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18 Nov 2002 : Column 427—continued

7.1 pm

Mr. Colin Challen (Morley and Rothwell): I want to focus on the very last sentence in the Queen's Speech, in which the Government pledge themselves to

I heartily endorse that aspiration, but I have some thoughts about whether success is around the corner.

The word Xsuccess" is highly relative in the context of trade liberalisation. If one harks back to the days of President Reagan, whose economic policies were based on an idea of wealth trickling down to the poor through market mechanisms rather than Government action, one may suppose that a little success has been achieved, as Governments seem to be surrendering more of their economic powers to the market. Our aspirations for lasting gains from trade will wither, however, unless we assert more strongly the human values that are meant to underpin the benefits that are meant to accrue from trade liberalisation. All too often, the terms of the debate have been set by business interests well before they enter mainstream discussion. There is far too much secrecy in the build-up to major negotiations and far too much privileged access to negotiations: our governmental involvement with a private sector committee on the liberalisation of trade in services—LOTIS—is one example of that. Not only do such shadowy groups exist to advance their own agenda, but they discuss ways of attacking their critics.

In a democracy, however, we can be sure that there will be public debate, even if it seems unbalanced at times. Talking in a roundabout way about how the British worker must seize the opportunity to downsize his or her pay packet, Digby Jones, director general of the CBI, recently told us how the Government had got our competitive position all wrong. He said that the Prime Minister is too focused on competing inside the European Union and that we should concentrate on getting the upper hand in competing with the likes of China. To many people, that might sound like very good sense. After all, China is a semi-industrialised nation with one fifth of the world's population, many of whom are skilled. Of course, what Mr. Jones meant was that we have to compete with what is euphemistically described as a flexible labour force—a labour force that is low paid and has low benefits, low pensions and all the rest that

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is implied by Xflexibility". Needless to say, with the stock market currently failing to live up to its promise, low pensions are already here in abundance.

The time has come to take stock of what China's accession to the World Trade Organisation means for world trade. Its entry into the utopia of world trade liberalisation will have far-reaching consequences, not least for the Chinese. One issue on which I do not imagine the trade negotiators spent much time was China's human rights record. I am sure that they believe that, trade liberalisation being the panacea it is, all ills will be cured in time—the positive engagement myth that western countries have embraced since the Tiananmen square massacre. Positive engagement is the flip side to Reaganomic trickle-down, on the basis that unrestrained capitalism cures all if it is left to its own devices and that it must be left to its own devices above all else.

Today's China, with its endemic corruption and secretive, undemocratic Government, offers capitalist enterprise a land of many marvellous opportunities. The country has only one official trade union, the All-China Federation of Trade Unions. The evidence is clear that the absence of independent trade unions in China is a major boon to foreign investors. Here is a country where demands to be paid outstanding back pay, never mind a decent wage, can be crushed with the help of the police and the army, and where the suppression of the work force goes without comment elsewhere in the world. I have not heard of any WTO factotum speaking on the subject, and all that we hear from anybody else in authority is the usual positive engagement routine, saying that one day all will be well.

The right to join an independent trade union is not very high on the WTO agenda. Indeed, the issue is not on its agenda at all, since it says that labour issues are a matter for the International Labour Organisation and have been since at least 1996, when the ministerial conference in Singapore decided that the WTO should not have anything to do with them—I bet that our then Government's representative went along with that all right. That separation of responsibilities is very revealing, since the WTO has many powers to enforce the resolution of trade disputes, but the ILO, wonderful body that it is, has to rely on persuasion.

As always, labour is the underdog. In China's case, the underdog is now represented at the ILO by a representative of the All-China Federation of Trade Unions—in other words, a representative of the Chinese Government, as the two are components of the same machine. How does the federation see its role in protecting workers' rights? The following example of official Chinese trade union thinking, taken from the World Tibet Network News website, gives a mind-numbing flavour:

The job of those cadres is presumably to tell the people of the Tibetan region—Tibet appears no longer to be a country—that they should be grateful that they have

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such enlightened employers or, as they are often told, that they are indeed the masters themselves. They may also be told that if they try to organise themselves, as workers at the Tianshui City Auto Transport Company did when hundreds of them were being made redundant, they could face imprisonment of 10 years to life. They may also be told that their right to strike was abolished in 1982 because Chinese businesses belong to the people.

Today's newly appointed leader of China, Hu Jintao, described the role of the trade unions thus in 1998:

Hu Jintao enjoins trade unionists consciously to accept the leadership of the party and consciously to submit to and serve the party and the state—a state whose central Chinese Communist party committee now accepts wealthy capitalists among its membership. No wonder that those who consciously seek to challenge the party and the state come off so badly; they will always be underdogs while they have no right to strike, no freedom of association and no right to organise independent trade unions.

Scores, possibly hundreds, of industrial disputes have led to public demonstrations in China this year and every year for the past decade. The closure of older industrial activities has made millions unemployed, but has also lined the pockets of asset strippers. An example is the fate of the 2,000 workers—mostly middle-aged women—employed at the Shuanfeng textile factory who went on strike. The police dragged them by their hair and jabbed them with cattle prods during a factory occupation. These workers had been forced to buy shares in their own company on pain of losing their jobs. Last November, the company had gone bankrupt, but was started up again by the same bosses, offering half the wages.

The owners, unlike their workers, were at least freed of their previous debts.

Mr. James Gray (North Wiltshire): What has this to do with the Queen's Speech?

Mr. Challen: If the hon. Gentleman is patient, he will find the answer at the end of my speech.

Such bankruptcies—fake bankruptcies—are common in China. The Ferroalloy plant in Liaoyong province is another example. The average wage was $150 a month for technicians, when they were paid. Corrupt management issued false reports of inflated profits to pay themselves bonuses. Members of the management did so while working in collaboration with the provincial people's congress chairman, Gong Shangwu.

It all sounds pretty familiar, does it not? Supplant Ferroalloy with Enron and Shangwu with a former governor of Texas, and we can see the parallels clearly. As Ferroalloy faced bankruptcy, the workers tried to organise themselves and expose the misdeeds of the management. For their pains they were met with riot police, under-cover police, plain-clothes police, road blocks and paramilitary troops. The entire panoply of state oppression was there to greet them whenever they wanted to organise or demonstrate. These events took place in March and have been fully documented, along

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with other cases, by human rights watch. They were not fully documented by the local newspapers, of course, since they were told not to report them.

Is that what is meant by having a flexible labour force, against which, according to the CBI's Digby Jones, we must compete? Is it right that we should permit without question China's membership of the golden WTO club, the express concern of which is not to interfere with the comparative advantage of low pay, long hours, poor working conditions and the crushing of independent trade unions that challenge these iniquities? Will the Government call for real teeth for the ILO so that it can impose its sanctions with the same force as the WTO? Will countries that fall foul of the ILO face financial penalties? Or will we be told that insisting on the same standards as we seek to apply at home is an outdated mode of protectionist thinking?

If the WTO or the global business community believe that a nation's comparative advantage may reside in its ability to suppress working conditions and oppress workers, we should pursue a vigorous policy of elevating workers' rights to the same high altitude as is already enjoyed by the free marketeers. Our emphasis in future negotiations should elevate people above property. The current emphasis on the trickle-down approach and positive engagements must give way to a stricter international regime that supports human rights.

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