Basic labor standards in any trade agreement

September 16, 1997|By Harley Shaiken

BERKELEY, Calif. -- President Clinton wants ''fast track'' authorization to negotiate trade agreements without congressional amendment. The debate promises to be fierce because the White House resisted congressional Democrats' demands that fast-track agreements address labor and environmental matters in a meaningful way.

What it all comes down to is whether ordinary Americans win or lose in the changing game of global trade.

Fast-track proponents such as House Speaker Newt Gingrich and much of the business community maintain that trade agreements should guarantee strong protection for patents and investment and little else. But trade agreements lacking environmental and labor protections will lead to the loss of U.S. jobs and wages, say Democratic House leaders Richard A. Gephardt and David E. Bonior, the labor movement and many environmental groups.

The debate takes place against a paradoxical backdrop of rosy economic news on television and continued anxiety at the dinner table. The recent United Parcel Service strike underscored the importance Americans place on creating full-time jobs that pay well. No wonder. Average wages (adjusted for inflation) still lag behind their 1973 peak.

Will fast-track spur prosperity or will it fuel economic anxiety? To answer this question requires puncturing two myths that have clouded the debate.

The first myth is that stressing labor protections means imposing U.S. standards on developing countries that can ill afford them. Just the opposite is the case. Basic labor standards such as the right to join unions and bargain collectively allow workers to shape their own economic future.

Increasingly, we have seen continued income polarization combined with economic growth in countries such as Chile -- next on the free-trade calendar. Recent U.N. data indicate that real wages have plummeted 30 percent in some Latin American countries. By giving workers the ability to achieve a fairer share of the economic pie, labor rights encourage consumer markets to grow and strengthen democratic values. These rights make it more likely that we will export products to growing markets rather than import lower wage levels.

Who gets the benefit?

The second myth is that the debate over fast track is a debate between free-traders and protectionists. Most people on both sides of this debate agree that expanded trade is potentially beneficial; critics of fast-track argue that ordinary people will not reap these benefits without enforceable labor and environmental standards.

Ironically, when strong protection of U.S. patents and profits is advocated, commentators overwhelmingly refer to this as ''free trade;'' when critics call for far more modest guarantees for labor and the environment, this is referred to as ''protectionism.''

Imagine going to Bill Gates and saying, ''Bill, we think free trade is important, but guaranteeing intellectual property rights with our trading partners is 'shadow protectionism.' They will see the importance of protecting patents as trade expands.'' I would hazard a rough guess that Mr. Gates might not go along with this argument. Yet this is precisely what U.S. working families are being told, and unlike Bill Gates, they hardly have the resources to wait.

We do need good protection for intellectual property rights in trade agreements and, for the very same reasons, we need guarantees for labor and the environment.

There is a new economic reality to trade. The export sectors in developing economies are beginning to match or exceed U.S. levels of productivity and quality. Volkswagen's most sophisticated plant in the world is in Brazil; Samsung produces advanced television monitors in Mexico. Low wages in cutting-edge export plants often reflect low labor standards, not low productivity.

Without basic rights for labor, when the whip is cracked against workers in Tijuana, it will be felt in Los Angeles. The mere threat of moving plants to take advantage of low labor costs depresses American wages. When told that their auto-parts plants were moving to Mexico, workers in St. Clair, Mich., wrote to President Clinton in July: ''We are dedicated, productive employees, but how can we compete with workers in Mexico who make under $1 an hour?''

The surest way to expand trade is to ensure that workers in

other countries can move toward the middle class; the alternative is trade that knocks U.S. workers out of the middle class. Fast-track without labor and environmental protections is a bridge back toward the 19th century rather than a link forward to the 21st.

Harley Shaiken is a professor at the University of California who specializes in labor and the global economy.

Pub Date: 9/16/97

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