Working In These Times
Globalization and Labor: Taking Stock of Free Trade
With North American leaders tiptoeing around NAFTA in Guadalajara and more free trade pacts wending through Congress, now is a good time to take stock of what’s been gained and lost in Washington’s rush to liberalize international markets.
The Government Accountability Office recently surveyed four free trade agreements —with Jordan, Singapore, Chile and Morocco—and confirmed the obvious: the FTA’s have enriched multinational corporations at the expense of workers and communities toiling at the bottom of the global economy.
Labor protections written into the agreements have been stifled by a lack of funding and political will. Much of the responsibility for implementing the labor provisions and building the enforcement capacity of partner countries rests with the federal Bureau of International Labor Affairs (ILAB). If you’ve never heard of this agency, there’s a good reason why. ILAB officials reported to the GAO that their funding for general technical assistance programs for FTA partner countries “was greatly reduced in 2004 (from $37 million to $2.5 million) and has been eliminated in every year since 2005.”
On top of anemic funding, the agreements are apparently toothless by design:
U.S. agencies are not required to proactively monitor and report on FTA partners’ labor commitments after the agreements enter into force. FTAs rely on passive monitoring structures, through which outside parties can raise concerns that the U.S. government can or must react to. U.S. agencies may have missed labor problems and overlooked opportunities in these partners because they did not use the structures established by the FTAs as a vehicle for ongoing engagement on labor matters…. bilateral mechanisms for dialogue on labor issues between the FTA trade partners have largely been inactive, and labor-related discussions have been minimal.
Still, the GAO notes that outside pressure could jolt officials to address workers’ issues. Public scrutiny of the abuse of migrant workers in Jordan “pushed labor problems into the spotlight,” eventually prompting the Jordanian government to address migrant labor exploitation.
While the U.S. Trade Representative’s Office touts trade partnerships as a tool for strengthening environmental protections, the GAO found that boosting trade with partner countries hasn’t made them greener. NGO representatives told the GAO:
the inclusion of the environmental provisions and cooperation mechanisms has had little direct impact in providing higher levels of environmental protection, strengthening the capacity of trading partners to protect the environment, or addressing environmental problems targeted in cooperation mechanisms.
But then again, the agreements never set the bar very high in the first place. As with the labor provisions of the agreements, the GAO found that the main agencies charged with environmental monitoring have made little real progress:
the U.S. [Trade Representative] does not proactively monitor the implementation of environmental provisions and [State Department’s Oceans and International Environmental and Scientific Affairs Bureau] lacks a structure to manage and monitor implementation of environmental projects.
Officials told the GAO “the FTA provisions and cooperation mechanisms are directional and ‘aspirational’ commitments. As a result, several of these U.S. officials told us that they seek to do no harm and possibly do some good.”
So far, the officials tasked with managing labor and environmental protections seem to be doing virtually no good and perhaps much more harm.
The GAO study does document commercial successes tied to trade agreements, specifically marked growth in sales of goods and services. But for workers and the environment, the rhetoric of free trade lifting all boats falls flat. The GAO’s findings affirm economist Jeff Faux’s arguments in a 2007 policy paper by the Economic Policy Institute. Examining the legacy of NAFTA and other free trade schemes, he wrote:
The rules of the global economy now give corporate property rights priority over human rights, undercutting the hard-won domestic social contract that has supported broadly shared prosperity in advanced societies and in some developing countries as well.
But in light of the inevitability of globalization, activists see ways to work within the structure of the international trade to advance workers rights and environmental sustainability.
In a recent report on labor and trade policy, DEMOS notes the Obama administration has an obligation under some of the recently brokered trade pacts, such as the Peru FTA, to engage officials, unions and civil society groups on various labor policy issues, like inspection and enforcement practices and health and safety protections. DEMOS urges the White House to fully fund the ILAB and expand its mandate to include promoting collective bargaining actions and safeguarding workers from discrimination.
The controversial pending trade agreement with Colombia could give labor an avenue to establish new guideposts for global trade. The AFL-CIO is pressing Congress to hold back from considering the treaty “until workers can fully exercise internationally recognized labor rights without fear, the country makes deep and sustained progress on ending impunity and labor law reforms bring the country’s laws into compliance with International Labor Organization standards.”
Meanwhile, fair trade advocates are pushing the Trade Reform, Accountability, Development and Employment Act. The bill would require a comprehensive review of existing agreements, delineate new guidelines on international human rights and environmental standards as well as enforcement mechanisms in trade pacts, and enhance congressional oversight.
Though this week’s summit in Guadalajara left NAFTA basically untouched, grassroots momentum in Washington could spawn a fairer approach to free trade, harnessing global economic forces in the direction of equity and away from unbridled profits.