Aiming for a revolution in world trade

In the neoliberal era, global trade deals have come at the expense of workers. That can and must be reversed.

The summit between the European Union and the United States in Brussels in June saw the launch by the European Commission president, Ursula von der Leyen, and the US president, Joe Biden, of a transatlantic Trade and Technology Council (TTC). This should herald a new epoch—one where workers take centre stage in trade negotiations, agreements and enforcement.

When trade deals are under scrutiny, the first question should be: ‘Who’s benefiting from this?’ That implies working with trade unions from start to finish.

In early September, the co-chairs of the TTC, who on the EU side comprise the commission vice-presidents Margrethe Vestager and Valdis Dombrovskis, signalled their readiness to ‘take concrete steps to ensure trade and technology policies deliver for our people’. The European Trade Union Confederation (ETUC) and its American equivalent, the AFL-CIO (American Federation of Labor and Congress of Industrial Organizations), welcome this new engagement. But we want to see that pledge translated into action.

Well-meaning but non-enforceable dispute-settlement clauses for labour-rights violations are no longer adequate. We were thus very pleased to see how this new relationship between the EU and the US led to the recent removal of the steel and aluminium tariffs introduced by the prior administration of Donald Trump.

Profound impact

The ETUC has been working with our American colleagues for a long time on trade issues. We know that more trade and investment is good for jobs on both sides of the Atlantic, and that the terms and conditions set out in trade deals have a profound impact on the availability of quality jobs and working conditions—not to mention broader concerns such as human rights, health and the environment.

The TTC will establish ten working groups to tackle a broad range of challenges, including co-operation on technology standards, supply-chain security, climate and green technology, data governance, export controls, access to digital technologies and the threat to security and human rights from their misuse.

Trade unions and the social partners have real expertise to contribute on such issues. We stand ready to advise on how to work together, as part of a much closer involvement of unions and civil society at large. This is especially important since the way trade is regulated between the EU and the US—two of the world’s largest trading partners—will also help define how it takes place in and between other regions.

In trade, as in life, second chances are seldom available. So the TTC institutional structure must be right from the start. The workers’ perspective is going to be crucial, and workers and unions should be involved from day one. The ETUC’s participation in the inaugural TTC meeting in Pittsburgh later in September was an encouraging start.

New order possible

The end of the Trump era makes a new global trade order possible. The Biden administration has pledged to put workers first and is showing the way through the USMCA—the Agreement between the United States of America, the United Mexican States and Canada.

For instance, the USMCA contains a ground-breaking provision on enforcement of workers’ rights, the Rapid Response Labor Mechanism, detailed in an annex agreed with Mexico specifically. This allows the US government to pursue action against individual factories if they fail to comply with domestic laws on freedom of association and collective bargaining. Changing the neoliberal narrative of self-regulating markets might make the world a better place for all by weakening the appeal of right-wing populists, who rally support through opposing globalisation—as did Trump against the prior North American Free Trade Agreement.

The TTC co-chairs insisted that ‘both the EU and US are committed and look forward to robust and ongoing engagement with a broad range of stakeholders to ensure that the outcomes from this cooperation support broad-based growth in both economies and are consistent with our shared values’. And out of the initial meeting came the Pittsburgh Statement, pledging inclusive economic growth ‘that benefits all of our people’, with particular emphasis on middle-class and lower-income groups on both sides of the Atlantic.

The EU and US would, the statement said, ‘promote together and in an inclusive way the protection of fundamental labour rights, including by combatting the scourge of forced and child labour, with each side using relevant trade policies and tools, including FTAs [free-trade agreements] and unilateral measures, such as preference and other programs, and cooperating in the ILO [International Labour Organization], WTO [World Trade Organisation], and other appropriate multilateral fora. Both sides intend to promote responsible business conduct, with the aim of enhancing the sustainability of global value chains.’ The two sides promised to analyse the impact of technology and the digital economy on labour markets, working conditions and workers’ rights, including worker surveillance and labour conditions throughout supply chains.

Protection of rights

All these are important intentions but they have to be translated into action. Trade unions and civil society stand ready to assist in that process. The ETUC has long called for reform of EU trade and investment policy to prioritise decent jobs and the protection of fundamental and human rights—including workers’ and trade union rights, preservation of the environment and biodiversity and compliance with the Paris Agreement on climate change, the safeguarding of high-quality public services and the strengthening of Europe’s industrial base.

The EU has exclusive competence on external trade, offering it a unique and valuable tool to improve international standards, implementing United Nations Sustainable Development Goals such as those on decent work, social cohesion and equality. The ratification, implementation and enforcement by all trade partners of the ILO conventions on freedom of association and collective bargaining should be a key precondition of agreements.

The EU needs a radically new trade policy that benefits all people and puts social justice first. For that to happen, the EU must follow the US in placing workers centre-stage, because whatever the EU and the US do together will affect trade and associated agreements elsewhere in the world.

We need to have a clear understanding of the workers’ perspective in the debate over worker-centred trade policies. Many trade agreements have been a success for European multinationals, while workers have lost their jobs because of relocation of production outside the EU. The new globalisation that is developing needs to ensure many more workers benefit from the wealth generated by trade. There have been too many losers on the workers’ side in recent years.

Trade, at the end of the day, is about buying and selling. It is also about taking an active interest in the welfare of one’s partner. There is a choice: trade policy can widen inequalities and create wealth for some and misery and exploitation for others, or it can be an active, global force for good. Let’s make a new start and get things right this time.