB and Private Banks, Global based Investment Funds, TNCs, UN Organizations, Domestic business interests… Domestic business interests… Estd after 2 nd WW in 1944

What is Globalization Promoting? Supremacy of markets, Government - a problem! Supremacy of markets, Government - a problem! One size fits all kind of policies: One size fits all kind of policies: Open markets for trade, investment & capital flows, FDI rather than foreign aid, no performance requirements on FDI, cut govt deficit, privatize, etc Employment flexibility Employment flexibility

Global Labour Market Scenario, 2006 Global workforce: Over 3 billion (another 430 million will be added by 2015 majority of who will be from developing countries) Global workforce: Over 3 billion (another 430 million will be added by 2015 majority of who will be from developing countries) Women constitute 40% of the labour force (1.22b) Women constitute 40% of the labour force (1.22b) About 1.37 billion working people earn less than $2/day (working poor); 522 m live on less than 1 $ a day – majority of world’s poor are in Asia and Africa. About 1.37 billion working people earn less than $2/day (working poor); 522 m live on less than 1 $ a day – majority of world’s poor are in Asia and Africa. Over 3/4 th of the working population in Africa lives on less than US$2 per person in the household, per day (260.3 million, expected to go up to million by 2015). Over 3/4 th of the working population in Africa lives on less than US$2 per person in the household, per day (260.3 million, expected to go up to million by 2015).

Global Labour Market Scenario, 2006 No. of unemployed globally: m; No. of unemployed globally: m; Women comprise about 42% of global unemployed (about 82 m); Women comprise about 42% of global unemployed (about 82 m); 44% of world’s unemployed are youth (86.3 million) [over 48% of these are in A-P region]; 44% of world’s unemployed are youth (86.3 million) [over 48% of these are in A-P region]; Over 43 m new jobs to be created each year in order to reduce global unemployment, says ILO Over 43 m new jobs to be created each year in order to reduce global unemployment, says ILO

Global Background (2002, in %) Share in World Income/GDP Share in World Income/GDP Share in World Trade Share in World Trade Share in FDI Share in FDI Share in Portfolio Investments Share in Portfolio Investments  HIC (80.5), MIC (11.5), LIC (2), China & India (6)  HIC (72.9), MIC (15.6), LIC (2.7), China & India (8.7)  HIC (76.6), MIC (12.5), LIC (1.1), China & India (9.8) Source: ILR, 2004/1-2, Vol 143, ILO, Geneva

Trade Liberalization Doha Development Agenda- name given to the agenda for multilateral trade negotiations that restarted at the Fourth Ministerial Conference in Doha, Qatar, in November 2001; Doha Development Agenda- name given to the agenda for multilateral trade negotiations that restarted at the Fourth Ministerial Conference in Doha, Qatar, in November 2001; There are about 21 items on this agenda, covering issues connected with what was agreed under Uruguay Round of GATT in 1994, new issues and WTO rules. There are about 21 items on this agenda, covering issues connected with what was agreed under Uruguay Round of GATT in 1994, new issues and WTO rules. Negotiations are still going on; The original deadline of 1 Jan 2005 was missed as was the next unofficial deadline of end Negotiations are still going on; The original deadline of 1 Jan 2005 was missed as was the next unofficial deadline of end 2006.

Main areas under negotiations NAMA – Non Agricultural Market Access – reduce & eventually eliminate high tariffs & non-tariff barriers – at stake industrial development needs, employment & livelihoods in developing countries ; NAMA – Non Agricultural Market Access – reduce & eventually eliminate high tariffs & non-tariff barriers – at stake industrial development needs, employment & livelihoods in developing countries ; Agriculture sector liberalization ( need for rural development & food security of developing countries, high tariffs, export subsidies and domestic support by EU & US) ; Agriculture sector liberalization ( need for rural development & food security of developing countries, high tariffs, export subsidies and domestic support by EU & US) ; TRIPS ( Trade-related aspects of intellectual property rights )- Public health & domestic development issues ; TRIPS ( Trade-related aspects of intellectual property rights )- Public health & domestic development issues ; Services sector liberalization ( covers almost all sectors and movement of personnel -skilled) Services sector liberalization ( covers almost all sectors and movement of personnel -skilled)

Related issues of concern Obligations of least developed countries, special and differential treatment of LDCs, less than full reciprocity principle, development needs of developing countries; Obligations of least developed countries, special and differential treatment of LDCs, less than full reciprocity principle, development needs of developing countries; Environment protection policies and trade; Environment protection policies and trade; WTO rules on regional trade agreements – differences of interpretation (this is also one of the pressures on ACP countries for accepting EPAs); WTO rules on regional trade agreements – differences of interpretation (this is also one of the pressures on ACP countries for accepting EPAs); Anti-dumping measures & subsidies – needs of developing countries and practices of OECD countries; Anti-dumping measures & subsidies – needs of developing countries and practices of OECD countries; A word about TRIMS & obligations already in force. A word about TRIMS & obligations already in force.

