The purpose of this blog is to provide analytical commentary on formal and informal labour organisations and their attempts to resist ever more brutal forms of exploitation in today’s neo-liberal, global capitalism.

Tuesday, 18 December 2012

Trade unions, free trade and the problem of transnational solidarity

Tensions between European trade unions and unions from the Global South over international free trade developed into an open confrontation during the talks over the revival of the WTO Doha round in 2008. On the one hand, the European Metal Workers Federation (EMF) joined forces with the European Automobile Manufacturers’ Association (ACEA) in the publication of two joint press releases demanding reciprocal market access in developed, emerging and developing countries. On the other, this led to an angry response by trade unions in the Global South and here especially the Confederation of South African Trade Unions (COSATU). The EMF was accused of undermining workers’ solidarity, since their co-operation with European employers in demanding equal market access would imply job losses in the Global South and undermine the internal unity of the International Trade Union Confederation (ITUC) (Bieler 2012: 9).

The WTO Doha negotiations have stalled for years. And yet, free trade agreements (FTA) continue to be pushed in bilateral negotiations by the USA and the EU with developing countries and emerging markets. Importantly, these FTAs no longer only concern trade in manufactured goods, but as part of an expanded trade agenda now also include issues of intellectual property rights, trade in services and investment. Unsurprisingly, the tensions within the international labour movement persist. In this contribution, I will discuss the obstacles but also possibilities for establishing transnational solidarity in relation to tensions over trade liberalization.

Liberal economic theory and developmental reality

by Christopher Dombres
In order to understand such tensions over free trade policies, the historical dynamics of capitalist accumulation need to be conceptualised. In a liberal understanding of capitalist development, free trade is regarded as a win-win situation, a positive-sum game. As David Ricardo famously argued, if every country concentrates on producing and exporting what it is best at, i.e. on its comparative advantage, and imports all the other necessities, an optimum outcome with everybody benefiting will be the result (Ricardo 1817). Neo-liberal economic thinking about the extension of free trade in times of globalisation builds on this understanding. States should refrain from intervening into the economy and deregulate and liberalise markets including the labour market in order to facilitate free trade. If developing countries open up to free trade and foreign direct investment, development would follow and allow them to catch up with developed countries. However, reality has unmasked the false promises of liberal economic thinking. In a study by the NGO War on Want, it is illustrated that global economic growth in the 1980s and 1990s, the time of neo-liberal globalisation, was slower than in the 1960s and 1970s. Moreover, ‘the number of people unemployed and the number in unstable, insecure jobs has actually increased – from 141 million to 190 million (1993 to 2007) and from 1,338 million to 1,485 million (1997 to 2007) respectively’ (War on Want 2009: 4). Developing countries have been the main losers of this period. Trade liberalization often implied deindustrialisation and import dependence for them. An analysis of the consequences of trade liberalisation in Africa and Latin America during the 1980s and 1990s reveals widespread job losses, increasing unemployment and declining wages in both continents (War on Want 2009: 5-13).

Workers in industrialised countries have been predominantly employed in high-valued added, high productivity production processes. Moreover, from 1945 onwards they have made significant achievements within national social pacts. In exchange for accepting capital’s prerogative over the organisation of the work process and the private ownership of the means of production, they were allowed to participate in increasing profits through rising wages and expansive welfare states. Increasing export through free trade agreements implied directly secure jobs and higher wealth levels for workers. By contrast, workers in the Global South have not experienced these positive dynamics. They have mainly been integrated into the global economy as exporters of agricultural goods and raw materials. Where there has been a diffusion of manufacturing especially since the 1970s, it has often been in the area of labour intensive industries, areas characterised by low productivity. Even China, often hailed as a success story of development by liberals, continues to rely on its vast army of cheap labour in order to remain competitive. Moreover, while there has been a convergence in the importance of manufacturing output for national economies between the Global South and industrialised countries, this has been in a declining sphere of economic activity. With services becoming ever more important for the generation of wealth, it is no surprise that income inequalities between developing and developed countries have remained. At the global level, therefore, free trade links countries in the core, which export high productivity/high-value added goods and increasingly services, with countries in the periphery, the exports of which are based on low productivity. As Ernest Mandel argued, ‘on the world market, the labour of a country with a higher productivity of labour is valued as more intensive, so that the product of one day’s work in such a nation is exchanged for the product of more than a day’s work in an underdeveloped country’ (Mandel 1975: 71-2). Hence, countries in the periphery have become locked into relations of unequal exchange in which surplus value is transferred from the periphery to the core. This has resulted in an intensified polarisation between countries in the core and countries in the periphery.

