Labor Issues Create a Divide as WTO Set to Meet

Sweatshops. Child labor. Jobs fleeing to Mexico. Organized labor, long stymied in its bid to use trade policy as a tool for its agenda, has persuaded the White House to take up its cause when trade ministers from around the world convene in Seattle on Nov. 30.

But last week, negotiators got a foreshadowing of what to expect as dozens of developing nations demanded that labor standards be put off-limits at the landmark meeting of the World Trade Organization.

When the European Union proposed at a WTO meeting in Geneva that workplace matters be included on the Seattle agenda, there was overwhelming opposition from Third World nations--demonstrating anew that linking workplace issues with trade deals remains an enormously controversial issue in much of the world, where low pay and crude working conditions are often the norm.

Many poor nations fear they could ultimately be forced to improve the lot of their workers at a cost that would price their products out of rich overseas markets. Indeed, sorting out this conflict in a way that satisfies both human rights and economic progress has long eluded trade negotiators and promises to be a contentious issue at the Seattle summit.

“It’s one thing to say we want labor rights in the World Trade Organization. It’s quite another thing to say what we’re willing to pay [to emerging nations] to get them,” said Rob Scott, an economist with the Economic Policy Institute in Washington.

Yet a combination of political realities and hardball tactics--including union plans to shut down all the ports in Washington state on Nov. 30--has pushed labor concerns into prominence as the WTO meeting approaches.

President Clinton last month proposed that the WTO create a group to look at how trade rules and workplace concerns are linked, and European officials last week agreed to support such a proposal in Seattle.

But organized labor has long claimed that American jobs are jeopardized by exploitative workplaces abroad.

“We don’t want to shut down the trading system,” said David Smith, director of public policy at the AFL-CIO. “We want to hold it to a simple standard--that it improves the standard of living of working people everywhere.”

In fact, labor’s quarrel with the North American Free Trade Agreement and similar plans is among the reasons U.S. trade initiatives have all but ground to a halt during the past few years.

Against that backdrop, many observers--including angry union members--were startled last week when AFL-CIO President John Sweeney joined a handful of business leaders in signing a letter expressing general approval of U.S. plans for the Seattle meeting. At the event, officials expect to launch negotiations aimed at opening global trade in agriculture, services, electronic commerce and other areas.

But in the letter sealing the deal between Sweeney and the business leaders, labor gained something new: support from such major companies as IBM, Hewlett-Packard, Eastman Kodak and Monsanto for exploring the link between labor issues and trade deals.

“Even the business community is ready to accept what organized labor wants if that means in the future we don’t have these vicious disputes over things like NAFTA,” said one high-level U.S. executive. “There is some degree of sympathy for these points of view if we can move the U.S. agenda forward.”

Some viewed the letter as a possible watershed if it ultimately signals an easing of the rigid polarization between business and labor that has paralyzed recent trade initiatives.

“This is a big step,” said Greg Mastel, director of global economic policy at the New America Foundation think tank. “One of the things that’s been holding up trade progress in recent years is that there’s been no domestic consensus.”

At the same time, the letter sparked a backlash within the labor movement, which was already split by the AFL-CIO’s endorsement of Vice President Al Gore for next year’s Democratic presidential nomination.

Some of the AFL-CIO’s largest members, including the Teamsters and the International Longshore and Warehouse Union, want an immediate moratorium on trade talks and a complete overhaul of the existing system.

Whereas top U.S. labor leaders are united in their opposition to child exploitation in Pakistan and forced labor in military-run Myanmar, there are sharp divisions over how to push for better working conditions at this month’s WTO meeting.

In a memo to AFL-CIO officials around the country, Sweeney emphasized that he does not support all elements of the U.S. trade agenda, such as efforts to open new service sectors to trade. “Our critique of the WTO and the world trading system is both broad and deep, and our demands in Seattle are strong,” he declared.

The AFL-CIO is pushing the WTO to adopt standards for protecting workers’ rights and the environment, to conduct annual reviews on compliance by its members, to penalize governments that fail to meet those standards and to set tough requirements for prospective members such as China.

Nonetheless, Bret Caldwell, a spokesman for the 1.3-million-member Teamsters, said his union is “very disappointed” at the AFL-CIO’s decision to support a global trade body that “in its five-year existence hasn’t issued one labor-friendly decision.”

Labor’s planned protests have sent jitters through the Clinton administration, which once looked at the Seattle meeting as a crowning moment for its now-beleaguered trade policies.

When the WTO begins its four days of closed-door negotiating sessions inside the Washington State Convention and Trade Center on Nov. 30, critics are planning to get their point across with street theater, hold candlelight vigils and unfurl banners from downtown skyscrapers. Their message: By transferring power to institutions such as the WTO, governments are placing profits above their citizens’ health, safety and right to humane working conditions.

The ILWU, whose members work the docks from Alaska to California and Hawaii, has already announced that its western Washington locals will walk off the job for eight hours as the conference opens, in effect closing ports in Seattle, Tacoma, Bellingham, Hoquiam, Anacortes, Port Angeles, Everett, Olympia and Poulsbo.

Other ILWU locals on the West Coast, including Long Beach and Los Angeles, are considering a similar eight-hour “stop-work meeting,” a maneuver the union says is allowed under its contract.

“We make our living off trade, so we are in a unique position to make the case that we are not against trade, we are for ‘fair trade,’ ” said ILWU President Brian McWilliams.

The AFL-CIO has promised to bring tens of thousands of workers into downtown Seattle Nov. 30 for a protest march and labor rally. But Sweeney’s decision to work at least partly within the system has jolted the labor movement.

At the heart of this rift is a fundamental disagreement over whether the WTO, a 134-member organization dedicated to expanding trade, can be turned into a worker-friendly institution or if such concerns should be directed toward a different entity, such as the U.N.’s International Labor Organization.

Under the U.S. proposal, a WTO “working party” would consider how trade jibes with such concerns as child labor, employment, social welfare and labor standards.

Although the short-term goal would be merely an assessment, emerging nations such as Malaysia and India fret that such an effort would be the first step toward costly requirements for their own workplaces. They resent the imposition of Western values and fear that wealthier nations could use such requirements to restrict imports from poor nations, which may view their cheaper labor as a competitive advantage.

“It will almost certainly become a protectionist device--maybe not in the beginning, but in the end,” said Martin Khor, president of the Third World Network, an advocacy group in Malaysia. Yet opposition to injecting labor standards into trade negotiations is hardly limited to the Third World. Leaders in Japan, parts of Europe and other developed regions have long argued that taking on such volatile issues would doom trade groups such as the WTO and the Asia-Pacific Economic Cooperation forum, which operate on consensus.

Certainly, the issue will influence the horse trading among nations clamoring for their own objectives as the next major round of trade negotiations unfold in Seattle.

“The U.S. is going to have to pay something to developing countries if it is going to get this working party,” noted a WTO official. Similarly, emerging nations will be under pressure to make concessions to the United States in return for U.S. support for their own goals, such as easier access to richer nations for their exports.