Implications of New Policies Shift from development cooperation to free trade; Shift from development cooperation to free trade; More competition between unequals; More competition between unequals; Equality of “access” (to international trade) does not mean equality of “opportunity”; [ unequal capabilities lead to unequal outcomes ] Adverse impact on development & employment – both in developing countries & in OECD countries; many developing countries will be forced to remain providers of natural resources and low value –low technology products; Adverse impact on development & employment – both in developing countries & in OECD countries; many developing countries will be forced to remain providers of natural resources and low value –low technology products; The policies that helped developed countries to develop are now considered trade distorting and hence to be done away. The policies that helped developed countries to develop are now considered trade distorting and hence to be done away.

Effects on Labour Downsizing, increasing workloads & job insecurity; Downsizing, increasing workloads & job insecurity; Weakening of public transport, health care systems, primary education, etc as public expenditure and role of Govt in these sectors declines; Weakening of public transport, health care systems, primary education, etc as public expenditure and role of Govt in these sectors declines; Growing informal economy – rural-urban migration as agriculture becomes non- viable for small farmers; Growing informal economy – rural-urban migration as agriculture becomes non- viable for small farmers; Deterioration of labour standards & social protection provisions; Deterioration of labour standards & social protection provisions;

Effects on Labour Weakening of TUs also thru new HR policies, outsourcing & preference for casual labour; Weakening of TUs also thru new HR policies, outsourcing & preference for casual labour; Trade Union memberships are declining Trade Union memberships are declining memberships range from 3% - 19%; Union density lowest in agriculture & informal economy dominated countries & declining in most countries; What else? Participants experiences What else? Participants experiences

Trade Union Concerns Where are the jobs? Has ‘Globalization’ process delivered on jobs front? Where are the jobs? Has ‘Globalization’ process delivered on jobs front? Issues–Not only unemployment but also, underemployment, low paid, exploitative & hazardous working conditions; Issues–Not only unemployment but also, underemployment, low paid, exploitative & hazardous working conditions; Youth (15-24 yrs) unemployment serious; for every unemployed adult, there are about 3-5 unemployed youth; Youth (15-24 yrs) unemployment serious; for every unemployed adult, there are about 3-5 unemployed youth; Jobs without rights – call centres, private services sector, SMEs in informal economy, EPZs and so on. Jobs without rights – call centres, private services sector, SMEs in informal economy, EPZs and so on. Workers Rights to organize? to bargain collectively? Workers Rights to organize? to bargain collectively?

So, what are TUs saying? Answer does not lie in Protectionism  Ensure Justice, Equity and Democracy in the new global order;  Need for role of State and public regulation of business and international trade;  Review of Free Trade – to re-focus on the objectives of Devt, Empl. & Poverty reduction – multilateralism rather than bilateralism.  Respect for basic International Labour Standards for promotion of Decent Work;  Representation & Participation of TUs in economic and social policy matters;

What is ILO saying? ILO’s World Commission on the Social Dimension of Globalization says – Global markets need ‘governance’ i.e. a set of institutions & rules for equitable functioning to: Avoid market failures (e.g., economic crises);Avoid market failures (e.g., economic crises); Redress vast inequalities between & within countries;Redress vast inequalities between & within countries; Strengthen mechanisms for delivering social protection - manage change.Strengthen mechanisms for delivering social protection - manage change.

Decent Work!!! Aimed at achieving the following strategic objectives: Creating Jobs – through opportunities for investment, entrepreneurship, wage employment & sustainable livelihoods; Creating Jobs – through opportunities for investment, entrepreneurship, wage employment & sustainable livelihoods; Guarantee Rights at Work of All workers; Guarantee Rights at Work of All workers; Provide basic social protection – against declining standards of living, marginalization & poverty; and Provide basic social protection – against declining standards of living, marginalization & poverty; and Promote dialogue & conflict resolution – the right to be heard, to negotiate and dialogue is the best way to solve problems peacefully. Promote dialogue & conflict resolution – the right to be heard, to negotiate and dialogue is the best way to solve problems peacefully.

