There's Still A Place for Labor Diplomacy, by Edmund McWilliams

There's Still A Place For Labor Diplomacy

Though the Cold War is over, support for worker rights should be a continuing part of U.S. democracy promotion abroad.
By Edmund McWilliams

Labor diplomacy, those aspects of U. S. foreign relations that relate to the promotion of worker rights and, more broadly, democratic society, was a vital element of a successful U.S. foreign policy during the Cold War. At the time, labor offered significant political support to the U.S. government in its efforts to contain and defeat communism. In the years after the Cold War, labor diplomacy has been relegated to the sidelines by foreign policy makers; at the same time, the fight for worker rights has become even more important as globalization has produced new challenges for workers. It is time to recognize that a vibrant labor diplomacy can be a valuable component of U.S. foreign policy once again, this time as it confronts the challenges to U.S. interests posed by the impact of globalization and rising ethnic and religious tensions around the world.

The 1948 Universal Declaration of Human Rights established that worker rights are human rights. It set forth several principles: everyone has the right to work in just and favorable conditions, to be paid fairly for their work, to form trade unions to protect their interests, and to be protected against unemployment. More than a half century later, these rights are still unmet goals -- expressed on the placards of demonstrators in Seattle or along the picket lines at factory gates around the world -- rather than realities in both developed and developing countries.

Globalization Challenges Labor

Globalization is challenging the degree of real international commitment to defend fundamental worker rights set out in the Universal Declaration. Today's global economy has created a difficult environment for labor. "Flexible" labor markets can leave workers with fewer benefits, poorer working conditions and greater job insecurity -- and little recourse to improve their lot. For example, until recently in Guatemala, workers were only allowed to strike at non-harvest time, i.e., when most are not working. Privatization and downsizing, encouraged by international financial institutions and our own bilateral assistance programs, displace workers, leaving many in countries like China, El Salvador, Ghana or Bolivia to adjust to new economic conditions without benefit of social safety nets or job retraining.

New approaches to "modern" industrial relations can preclude workers from benefiting from collective representation by trade unions and can make it more difficult for workers to turn to national labor laws to address their concerns. In both developing and developed countries, some businesses are pursuing individual contracts between the employer and the worker. These contracts do not allow for collective bargaining. In some countries such as Colombia, employers may also encourage workers to join cooperative organizations, which contract with an employer to perform labor, rather than join unions. These workers are officially recognized as "cooperative members," not "workers" and therefore, may not be eligible for labor law protections given to workers.

Furthermore, globalization encourages companies to invest in countries where labor standards are lowest, potentially pushing some countries that embrace higher standards for workers right out of economic competition. For example, multinationals will be tempted to transfer operations to China and Vietnam, who are about to join the WTO, because these countries offer incomparably low wages, party-controlled trade unions and massive ranks of low- to middle-skill docile workers. Fragile new democracies like Indonesia or even more established democracies like the Philippines, which are beginning to support worker rights as unionized workers make their demands heard, will lose foreign investment and export revenue as jobs move to places where labor is cheaper.

Labor Benefits Foreign Policy

Globalization's sometimes debilitating impact on labor comes at a time of weakened labor influence in U.S. foreign policy. U.S. labor's role in U.S. foreign policy and U.S. labor diplomacy more generally lost much of their purpose following the collapse of communism.

During the Cold War, a vigorous labor diplomacy, implemented by State Department labor officers, USAID and USIA was critical to U.S. foreign policy. Trade unions and workers, here and abroad, rallied to Washington's call for a struggle against communism and offered political support to shore up Western governments. Building on pre-war alliances between U.S. labor and anti-Nazi and anti-Fascist labor movements, many Western post-war governments relied on labor's backing. Other governments, particularly Christian Socialist governments, had large, politically allied labor unions that gave these governments significant organized political support against communist-backed opponents. Labor unions played similar political roles in the developing world, allying with progressive parties against colonialism and often providing leaders for these parties from their own ranks.

