Free Trade and Transnational Labour

Andreas Bieler, Bruno Ciccaglione, John Hilary, Ingemar Lindberg

• Publisher: Taylor & Francis
• Year: 2016
• Print ISBN: 9781138932548
• eBook ISBN: 9781317678649
• Edition: 1
• Topic: Politics & International Relations
• Subtopic: Politics
• Index: Politics & International Relations

Resistance against free trade agreements based on an expanded trade agenda, including issues related to intellectual property rights, trade in services and trade-related investment measures, has increased since the demonstrations at the WTO ministerial conference in Seattle in 1999. While the WTO Doha negotiations have broken down, the EU and USA are increasingly engaged in bilateral free trade agreements, building on this expanded trade agenda.

Free trade strategies have increasingly become a problem for the international labour movement. While trade unions in the North, especially in manufacturing, have supported free trade agreements to secure export markets for their companies, trade unions in the Global South oppose these agreements, since they often imply deindustrialisation.

The purpose of this volume is to understand better these dynamics underlying free trade policy-making. Academics, trade union researchers and social movement activists analyse these issues in detail in order to explore possibilities for transnational labour solidarity.

This book was published as a special issue of Globalizations.

Trade Unions, ‘Free Trade’, and the Problem of Transnational Solidarity: An Introduction

ANDREAS BIELER*, JOHN HILARY** & INGEMAR LINDBERG***

*University of Nottingham, UK
**Executive Director, War on Want, UK
***Independent Researcher, Stockholm, Sweden

ABSTRACT This article outlines how the expanded ‘free trade’ agenda since the completion of the GATT Uruguay Round in 1994 has further pushed neoliberal restructuring across the world. The second part introduces a discussion of workers’ responses to ‘free trade’. While labour movements of the Global South have often experienced ‘free trade’ as resulting in deindustrialisation, Northern trade unions regard ‘free trade’ as a win–win strategy. How can transnational solidarity be established in this situation?

Two core challenges for labour movements across the world can be identified in the current conjuncture. First, as a result of the increasing transnationalisation of production, workers are increasingly forced to compete for jobs against each other across national borders, and national labour movements are drawn into underbidding each other for the sake of competitiveness. Second, due to neoliberal restructuring of the social relations of production, expressed in the privatisation of the traditional public sector and a general deregulation of labour markets, as well as movements off the land due to, among other things, the commercialisation of agriculture, there has been increasing unemployment and expanding informalisation of work (Bieler, Lindberg, & Sauerborn, 2010).

This twin challenge has led to far-reaching changes in the balance of power between the forces of capital and labour. National labour movements are under considerable pressure as a result of the onslaught by capital, particularly transnational capital and its increase in structural power vis-à-vis labour (Wahl, 2011). At the same time, we are also witnessing new or renewed responses on the part of labour. Workers in transnational companies and transnational chains of production or distribution are beginning to link up with each other to protect their common interests. Workers in public services have started to cooperate with user groups in defence of the public sector. While trade unions are still framed by their national legislation and experiences, and still maintain their principal power base at the workplace and national levels, they also need to develop transnational structures of struggle and reach out to groups beyond the workplace to meet the double challenge of neoliberal globalisation.

We have already mapped out national responses to globalisation and informalisation in our earlier volume Labour and the Challenges of Globalization: What Prospects for Transnational Solidarity? (Bieler, Lindberg, & Pillay, 2008). We have also analysed cases of transnational cooperation between trade unions, as well as joint action with other social movements, including those based on informal workers, in Global Restructuring, Labour and the Challenges for Transnational Solidarity (Bieler & Lindberg, 2010). The aim of the present volume is to understand better the differences between unions in the North and in the South—or, better, the centres and peripheries of global capitalism—on issues relating to trade and development. Is ‘free trade’ a threat to workers the world over, creating downward pressure on wages and working conditions? Or is it in fact beneficial to workers in the North, giving them a share of an ‘imperialist rent’ at the expense of workers in the South? Can ‘free trade’ be developed into a win–win game, benefiting workers both in the North and in the South? And how should the present trade regime best be characterised—is it really about ‘free trade’?

In order to illustrate the basic question, let us already in this introduction briefly mention two cases of diverging trade union viewpoints on ‘free trade’ agreements (FTAs). The first concerns the European Union’s (EU) ongoing drive to conclude a series of FTAs with trading partners across the world. This drive has met with widespread resistance from unions in the global South, as outlined by John Hilary in this issue (2014). Yet many European unions have been more accepting of these agreements, and some (particularly from more export-oriented sectors) have actively supported them, preferring at best to lobby for the inclusion of social conditionalities to mitigate their worst impacts. How can we best understand this divergence of views? Should it be seen as expressing a material conflict of interest between workers in the centres and peripheries of the capitalist world system, concealed behind the rhetoric of transnational solidarity? Or is there a genuine belief among some trade unions in the North which posits a possible win–win strategy in the long term connected to ‘free trade’—an imagined open world economy that would provide economic growth and rising well-being for workers in both North and South alike? For European workers, such an idea can be traced back to their experience of a period of welfare state capitalism after World War II, with stable rates of growth and generally improved well-being for working class families. Such an experience is, however, dramatically different from what we see today in the centres of capitalism, where the working class faces mass unemployment, depressed wages, and the threat of ‘perma-austerity’. For trade unions on the periphery of global capitalism, with their historical experiences of colonialism and present-day experiences of imperialist exploitation, what arguments could ever convince them to believe in a win–win outcome from the ‘free trade’ agenda?