ILO Declaration, ‘ Declaration’ is the threshold to Decent Work: a minimum social platform for the global economya minimum social platform for the global economy a promotional instrument for universal rights and the development agendaa promotional instrument for universal rights and the development agenda a common objective for the international communitya common objective for the international community

TUs support to Decent Work TUs support the integrated approach of ILO to address the social impacts of globalization: Because the concept of Decent Work - Focuses on core rights, addresses all workers, in all economic sectors (formal, informal);Focuses on core rights, addresses all workers, in all economic sectors (formal, informal); Is participatory, promotes Social Dialogue & seeks to involve all social partnersIs participatory, promotes Social Dialogue & seeks to involve all social partners Is Dynamic – progresses as the economy changesIs Dynamic – progresses as the economy changes

Trade Union Responses Mergers of trade unions – GUFs; Mergers of trade unions – GUFs; ITUC – merger of ICFTU, WCL & some other unions – on 1 Nov 2006, Vienna; ITUC – merger of ICFTU, WCL & some other unions – on 1 Nov 2006, Vienna; ITUC represents 306 affiliated national trade union centres of 154 countries & territories representing some 168 million members. Organize! Organize!

Trade Union Responses Campaign for core ILO labour standards, particularly – C 87 & 98; Campaign for core ILO labour standards, particularly – C 87 & 98; Global Collective Bargaining (GUFs have signed Codes of Conduct OR Framework Agreements with about 54 MNCs till now, covering over 4 million workers world wide); Global Collective Bargaining (GUFs have signed Codes of Conduct OR Framework Agreements with about 54 MNCs till now, covering over 4 million workers world wide); Build alliances with other social partners on mutually agreed agenda – links with world TU bodies, Women’s movement, NGOs where necessary, Consumer movement – role of international labour solidarity. Build alliances with other social partners on mutually agreed agenda – links with world TU bodies, Women’s movement, NGOs where necessary, Consumer movement – role of international labour solidarity. Using Workers Capital to promote Union Rights & other labour standards (not tried so far); Using Workers Capital to promote Union Rights & other labour standards (not tried so far);

Negotiating Change at National level … Ensure Right to Organize & Right to Collective Bargaining! Ensure Right to Organize & Right to Collective Bargaining! Adopt policies that apply to all workers & prevent further divisions of workers in the labour market – put all workers in one boat. Adopt policies that apply to all workers & prevent further divisions of workers in the labour market – put all workers in one boat. Set nationwide floor labour standards –that apply to all workers & employers (de-link labour standards from permanency of employment); Roof to be attained thru Collective Bargaining – the right to which should be ensured. Set nationwide floor labour standards –that apply to all workers & employers (de-link labour standards from permanency of employment); Roof to be attained thru Collective Bargaining – the right to which should be ensured.

Negotiating Change … What is the floor that employers should respect? What is the floor that employers should respect? Core labour standards of the ILO Core labour standards of the ILO  Freedom of Association –the right to form unions, the right to recognition  Right to Collective Bargaining  Basic social security contribution  Access to skills training  No discrimination, No child labour

Why Labour Standards? Labour Standards are not just a question of workers rights BUT are also means to promote economic growth! Labour standards create conditions for growth of domestic markets since they enable sharing in gains of growth & spread of purchasing powers – this makes domestic economic growth more sustainable.

Getting back to basics Getting back to basics Trade unions must strengthen their organizing and bargaining power. HOW? Challenge 1: Creating an “Enabling Environment” for Trade Union Activities Challenge 2: Building Capacity of Unions in Organizing and Collective Bargaining

Group Work How has Globalisation affected workers & trade unions in your country? How has Globalisation affected workers & trade unions in your country? [List the major changes in economic & labour policies that have affected (positively or negatively) the employment & Trade Unions] What actions has your trade union taken or can take to meet challenges of Globalization & free trade? What actions has your trade union taken or can take to meet challenges of Globalization & free trade? What role can the International Trade Union Movement play in assisting national unions to meet the challenges of Globalization? What role can the International Trade Union Movement play in assisting national unions to meet the challenges of Globalization?