In short, capitalist development has been highly uneven and so-called ‘free trade’ policies have extended this unevenness. Free trade is only one component in the process of uneven and combined development. And yet, especially after the expansion of the trade agenda during the GATT Uruguay Round and the WTO Doha negotiations into areas of intellectual property rights, trade in services and investment, free trade has taken up an ever more central position in the current attempt to continue the accumulation of surplus value on a global scale. In a way, the expanded free trade agenda is a mechanism of reconstituting the exploitative relationship between the core and periphery afresh.

Free trade and transnational labour solidarity

by Alejandra H. Covarrubias

As a result of this unevenness, different national trade unions are in different positions within the global capitalist social relations of production. Unsurprisingly, although workers from around the world are exploited in the capitalist social relations of production based on wage labour and the private ownership of the means of production, this does not automatically imply that it will be in their immediate and obvious interest to join forces. Transnational solidarity between national labour movements in relation to free trade policies is anything but automatic. As indicated above in the example of the WTO Doha negotiations in 2008, this expanded free trade agenda has led to tensions within the global labour movement. On the one hand, trade unions in the North especially in manufacturing have supported free trade agreements. They hope that new export markets for products in their sectors will preserve jobs. On the other, trade unions in the Global South oppose these free trade agreements, since they often imply deindustrialisation and the related loss of jobs for them. Transnational solidarity is difficult to achieve as a result.

And yet, the fact that different national labour movements are located in different positions in the global economy does not imply that transnational solidarity is impossible. The experience of trade unions in the Americas is illustrative in this respect. When the North American Free Trade Agreement (NAFTA) came into force on 1 January 1994, there was no common trade union position. While the Canadian Labour Congress had been opposed, the main Mexican trade union confederation supported the agreement. The US trade unions presented a mixed picture. As a result of experiences with NAFTA, however, a common position has emerged over time. This new position does not only include a rejection of neo-liberal free trade agreements such as the defeated Free Trade Area of the Americas (FTAA) initiative. As Bruno Ciccaglione, the European co-ordinator of the Seattle to Brussels Network makes clear in his report, it also ‘seeks to design a model of integration that is an alternative to free trade, not only because it proposes alternative trade rules, but because it aims at moving away from neoliberalism by giving a new centrality to the State, and to a new democratic and participatory process’ (Ciccaglione 2009: 30). The related strategies include both cross-border co-operation with trade unions as well as alliances with other social movements and, thus, provide the basis for a common consciousness at the transnational level. Hence, as a result of concrete struggles against free trade initiatives in the Americas, labour has moved towards transnational solidarity. Such forms of transnational solidarity may in turn provide the basis for developing new ways of how trade is organized between countries. The Bolivarian Alliance for the Americas (ALBA), for example, is already one practical example in this respect. At its beginning in 2004 was a treaty between Venezuela and Cuba with the former providing petroleum to the latter at very favourable prices in exchange for doctors and teachers from Cuba, working in some of Venezuela’s poorest states. Direct negotiations between the two countries had replaced a reliance on prices set by the market.

by saguayo
Global North and Global South, core and periphery are not fixed categories, but are constituted and re-constituted by concrete social relations. In response to the global economic crisis, working relations are increasingly becoming informal in industrialised countries too. There is also an increase in low wage service sector jobs. In other words, the traditional Global South is also emerging in the Global North, the periphery in the core and the clear boundaries are disappearing. The realisation by workers in the North that further free trade actually also requires further deregulation and liberalisation in the North and is, thus, harmful to them too may provide the ground for more active transnational solidarity. Samir Amin, the keynote speaker at a workshop on Trade unions, free trade and the problem of transnational solidarity, held at the Centre for the Study of Social and Global Justice (CSSGJ) at Nottingham University on 2 and 3 December 2011, demanded ‘audacity, more audacity, always audacity’ in the search for alternatives, including a move towards delinking from today’s neo-liberal globalisation. This would allow nations with advanced radical social and political struggles to move towards a process of socialization of the management of their economy. Moreover, ‘delinking promotes the reconstruction of a globalisation based on negotiation, rather than submission to the exclusive interests of the imperialist monopolies. It also makes possible the reduction of international inequalities’ (Amin 2011: 28). Provided such calls for audacity are heard and delinking is put into practice, relations of transnational solidarity between labour movements in the Global South and North are possible.

[This post was initially published by the Global Labour Column on 13 November 2012.]

Prof. Andreas Bieler
Professor of Political Economy
University of Nottingham/UK
Personal website:
18 December 2012

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