A second illustration of our basic question, developed by Mi Park in this issue (2014), has to do with FTAs in the Asian context. Why did the arguably most militant trade union confederation in East Asia, the Korean Confederation of Trade Unions (KCTU), not mobilise its rank-and-file members to oppose the FTA with China and the Association of Southeast Asian Nations (ASEAN), in sharp contrast to its vehement opposition to the FTAs with the EU and USA? And, on the other hand, why do trade unions in Australia and New Zealand highlight an FTA with China as a major threat to their economies? How should these diverging positions be understood? It is clear that FTAs can serve different objectives and one can, as Mi Park argues, recognise genuine geopolitical factors behind the FTA drive. For instance, some FTAs in Asia can be conceptualised as a developmental tool by which countries aim to move away from dependence on ‘developed’ markets, as well as a means to securing access to strategic natural resources.

It will be important to understand these conflicts not only as existing between countries or regions (the centres and peripheries of capitalism), but also—and even principally—as conflicts between social classes, developing differently in different parts of the world. At the same time, the relative positions of workers in the capitalist world system are also in flux, as the old centres of Europe and North America face deep crisis and the prospect of long-term decline, while many countries from the peripheries of the system—Africa, Latin America, and, in particular, Asia—show astonishing growth rates and increased strength to assert themselves in the global economic system. Concepts of core and periphery should not be misunderstood as fixed geographical definitions; rather, they are the result of how specific social configurations have developed over time. Changing social relations of production in the global economy, consequently, can also change the specific expressions of core and periphery, with countries emerging from the periphery to challenge and, potentially, supplant those at the core. Conceptions of North and South that were based, in part, on the historical experience of colonialism (Brandt, 1980) are increasingly yielding to new developments and dynamics in the globalised economy of the twenty-first century.

In this introduction, we will first discuss the expanded ‘free trade’ agenda, before we assess the challenges for trade unions and transnational solidarity.

The Expanded ‘Free Trade’ Agenda

After World War II, ‘free trade’ was mainly pursued within the framework of the General Agreement on Tariffs and Trade (GATT), with a focus on lowering tariff barriers in order to stimulate the trading of goods across borders. Importantly, GATT was part of the post-war regime of embedded liberalism (Ruggie, 1982), which combined the goal of international ‘free trade’ with the right of governments to intervene in their own economies when domestic stability and welfare was at stake. In other words, it was not envisaged that trade should be completely ‘free’, as escape provisions and protection against policies harmful to domestic stability were included within GATT. For example, quantitative restrictions on trade were prohibited in general, but were allowed in order to protect balance of payments difficulties that resulted from domestic policies intended to ensure full employment. Moreover, countries were allowed to form regional customs unions and ‘free trade’ areas, and a blanket exemption was allowed for all existing preferential arrangements. Thus the European Economic Community could establish its Customs Union during the 1960s, in which all tariff barriers between members were abolished and a common external tariff established, without infringing GATT provisions. As such, the possibility of safeguarding domestic development and employment worked well for industrialised countries, which succeeded in establishing welfare states based on a compromise between capital and labour. However, developing countries fared less well: GATT escape provisions, which allowed industrialised countries to protect sensitive industrial sectors, worked to their disadvantage, as they could neither export the few manufacturing products they had, nor did they have free access to the agricultural markets of the North, since these markets were not covered by GATT.

It was the GATT Uruguay Round from 1986 to 1994 which took the international ‘free trade’ agenda into new territory. The Uruguay Round culminated in the establishment of the World Trade Organization (WTO) in 1995, including also a strengthened dispute settlement procedure facilitating the monitoring and enforcement of global trade agreements. The Uruguay Round also produced the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs), a General Agreement on Trade in Services (GATS), as well as an Agreement on Trade-Related Investment Measures (TRIMs), all of which reached ‘behind the border’ into the domestic policy space of WTO member countries. In short, developments introduced during the Uruguay Round have undermined national sovereignty and challenged the compromise of ‘embedded liberalism’ in developed countries (Mortensen, 2006, pp. 173–5). Developing countries have also not benefited from these latest developments. Being pressured to open up their economies not only to manufactured goods but also to services, public procurement, and investment, they have been prevented from adopting development strategies such as the protection of infant industries, which were the cornerstone of the initial development of today’s developed countries. China is to some extent the exception here, in that the state deliberately supported its development by means of a gradual integration into the global economy. China did indeed go through an intense period of opening up to international trade and investment in order to qualify for WTO membership in 2001, and this caused considerable structural adjustment and job losses, especially in state-owned enterprises, where the official total of laid-off workers rose from 3 million in 1993 to 17.24 million in 1998 (Cai, 2002, p. 327). Rapid economic growth has also seen increasing social inequality and injustice (Zheng & Chen, 2007). At the same time, however, China had successfully developed its infant industries to a competitive level behind closed doors in the 25 years prior to its joining the WTO, with the result that it has now overtaken both Germany and the USA to be easily the largest exporter of merchandise in the world.