The collapse of the Soviet bloc lessened the need for labor as an ally in the formulation of U.S. foreign policy. By the end of the Cold War, USIA and USAID labor officer slots had largely disappeared, and the ranks of State labor officers had diminished to slightly more than 30, less than half the number of officers during the Cold War.

Yet today, labor could play just as significant a role in the formulation and implementation of U.S. foreign policy as it did during the Cold War. Many of the goals that U.S. foreign policy seeks to promote -- democracy, human rights, political stability and social and economic development -- are the same ones that labor also embraces. In Poland, Indonesia, South Africa, Brazil, Nigeria, Burma and many other countries, workers and trade unions have been among the leading forces pressing for political and economic liberalization. Democratic trade unions are economic agents because they promote a culture of negotiation through collective bargaining, a process that undermines any tendency to concentrate economic power and wealth in a society. They are also political agents, affording workers a voice in the political process, and thereby strengthening democratic control of economic decision-making. Moreover, at their best, unions function as democratic models with transparent internal mechanisms for electing leaders, debating policy, and resolving disputes. Unions and their leaders are on the front lines in combating extra-legal paramilitaries and organized crime (and are often their principal victims) in Colombia, Guatemala, Zimbabwe and Russia. Trade unions, with their mass bases and broad social agendas for progressive change, have bridged ethnic, religious and tribal cleavages in places as disparate as Northern Ireland, the former Yugoslavia and sub-Saharan Africa.

In seeking to reduce the instability and inequities generated by globalization, some governments are turning to trade unions as representatives of workers and the poor in a dialogue about the impact of this economic transformation. Trade unions in many countries are uniquely placed to articulate social as well as labor concerns responsibly and coherently. They serve as legitimate interlocutors for the government in a dialogue about issues such as worker displacement, growing rural-to-urban migration, foreign worker immigration and other destabilizing consequences of globalization.

As proponents of democratization, healers of societal cleavages, opponents of extralegal forces and as interlocutors for national governments and business seeking to adapt to rapid economic change, trade unions and workers can be valuable allies for U.S. diplomacy.

Returning Labor to the Fold

In recent years, the U.S. has taken steps to reinvigorate labor diplomacy. At the urging of the Department of Labor, the AFL-CIO and others, the number of overseas labor officers was increased in the late 1990s, especially after the American labor movement played a major role in denying President Clinton's renewal of "fast track" trade negotiation authority. Also at that time, the Department of Labor agreed to an officer exchange with State that provided for the assignment of Department of Labor officers to State labor slots in the field and in Washington. In May 1999, State formed an advisory committee on labor diplomacy to analyze how U.S. labor diplomacy might be reinvigorated. Its September 2000 report offered numerous recommendations aimed at strengthening the role State's 49 labor officers play in diplomacy. While more than half of its recommendations were accepted, it is as yet unclear how thoroughly these recommendations will be implemented.

With this renewed attention to labor diplomacy, the United States has made some progress in the fight for workers' rights. For example, the United States has supported efforts to raise labor standards by endorsing the ILO's "Declaration of Fundamental Principles and Rights at Work" (which endorses freedom of association, freedom from forced and compulsory labor, and freedom from discrimination in employment and occupation). America's support for labor has encountered strong resistance among developing countries that believe that if they raise labor standards they could lose their competitive economic advantage. In the absence of a clear global consensus on labor standards, low-wage, low-standard export engines like China, Vietnam, and India could swamp smaller countries whose labor standards and costs, while not necessarily up to ILO standards, are nonetheless higher than those in these powerful competitors.

For the United States, implementing a successful labor diplomacy means addressing these concerns. Specifically, the ILO's Declaration of Fundamental Principles must be more than hortatory. Because the ILO cannot levy sanctions, the declaration's impact on the lives of workers on factory floors worldwide so far has been less than workers have hoped.

