A social dimension to ‘free trade’? TUC Strategies and the GATT Social Clause, 1973–1994.

The rise of ‘new generation’ trade agreements such as TTIP and CETA, the ongoing debates surrounding Brexit, and the Trump administration’s aggressive protectionism have seen the issue of trade move away from being merely the preserve of pro-liberalisation lawyers and economists towards a much more public debate on the social costs of free trade policies. Alongside this debate, trade unions and civil society organisations have taken to the streets to oppose free trade agreements in record numbers. Trade is most certainly now a mainstream issue. Nonetheless, such opposition has still failed to curb the overwhelmingly neoliberal tendencies of world trade in general. In this guest post, Andrew Waterman discusses efforts to include a social dimension in trade agreements.

Despite the recent boom in interest towards trade, the desire of trade unions to bring a ‘social dimension’ to trade liberalisation is not a new phenomenon. For example, the call for maintaining ‘fair’ labour standards in relation to trade liberalisation - referred to more commonly as a ‘social clause’ - has existed in its modern form since the first World Trade Conference in Havana in 1948. Furthermore, the trade-society nexus was to some extent solidified in the post-war era in the system of embedded liberalism which pushed for international trade liberalisation but allowed national governments the autonomy to protect key sectors of their economies, theoretically offsetting any negative consequences of trade liberalisation. Indeed, European trade unions have traditionally adopted a similar ‘yes, but…’ position which has ultimately become harder and harder to justify as world trade policies have become increasingly neoliberal in character.

It is the tension over offsetting the social costs of trade liberalisation that is the backdrop to my recent article ‘The Limits of Embedded Liberalism: TUC Strategies to Influence the Multi-Fibre Arrangement and the GATT Social Clause, 1973–1994’, published in Labour History Review, that analyses attempts by the Trades Union Congress (TUC) to resist the decline of the UK textile industry and introduce a social clause into the Multifibre Arrangement (MFA) and the GATT during the Tokyo and Uruguay negotiating rounds.

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Due to its industrial and political strength in the 1970s, the TUC was actually able to have a significant impact on the direction of the world textile industry in this period through supporting a policy of strong import controls, which was backed by the Labour government both domestically and as a member of the EEC bloc during the GATT and MFA negotiations. In this context, calls to introduce a social clause were present in the TUC’s strategy even at this stage but were often subjugated to more pressing national economic concerns. Nevertheless, the notions of solidarity that are present in the concept of the social clause played an important role in framing the legitimacy of the issue beyond self-interested economics alone even though underlying suspicions of latent protectionism remained.

As the 1970s drew to a close, the changing structural dynamics of the world economy had an acute effect on the TUC’s strategic choices which were, broadly speaking, firmly based on the ideas of embedded liberalism and British corporatism. However, the article also argues that

“the compromise of embedded liberalism also constituted a wider historic compromise between labour and capital that could not remain indefinitely. Unprecedented economic growth and the specific social, economic, and political conditions of the post-war period provided the ‘space’ in which labour could draw concessions from capital. Once these conditions disappeared… then the whole basis of the TUC’s strategic perspective was also undermined”.

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Whereas the 1970s saw the TUC have significant influence over Labour Party policy and direct access to the Department of Trade and Industry during Labour’s time in power, the 1980s and 90s saw the TUC (and the wider labour movement) increasingly ostracised and unable resist the rise of neoliberalism and the restructuring of the UK and world economy. In an increasingly hostile environment at home, the TUC and the wider UK labour movement gradually shifted their focus to the European level, but this did little to challenge the ongoing shift from embedded liberal to neoliberal policies. Though textiles remained one of the most protected sectors for decades after the GATT Tokyo Round, the TUC and other trade unions found it increasingly difficult to halt the march of liberalisation, much to the detriment of textile workers across the world. Although structural dynamics clearly played a huge role, the TUC had no class perspective of such ongoing changes and limited its strategy to influencing elite actors, as it had done in the 1970s and earlier. 

Whilst this may have worked in the context of the post-war consensus and embedded liberalism, in the 1980s, when class antagonisms were at their peak, mobilising the power of rank-and-file members to fight for a radical reassessment of global trade and textile policy could have been one way in which the TUC opposed the decline of the industry. In reality, the TUC’s congress reports from this period make no mention of any industrial action taking place and note only two small demonstrations opposing further attacks on the sector. This inability to strategically adapt to the hostile forces of neoliberalism and unwillingness to mobilise the class power of the labour movement has ultimately limited the TUC’s capacity to influence the current direction of world trade in contrast to its role in the 1970s.

As the current debate about the importance and direction of world trade continues to gather pace, it is important that researchers and trade unions analyse past methods and decisions as a means of understanding and influencing the present. Without the decisive input of labour into this debate, capital will continue to dominate the global trade agenda with corresponding costs for living standards, workers’ rights, and the environment.

Andrew Waterman is a doctoral student at the Centre for European and International Studies Research at the University of Portsmouth