The Doha Round of WTO negotiations was launched in 2001 as the result of a bargain between the USA, which was promised greater market access for its agricultural exports, and the EU, which wanted to include the so-called Singapore issues of investment, competition policy, public procurement, and trade facilitation in the WTO’s negotiating agenda. The GATS services agenda was conceptualised separately at the WTO and then incorporated into the Doha Round. The Doha Round negotiations were beset with crisis from the outset and have collapsed at regular intervals ever since the WTO’s failed 2003 ministerial conference in Cancún. Nevertheless, this expanded ‘free trade’ agenda is now aggressively promoted in bilateral FTAs by the EU and the USA with developed, developing, and emerging economies alike (see Choudry, 2014 and Hilary, 2014). And it is these FTAs, and the positions of different labour movements from around the world towards them, which are at the heart of this issue.

The growing inequalities between and within countries that we witness today should be understood not primarily as the result of a global trade regime but as the expression of a capitalist and imperialist world system which is at one and the same time both an economic system and a system of power relations. As Samir Amin argues in this issue (2014), imperialism in different forms has always been part of the dynamics of capitalism. The dominant powers at the centres of capitalism make use of all the means at their disposal—economic, financial, and military—to maintain their domination of the rest of the world. Trade regulation is one of their instruments, but certainly not the only one. The success of imperialism in establishing new ways of dominating the world system through the control of technological invention, access to resources, the globalised financial system, communications, and information technology—as well as, in the last instance, weapons of mass destruction—is fundamental (Amin, 2003, pp. 61–5). The dominant imperialist structures have throughout the history of capitalism been upheld not only by the oligarchies and monopolies of the dominant centre, but they have also served as a basis for the reproduction of society as a whole, in spite of the evident class structure of these societies and the exploitation of their workers. The dominance of capitalist powers in the imperialist triad (Europe, North America, Japan) was, as Amin asserts, supported or at least accepted by the ‘peoples of the North’. Unions in the North, while supportive of the organisational efforts of workers in the peripheries, have generally not undertaken a thoroughgoing discussion of the imperialisms of yesterday and today, including their own role in upholding these structures. This is, as we see it, a major factor behind the diverging positions between some unions in the North and in the South on trade issues. Seen in this perspective, the issue is broader than the attitudes of unions to ‘free trade’: it is about their attitudes to the world order of present-day capitalism and its market-fundamentalist ideology.

When we discuss the role of trade and the positions of unions over and against it, we must therefore place the issues in this broader context. Nevertheless, the current expanded ‘free trade’ agenda is in itself an important driver of further neoliberal restructuring. Since the Uruguay Round, international trade agreements no longer simply address border tariffs but directly relate to, and interfere with, developments within national and regional political economies. The dominant trade regime goes hand in hand with other defining c...

Table of contents

• Cover
• Half Title
• Series page
• Title Page
• Copyright
• Contents
• Citation Information
• 1. Trade Unions, ‘Free Trade’, and the Problem of Transnational Solidarity: An Introduction
• 2. Imperialist Rent and the Challenges for the Radical Left
• 3. ‘Imperialist Rent’ in Practice and Theory
• 4. Uneven and Combined Development and Unequal Exchange: The Second Wind of Neoliberal ‘Free Trade’?
• 5. European Trade Unions and Free Trade: Between International Solidarity and Perceived Self-Interest
• 6. Canadian and European Unions and the Canada—EU CETA Negotiations
• 7. Trade Liberalization and Organized Labour in the Asia-Pacific Region: Barriers to Labour Internationalism
• 8. The Free Trade Area of the Americas in the Long Crisis of Brazilian Labour
• 9. The Congress of South African Trade Unions and Free Trade: Obstacles to Transnational Solidarity
• 10. Examining the Disconnect Between Mass Mobilizations and International Trade Union/NGO Networks in Struggles over Bilateral Free Trade and Investment Agreements
• 11. Free Trade and the New Labour Internationalism
• 12. Unions and Trade: What Kind of Solidarity?
• 13. Global Crises: The Need to Go Beyond Transnational Solidarity in the Struggle Against the Expansion of Free Trade Agreements
• 14. Conclusion: Towards Transnational Solidarity on ‘Free Trade’ Policy?
• Index