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Opinion

Reform or Bust – No WTO without workers’ rights for fair competition

WTO

Dr Ngozi Okonjo-Iweala, Director-General of the World Trade Organisation

Sharan Burrow, General Secretary, International Trade Union Confederation and Phil Bloomer, Executive Director, Business & Human Rights Resource Centre

Hope for reform of the WTO has been hidden in the shadows since the Battle of Seattle at the 1999 WTO Ministerial brought attention to workers’ rights, sustainable economies and environmental and social concerns.

Twenty years on reform of the WTO is back on the negotiating table, backed by a renewed public consciousness that human and labour rights matter. The COVID-19 pandemic has laid bare the fault lines of the world’s economy, fuelled even greater inequality, and revealed the weaknesses in global supply chains. The ITUC and the Business & Human Rights Resource Centre have both tracked and exposed this worsening exploitation of workers.

The widespread opposition to multilateralism and global trade is born of a frustration the system has failed in many cases to deliver secure jobs, decent work and opportunities to overcome inequality and exclusion. Reform of the WTO will be judged on whether it delivers a new model for global trade and development where jobs, rights, fair wages and social protection are the foundations.

Development models without the dignity of decent work are not fit for purpose. Economists seem to have forgotten that developed economies were built on industrial policy and jobs with minimum and skilled wages delivered through legislation and/or collective bargaining. The WTO, by pushing a liberalised global trading system, has denied countries in the global South the freedom and opportunity to pursue their own development priorities through domestic regulation and pro-labour reforms.

Our system of trade has given rise to global supply chains, which in too many cases obscure the reality of dehumanising exploitation. While the wealth of billionaires and global corporations soars, our global labour market is broken with 60% of the world’s working people struggling to survive in informal work with no rights, no minimum wage and no social protection. Even the 40% of working people in the formal economy feel increasingly vulnerable as increasing numbers are employed on precarious contracts and paid wages on which they cannot live and raise a family. Modern slavery in the form of forced and child labour continues to exist as governments and corporations fail to protect people from lives of abusive exploitation where no rights and no rule of law prevail, as KnowTheChain has revealed. Corporations prioritise their profits and their competitive advantage, while governments have been reluctant to regulate corporations to ensure human rights are protected.

Meanwhile, some developing countries have held on to the orthodoxy that labour rights and minimum living wages constrain growth and will frustrate their ambitions to attract foreign direct investment and maximise trade. And 80% of countries in the ITUC Global Rights Index violate the right to collective bargaining.

This is a model of exploitation and labour arbitrage, not a model of development and growth. To change the model requires us to accept that wealth must be shared, that human and labour rights are the only protection against exploitation, and that minimum wages and collective bargaining are the building blocks of secure economies. The political will for this change has been supercharged by people’s experiences of the global pandemic.

ITUC research across eight countries shows the impact of investing the equivalent of just 1% of GDP in social protection provides:

  • positive returns on the economy overall, stimulating growth;
  • increased productivity and overall employment;
  • increased tax revenues;
  • more effective poverty alleviation; and
  • reduced barriers to women entering or returning to work.

In addition, the report shows that increased investment in social protection can yield between 0.7 and 1.9 times its value in economic returns. This means the economic benefits of social spending can partially or completely offset the costs.

The case for reforming our economies to better protect people and planet is overwhelming and urgent. As the world talks of reform of the WTO and global trade, the choices are stark. Do countries work together to rebuild trust based on decent work with human and labour rights as a floor for fair competition? Do they introduce environmental standards to protect and repair damaged ecosystems destroyed by resource exploitation and pollution? Or will corporate greed and the failed orthodoxy continue to impede the development model people want?

Building trust in the global governance of trade has to be a cornerstone of rebuilding trust in democracy. For working people this means the WTO rules must change. A labour committee must be established along the lines of the environment committee, with a voice in the discussion of rules and a system of compliance that facilitates justice for those exploited. The ILO should be given a primary and definitive role in assessing labour abuse to guard against any protectionist misuse. The ITUC is demanding a future in which trade rules respect human and labour rights. This requires:

  • the inclusion of human and labour rights in the opening paragraph to the Marrakesh Agreement;
  • the establishment of a working group on labour issues equivalent to that existing for environmental issues, giving the ILO a primary and definitive role in assessing abuse
  • expanding Article XX(e) to include respect for all ILO core labor standards;
  • revising Article XX to include full employment’
  • a working party on labour issues, which once established could also consider incorporating best practice regarding labour provisions, and compliance measures in bilateral and regional free trade agreements, into the WTO provisions; and
  • embedding the practice of social dialogue within WTO structures.

In the lead up to the November Ministerial the first step for the WTO is to acknowledge revised rules are necessary to ensure trust in global trade and to establish consideration of these vital changes.

It’s a clear choice; reform or bust! Without trust and the hope of development for all countries, the pressure on national leaders to withdraw from global interdependence will escalate.


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