trade
Comment
The Asian crisis has given greater urgency to the debate over the social dimension of global trade.
While the region was booming, complaints about the neglect of minimum labour standards could be brushed aside as a covert assertion of Western protectionism. It was hard to query an economic miracle even if a few heretics thought it too good to last. Now there is a new understanding that miracles for some can quickly turn into nightmares for many.
Unemployment in Indonesia has doubled since last year to more than eight million – in a country which does not provide welfare for those out of work. In South Korea, the unions have accepted some unemployment benefits in exchange for layoffs: a million may soon lose their jobs.
China now concedes that the competitive position of its own low-wage export industries may be affected. And a week ago, from the Olympian heights, World Bank president James Wolfensohn spoke of his concern for ”the social side – on the issues of unemployment, poverty, migrant labour”. When Jove is uneasy, it really is a crisis.
This week, at a conference in London organised by One World Action, new possibilities opened up for the post-miracle age. One positive outcome of the crisis – as the British Euro MP Glenys Kinnock observed – is that links are beginning to be drawn between economic health and good governance. The myth of a set of special Asian values which keeps undemocratic hierarchies in power has been punctured along with the miracle. Whether the system is called chaebol or crony capitalism or simply corruption at the top, it stems from a lack of political accountability.
The argument that improving workers’ rights in Third World countries will weaken their competitiveness also looks more shaky. If an unfettered market for labour is the solution, why has it failed so dismally?
We now see that an international trading system that sets one workforce against another can easily set in motion a downward spiral of devaluation and shrinking markets.
If this debate is to be productive, it must not become trapped between the rigid extremes of protectionism and globalisation. The global market exists in hard fact – and as an article of faith which even critics feel obliged to subscribe to. The question is how to regulate it and prevent the damage it can cause to hundreds of millions.
The argument that globalisation helps raise wages – because foreign companies can offer better conditions – is only a partial truth. It also obliges local employers to offer worse conditions in order to compete.
What has happened in Asia strengthens the argument for social clauses monitored by the International Labour Organisation, while sanctions are provided by the World Trade Organisation. The one international body speaking for workers, as British trade union leader John Monks said this week, should acquire more authority in a still inequitable global age. – The Guardian