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In 1999 in Seattle, over 50,000 people gathered to protest the World Trade Organization (WTO). People may mostly remember the sensationalistic TV coverage of a few violent incidents and that one guy singing, "Don't Bogart That Joint, My Friend," but overall, the protesters were people dedicated to intelligent discussion of unfair trade and to bringing the issue to the world's attention. Subsequent WTO meetings have also been marked by protests.
Overall, when it comes to these events, one is tempted to think, "What are all these crazy people protesting about?" We've been trained by the "Powers That Be" to think that global trade is an unqualified good, that it's a rising tide that lifts all boats.
To be sure, there are some good aspects to global trade:
- the ability to acquire goods that can't be produced locally;
- the opportunity to increase exports—and thus output and jobs;
- an increase in overall production efficiency (in theory, at least);
- a productive way to engage other nations in a manner that develops friendly political relations.
Unfortunately, the way in which the world's industrialized nations are pursuing globalization and global trade today is not for the global good, but rather is for much narrower aims: the good of global corporations and the plutocrats who front for them.
This article will discuss the impact of the WTO and global trade on jobs and democracy around the world. An upcoming article will focus on the impact of the WTO and global trade on the environment and food.
Is global trade responsible for the outsourcing of jobs? In short, yes. It's fairer to say, though, that jobs are to corporations like water is to a watershed—they slowly flow towards the lowest point, i.e. to the lowest wages.
In the past, low-skill jobs tended to migrate slowly to countries with lots of cheap, available, low-skill labor. The higher level of education and training in developed countries—and the fact that the level of education and training kept rising—allowed most displaced workers to find different jobs at similar or even higher wages. Thus, the "rising tide that lifts all boats" theory worked pretty well.
However, with the advent of global transportation and computer/communications systems, the barriers to using labor in one country to provide products and services to people in other countries have been markedly reduced. Additionally, education and training levels have risen in developing nations and these countries are no longer just "low-skill labor pools"—they too can handle higher-skill and knowledge-based jobs. The final lubricant for the movement of jobs was the development of the WTO and international trade agreements, in which centralized rulemaking bodies can trump national laws and interests.
All of this means that the world increasingly looks like one huge labor pool with relatively few
barriers to using workers from the cheapest labor markets, regardless of whether those markets pay fair wages, ensure worker safety, prohibit child labor and sweatshops, provide benefits like health care and retirement plans, or prohibit their factories from polluting the air, land, and water.
As jobs shift to low-cost counties, workers in the developed nations will eventually have to take lower-paying jobs. Nobel Prize-winning economist Paul Samuelson agrees: "The ... real wage has been lowered by this version of dynamic fair free trade." Further, Mr. Samuelson points out that the new availability of lower-priced goods and services in the developed nations may turn out to be feint compensation for having to take lower-paying jobs: "Being able to purchase groceries 20% cheaper at Wal-Mart does not necessarily make up for the wage losses."
Free-traders like to boast of how the WTO and international trade agreements are a vehicle for promoting democracy around the world. The theory is that once the populace in a nation gets a taste of the enhanced fruits of their labors that free trade will bring about, they will make it more and more difficult for dictators and freedom-suppressors to remain in power.
Yep, that's a good theory, but when the global trade rules are designed first and foremost to protect the rights of corporations, not the rights of people, it just doesn't work that way. Corrupt leaders can remain in power and are often strengthened by the global trade agreements, which bring more money into their government's coffers.
For those of us who believe that democracy works best when handled at the lowest (most local) level possible, the WTO can be viewed as anti-democratic—its rules apply at the super-national level; that is, its rules can trump the laws of a country. For example,
WTO rulings have challenged provisions of the US's Clean Air Act and Endangered Species Act.
Much of the problem lies in the fact that the WTO is an undemocratic organization to begin with. It's dominated by the most developed nations, including the US, whose governments in turn have become increasingly dominated by special-interest campaign money from large corporations. Thus, the writing of WTO rules is greatly influenced by corporations with inside access to the negotiations. The watchdog group GlobalExchange points out: "The US Trade Representative gets heavy input for negotiations from 17 'industry sector advisory committees.' Citizen input by consumer, environmental, human rights and labor organizations is consistently ignored. Even simple requests for information are denied, and the proceedings are held in secret. Who elected this secret global government?"
One of the stated goals of free trade is to make the world safer by promoting democracy, but with growing international resentment over the unfair characteristics of WTO-born trade agreements (especially in developing nations), it could be argued that free trade—as it is currently being pursued—is doing exactly the opposite.
So, if the idea is not to abandon international trade but to make it fair, what does that look like? The principles offered by the Fair Trade Federation include:
- Fair Wages — Workers are paid a living wage, which enables them to cover basic needs, including food, shelter, education and health care for their families.
- Better Workplaces — There are good worker safety programs, with no sweatshops or no child labor.
- Environmental Sustainability — Pollution is minimized; local resources are used sustainably, particularly in regions of high biodiversity.
That doesn't really seem like too high a bar for us to get over. It's up to us to tell our governments we don't like the way they've been handling global trade, and that trade agreements should be crafted for the benefit of world's many, not the corporate few. It will also help if you buy fair-trade goods to support the growing effort to demand alternatives to WTO-dominated trade.
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