31. Memorandum submitted by the Trades
Union Congress (TUC)
INTRODUCTION
The Trades Union Congress represents 70 affiliated
organisations with a total of nearly 6.8 million members. Members
of TUC affiliated unions are employed in a wide range of trades
and professions. The TUC takes an active interest in international
affairs and is affiliated to the International Confederation of
Free Trade Unions (ICFTU), the European Trade Union Confederation,
the Trade Union Advisory Committee to the OECD and the Commonwealth
Trade Union Council. We work with them, the Global Union Federations
and sister organisations around the world to promote human and
workers' rights and sustainable development.
The TUC welcomes this inquiry and the opportunity
to contribute its views. Our submission will focus on the general
question that the Committee has expressed interest in addressing,
namely, who gains from trade and trade liberalisation, and what
might be done to maximise the impact of trade on poverty reduction
and progress towards the Millennium Development Goals. However,
we will also provide observations on some of the specific issues
that have been highlighted for attention. This submission is supported
by the ICFTU.[79]
THE DOHA
"DEVELOPMENT ROUND"
While the TUC welcomed some of the outcomes
of the Doha Ministerial Conference, most notably the agreement
on TRIPS, we do not subscribe to the view that it launched a "development
round". The World Employment Report 2001 estimates that the
1.2 billion absolute poor are almost entirely supported by the
earnings of the 500 million workers among them. These workers
do not earn enough to keep themselves and their families from
impoverishment. The impact of trade on poverty reduction and its
role in making progress towards the Millennium Development Goals
will be limited until the working poor have rights that allow
them to attain decent conditions at work which will enable them
to work their way out of poverty.
The fact that WTO members at Doha formally recognised
the relationship between trade and development, and agreed to
initiate negotiations to clarify the relationship between Multilateral
Environmental Agreements and WTO rules, yet actively blocked any
meaningful discussion on fundamental workers' rights seemed perverse
to millions of working people.
THE DEVELOPMENT
AND POVERTY
DEBATE
In recent years the discussion on development
and poverty appears to have focussed on those living in absolute
poverty. It is right that that priority be given to helping those
in greatest need. That is why the TUC supports the Millennium
Development Goals. However, it is important not to lose sight
of the fact that poverty has a multifaceted character and is a
relative concept. While energies must be devoted to tackling absolute
poverty, we must be careful not to neglect the fact that in many
countries, including in industrialised ones, inequalities in the
distribution of wealth and income leave a significant proportion
of the population living in conditions which are unacceptably
low by comparison to the national average. Their development,
and how trade policies affect their circumstances, also need to
be considered.
Poverty prevention is also often as important
as poverty reduction. More equitable patterns of growth and distribution,
and employment security help mitigate against extreme poverty.
The Committee will of course be familiar with
the UNDP's analysis of human development which is largely built
on work done by Amartya Sen. This view of development is broad
and integrated, encompassing both civil and political liberties
and economic and social rights as primary goals of development
and the principal means of progress. This is a view we share.
Against this background, employment creation,
and fundamental rights enabling workers to redress the imbalance
of power in economic relationships (and thus promote more equitable
wealth distribution) are absolutely crucial to the success of
poverty reduction strategies.
TRADE, EMPLOYMENT
AND POVERTY
REDUCTION
Trade has come to be seen as a key means of
alleviating poverty. Indeed, some industrialised country governments
have claimed that trade matters more than aid and have used this
as a justification to cut back on their overseas aid budgets.
This is a strategy which the TUC considers lamentable and we applaud
the Department for International Development for working towards
increasing the UK aid budget, though of course we have some way
to go before attaining the 0.7% target.
Trade clearly can provide opportunities for
poverty reduction and the improvement of living standards. However,
emphasising trade liberalisation and promotion without adequate
attention to social safeguards can be counterproductive. Trade
liberalisation measures have frequently been accompanied by deregulation
and privatisation which have not necessarily been consistent with
development and poverty reduction.
The impact of trade liberalisation on the level
and structure of employment is important in determining its impact
on poverty, wage and income distribution and on the quality of
employment. Research by the ILO indicates that the efforts of
developing countries to benefit from the liberalisation of world
trade requires essential support from the right national economic
and social policies and institutions. The framework of institutions
and rules within which labour markets function is one of the most
important determinants of whether patterns of growth favour the
employment and income-earning opportunities of the poor.
Democratic, transparent and competent governance
is fundamental. Respect for the core labour standards[80]
is an essential element for this. Without this foundation, the
economic gains that are realised from trade liberalisation are
unlikely to be equitably distributed.
Freedom of association is an indispensable element
of civil and political liberties that underpin a democratic and
transparent political system. Along with the right to collective
bargaining, it constitutes a counterbalance to unequal economic
power and can bring about more equitable distribution of the benefits
of economic growth. There are also economic arguments for respecting
the core standards. Elimination of discrimination and child labour
makes for more efficient allocation of human resources and builds
the human capital that will be needed to compete in the new knowledge-based
economy.