The United States should champion worker rights in the trade agreements it becomes party to. The recently signed U.S.-Jordan Free Trade Agreement is the first U.S. trade agreement to include worker rights provisions in the main text of the agreement. It is encouraging that other countries have told the U.S. that the agreement with Jordan is a model that they might like to use as a basis for trade agreements with them. A U.S.-Cambodian textile agreement, which accords increased quotas for exports to the U.S. as an incentive for improved worker rights observance, is a potential model for the future. Yet there is still a long way to go: There is as yet no clear indication that the U.S. intends to include effective worker rights provisions in the discussions regarding a Free Trade Agreement of the Americas. Labor provisions are also absent in the as yet unratified U.S.-Vietnam Bilateral Trade Agreement.

U.S. labor diplomacy has encouraged corporate responsibility by pushing for improved industrial relations among businesses, trade unions and governments. For example, State's Democracy, Human Rights and Labor office administers a fund (worth $3.9 million in FY01) to award grants to support the adoption of corporate codes of conduct, and to support proposals to encourage partnerships among NGOs, organized labor and corporate alliances to address unacceptable working conditions in worksites overseas. This "Partnership to Eliminate Sweatshops" seeks to end sweatshop labor conditions in worksites abroad that produce for the U.S. market. In 2000, the fund awarded grants totaling $4 million to NGOs, business associations, and the ILO to support specific initiatives such as training monitors, building partnerships among workers and employers and helping workers learn their rights. Projects funded under this initiative are under way or about to begin in Asia, Central America, Africa and other developing countries.

While resistance to improving worker standards is strong among some multinationals, which contend that the competitive environment in which they operate will not allow them to raise standards or wages, increasingly, multinationals have responded to calls for "corporate responsibility" from the U.S., European governments and consumers worldwide. Some firms have turned to auditing agencies, NGOs and business associations to monitor their overseas production, though company-sponsored audits are not able always to provide the kind of accounting necessary to identify problems and provide for real, lasting reforms. Firms have also discovered that improving industrial relations means cooperating with trade unions, which have a far deeper understanding of worker rights and conditions at individual worker sites.

A Bush administration could mean less attention to labor diplomacy since the Republican Party has not traditionally shared many of organized labor's domestic political objectives. There are significant differences between organized labor goals and the early agenda of the new administration. Organized labor has been sharply critical of the Free Trade Agreement of the Americas, faulting it both for process, which labor contends has excluded civil society, and for content -- labor claims that worker rights and environmental concerns are getting short shrift. Labor is concerned that the administration will pursue expanded trade without concern for worker rights. It would be easy, labor fears, for the administration to accept the argument against worker rights that many governments make, namely that such rights issues belong only in the ILO and not in the WTO.

On the other hand, the administration has spoken of its commitment to protecting worker rights. In his remarks to the advisory committee on labor diplomacy on May 9 at the State Department, Secretary Powell noted that "the rights of workers must be protected and supported. It is not enough to say Ôlet's create wealth' if we don't care about the Maria Soledads (a poor Honduran worker) -- workers around the world who struggle to pay basic household and child-rearing costs." Workers should get "the lion's share" of the new wealth created. "Unless we protect labor we truly won't be touching (workers)," with efforts to promote free trade and democracy, Powell concluded.

The U.S. would benefit from engaging international labor in the pursuit of shared goals such as democratization, political stability and equitable economic and social development. An alliance between the U.S. and labor today would focus on worker rights, including ensuring that economic development is not based on the exploitation of child labor, forced labor or employment that discriminates against women and minorities, and on economic justice, ensuring that globalization's benefits flow to all and not simply to the few best placed to profit from it. A revitalized labor diplomacy today would foster democratic freedoms by shoring up fragile democracies, just as the U.S.-labor alliance of the Cold War era did.

Edmund McWilliams is the director for international labor in State's Bureau of Democracy, Human Rights and Labor.