From the TUC

Is there a secret union plot to end world trade? No.

09 Jan 2009, by in International

Jagdish Bhagwati, university professor, economics and law, at Columbia University in the USA, has started to froth at the mouth (in the Financial Times) about a secret plot he’s discovered by trade unions to end world trade as we know it. Apparently many of President Elect Obama’s people are in on it. And for all I know, he thinks the Bolsheviks and the Martians are too. So let’s set the record straight yet again (it won’t be the last time). Unions support free trade, and wanting that trade to be fair, and just, is not a secret plot, it’s as open and honest as we can get (I often demonstrate the commitment of UK unions to globalisation – if not some of its effects – by pointing out that our largest union, Unite, once spent an entire year campaigning for a Chinese company to take over Britain’s last domestically-owned volume car manufacturer, Rover, precisely because that would keep the factory open and some people in jobs – the very antithesis of protectionism).

We mean what we say – we want trade competition to be based on skills, quality, efficiency and, yes, different wage levels as long as they persist. But we don’t want it based on slavery, child labour, sexual or racial harassment or the repression of free trade unionism. Apparently, those things are ok with Professor Bhagwati – they’re just ‘competitive advantage’.

Bhagwati’s argument is that we’re all secretly trade protectionists who want to pull up the drawbridge and stop foreign goods and services reaching our shores. He says:

“labour union lobbies and their political friends have decided that the ideal defence against competition from the poor countries is to raise their cost of production by forcing their standards up, claiming that competition with countries with lower standards is ‘unfair’. ‘Free but fair trade’ becomes an exercise in insidious protectionism that few recognise as such.”

So, first, as I say above, what unions mean when they say they want trade agreements to include binding legal requirements on labour standards, we mean we don’t want it to be possible for country A to obtain a competitive advantage in the market place over country B by breaching the core labour conventions of the International Labour Organisation (ILO) – which ban slavery, child labour, discrimination at work and which require that people be free to join trade unions and bargain freely with their employers over their terms and conditions. People like Professor Bhagwati never say which of those core labour standards they think are unacceptable (so maybe it’s he who has a secret agenda, huh?) but we in the trade union movement are willing to be generous and assume he’s mostly hostile to freedom to join a union and bargain collectively. It’s possible, however, because he doesn’t say, that he thinks slavery, child labour and discrimination are ok too – here’s his chance to clear that up.

The suggestion that trade union calls for such core labour standards to be integrated into trade agreements constitute “insidious protectionism that few recognise as such” is just a version of persecution mania. Only Professor Bhagwati gets it, see, and everyone else is just a dupe. Doh! Over the last four years that I have been involved in this area, I haven’t yet come across a single person who hasn’t heard the argument he advances that core labour standards are a form of protectionism. Some of them agree with him, some of them don’t, but suggesting that people don’t understand the argument is just baloney. If this is our secret plot, it is the worst kept secret in world history!

Bhagwati also argues that core labour standards are unfair to poor, weak economies. In fact, most of the countries that the US has made bilateral trade agreements with have ratified more of the ILO’s core labour conventions than the mighty US of A, and in the case of the US-Peru free trade agreement, some US employers even argued against the inclusion of the clauses because they could be used against the US!

But it’s an interesting question: why do so many governments of countries which are full members of the ILO, and therefore bound (whether they have ratified the conventions explicitly or not) to uphold the ILO core labour standards, refuse to write them into bilateral or multilateral trade agreements? Well, Professor, it’s because they aren’t really committed to opposing slavery, child labour and discrimination, or supporting their peoples’ rights to join a union or bargain freely with employers. And yes, it IS because they fear that if their people can join trade unions and bargain freely, they will get richer – but it’s not the impact on trade that they’re worried about, it’s the impact of higher wages for the masses on the rich people who run these so-called poor countries.

And that, finally, brings us to the key case study Professor Bhagwati mentions in his article – Colombia. The US trade union movement and many Congressional Democrats have opposed a free trade agreement between the US and Colombia until Colombia implements in practice the freedom to join a trade union (by, and here’s the nub, not allowing so many trade unionists to be murdered by gunmen who, if they are ever actually identified, are never punished). Refusing to ratify the free trade agreement doesn’t save a single US job whatever you believe, because Colombian goods and services already have all but free access to the US (indeed, if anything, the free trade agreement would open Colombia more to US goods and services). But it might save some Colombian trade unionists’ lives.

That’s our agenda for fair trade, Professor Bhagwati, and there’s no secret about it. Now, what’s your agenda?