The core labour standards, particularly the
elimination of discrimination, are also important for promoting
gender equality. While the expansion of international trade has
generated employment opportunities for women in certain circumstances,
trade policies have often served to entrench the traditionally
inferior role assigned to women in many countries. Occupational
segregation, pay inequality, and unequal access to resources are
but a few of the discriminatory measures that women face. The
rise of Export Processing Zones where large numbers of young women
labour in often poor and dangerous conditions, and the expansion
of outsourcing and home-based employment have also raised new
issues for women workers. Implementation of the ILO's employment
equality Conventions should compliment the core labour standards.
The ILO is not alone in concluding that affording
workers fundamental rights benefits the poor. Also of interest
is a study for the OECD on inequality in Latin America by the
economist James Robinson ("Where does inequality come from?
Ideas and Implications for Latin America" OECD Development
Centre, 2001) which came to the conclusion that it has been the
political attack on unions and democratic institutions that have
had the main impact in terms of increased inequality in that part
of the world.
In the light of the above, the refusal of WTO
members to consider the link between trade and labour and to establish
formal co-operation with the ILO in order to promote respect for
fundamental workers' rights, is an obstacle to making trade work
for the poor.
The TUC is not arguing for the WTO to take on
the role of implementing labour standards. This is the preserve
of the ILO. However, the fact is, the WTO regime is not just about
cross-border trade issues. It also has an impact on domestic regulation
and legislation which has led to workers' rights being undermined.
The WTO functions within a framework of international institutions
and instruments. Yet, in effect, trade rules take precedence due
to the WTO's strong dispute settlement procedures, giving the
organisation unwarranted influence over other policy areas.
For international trade to benefit the poor
and the majority of people, coherence is needed between the WTO
and other international institutions such as the ILO to ensure
that trade does not nullify other legitimate public policy objectives.
WTO agreements must be explicitly subordinated to the human rights
and fundamental freedoms contained in international human rights,
labour rights and other conventions.
SPECIFIC ISSUES
HIGHLIGHTED BY
THE INTERNATIONAL
DEVELOPMENT COMMITTEE
Agriculture and market access
In the run-up to the Doha Ministerial Conference,
the ICFTU and TUC called for increased stable and predictable
market access for developing countries to industrialised country
agricultural markets, at the same time as enhanced measures to
promote poverty alleviation and food security in developing countries,
and to ensure that food aid in no way damages local food production
in recipient countries. In relation to the last point, the TUC
welcomes the European Union policy of sourcing food regionally
to avoid distorting local markets and to maximise the income flowing
to the region.
It is important that Northern agricultural subsidies
do not lead to the impoverishment of local communities or a crisis
in food security in developing countries. It should be pointed
out however that food security is a right of all people wherever
they may live and that sustainable agriculture is a goal that
should be pursued by all countries. While trade distorting subsidies
that lead to poverty and endanger food security in developing
countries should be identified and reformed, there is, in our
view a good argument for supporting and encouraging sustainable
farming practices and countryside stewardship in the UK and EU.
The capacities of developing countries
There is broad agreement that the liberalisation
of agricultural trade would increase the demand for agricultural
products from developing countries, thus increasing their share
of the gains from the expansion of world trade. However, increasing
market access alone is unlikely to be sufficient since part of
the problem lies on the supply side. Many of the developing countries
have been unable to benefit because they have been unable to shift
their export base away from primary commodities to exploit the
rapidly growing demand for manufactured exports. Many have failed
to develop the physical infrastructure and the skills base necessary
for the development of manufacturing. Market access needs to be
complimented by programmes of external assistance to overcome
these constraints in the least developed countries.[81]
The education and training of workers is a clear priority as low
levels of education and skills in the labour force constitute
a basic barrier to industrial development.
With regard to enhancing the negotiating capacities
of developing countries and improving their ability to take advantage
of increased opportunities to trade, we welcome efforts to assist
and build capacity undertaken by the UK government and the European
Commission. However, it is worth pointing out that the nature
of such assistance and capacity building is important. Such programmes
should assist developing countries to arrive at a position where
they are able to evaluate a variety of policy options and to decide
on policies which bring the greatest benefit to their people rather
than accept the conventional wisdom. In addition, in the interest
of democracy and transparency, there is a strong case for strengthening
the trade policy capacities of representative civil society organisations
such as trade unions in developing countries.
TUC
January 2003
79 The ICFTU was set up in 1949 and has 231 affiliated
organisations in 150 countries and territories on all five continents,
with a collective membership of 158 million. Back
80
The core labour standards are: freedom of association and the
effective recognition of the right to collective bargaining; the
elimination of all forms of forced or compulsory labour; the effective
abolition of child labour; and the elimination of discrimination
in respect of employment and occupation. They are also sometimes
referred to as fundamental workers' rights. Back
81
Paper for the Two Hundred and Eighty Second Session of the Governing
Body, GB.282/WP/SDG/2. Back
| 
