Reform the WTO: Labour rights for fair competition

Photo: Enrique Mendizabal

Trust in globalisation is broken by a failed economic model of trade that fuelled exploitative supply chains in the quest for higher and higher profits.

Historic levels of inequality are not an accident but rather the relentless push for trade liberalisation without a floor of human and labour rights stands accused of being a significant part of the problem.

Add the corporate bullying of governments to ensure that labour markets are not regulated and you have a picture of dehumanising capitalism that disregards the very people who make profits possible.

Sixty per cent of global trade is now driven by big business which, without apology, uses a business model based on exploitation and abuse of human rights in supply chains outsourcing any responsibility down the chain. Workers’ rights at home or abroad mean little or nothing to the heads of most major corporations.

When 94% of the global supply chain workforce are hidden workers for whom no corporate buyer or investor takes responsibility there can be no doubt as to why despair and anger have broken people’s trust.

The blind trust in the ‘trickle-down theory’ as a basis for a global economy has failed and must be abandoned. The period of hyper globalisation beginning in the 1980s initiated a breakdown in the social contract. This model of economic behaviour has driven a thirty-year global slump in income-share and the rise of precarious, insecure and often unsafe work.

There are corporations that understand and accept their responsibilities for mandated due diligence concerning human and labour rights with grievance procedures and a commitment to remedy. But volunteerism has and will fail if the exploitation of others undercuts their capacity to operate.

The World Trade Organisation (WTO) must lay the pathway for serious reform to ensure a model of trade that does not continue to allow mindless exploitation in supply chains with corporate impunity. Global trade must be based on fair competition that does not generate even greater inequality within and between nations.

This week WTO members confirmed the election of Ngozi Okonjo-Iweala as the new Director-General of the WTO. The comments of the new Director-General in support of extensive and serious reform of the WTO are inspiring a new generation of actors.

This year, the 164 members of the WTO have a choice to make. They can choose to play a critical role in global economic governance, but it cannot be more of the same where cheap exploitative labour fuels global profits and billions of people are excluded from trade’s benefits which accrue to a tiny elite.

The ITUC Global Poll shows 94 per cent of people want the guarantee of labour rights as a foundation for global trade. More than nine in ten people want stronger rules to hold corporations accountable for better wages and conditions. Eighty-eight per cent of people want minimum wages lifted around the world.

COVID-19 has further exposed the vulnerability of our supply chains and the unchartered future where technology, climate risk and demand shifts will reshape production and distribution. This is the moment to look again at a fair competition floor such that trade benefits all workers and their nations.

Despite massive increases in global GDP, the gains have not been shared. The current trade rules are responsible for underpinning both extreme inequalities and exploitative production conditions with no global floor of human and labour rights. Without environmental standards, they also promote wasteful consumption of resources causing environmental degradation and climate change, the further disempowerment of disenfranchised groups, persisting poverty, and food insecurity.

It’s time for change. If not, the lack of trust people have in globalisation will deepen with increased despair, social unrest and the further undermining of our democracies.

Reform requires leadership for a fair competition floor of rights and environmental standards accompanied by a compliance system that ensures labour and environmental exploitation can be remedied with governments and corporations held to account.

Social dialogue must also have a structural role in all multilateral institutions including the WTO.

Shared prosperity, human and labour rights and a sustainable planet must no longer be traded away. The corporate model must change and the government members of the WTO must accept their responsibility to protect working people.

Reform of the WTO is back on the agenda and economic ground rules can be re-written. With the right rules, trade can contribute to stronger economies, decent jobs and to reducing inequality.