The European Union was built on the pursuit of peace, but also the pursuit of prosperity and equity - a similar challenge to the one confronting us today on a global level. European integration was always about more than increasing cross-border trade. From the beginning it was clear that the Single Market would not be possible without closing the economic gap between the rich and poor member states and between rich and poor regions within the members states. Although the EU was predominantly about economic integration, gradually a Social Europe developed, with values of social cohesion and solidarity, sustainable development and economic growth, as interlinked points of the same triangle.
The values of a Social Europe are embodied in the Charter of Fundamental Rights, which proclaims the indivisibility of civil, political, economic, social, cultural and trade union rights, and which may shortly be introduced into the EU Treaty. In the Lisbon Conclusions of 2000, the EU stated its goal of becoming a dynamic, competitive, sustainable, knowledge-based economy, enjoying full employment and strengthening social cohesion, explicitly acknowledging that sustainable development means that economic, employment and social factors must be in equilibrium.
The understanding that the development of a sustainable community required the equilibrium of economic, social and environmental considerations, is a particularly European contribution to the globalisation debate. The EU has promoted the concept of a "mondialisation maitrisée" (controlled globalisation), where trade should not be an end in itself but rather be harnessed as a means to achieving sustainable social and economic development. Through trade the hungry will gain access to food, the sick access to medicine, and the poor access to employment. But if trade is to achieve this, the rules need to change.
Effects of trade
The vast expansion in global trade and investment has had profound but uneven effects on poverty reduction and social standards around the world. Trade restrictions have been lifted at different rates across different sectors, and this has largely been in favour of the richer countries - for instance, the US still retains a 17% tariff on all garment imports. At the same time, opportunities to compete in the agricultural sector are denied developing countries because of fiercely protected EU and US subsidies, which results in dumping cheap food on poorer countries bankrupting local producers. From UN figures it has been estimated that poor countries lose 2 billion Euro a day because of unjust trade rules - some fourteen times the amount they receive in development aid.
Increased trade has been fuelled by the reduction of regulations, so-called liberalisation; lowering of tariffs; and, increased technology. This has strengthened the hand of the large transnational corporations, who move around the world in search of cheaper labour, lower regulations and higher profits. It has also reduced the ability of governments to control them.
The World Bank and the IMF have imposed policies based on the tenets of fiscal austerity, privatisation, market liberalisation and export promotion, which highly indebted countries, wishing to secure loans, foreign investment and debt relief, have been forced to accept. Debt repayment was a strong factor in pushing states to switch from the production of food for national consumption to the production of crops to be sold on foreign markets. Competition for foreign direct investment has led to the profusion of export processing zones, where international labour standards are waived to attract private businesses. Millions of people, in developing and developed countries alike, have no choice but to take up work which is not recognised, recorded, protected or regulated by public authorities, and who receive little or no legal or social protection for themselves or their families.
Simultaneously, the WTO has developed unprecedented powers to intervene in what were previously domestic policy concerns. This has not been accompanied by any social, development, gender or environmental dimension.
Putting poverty first
The real issue is how to redress the fundamental imbalance in the global rules, and to control trade in a fast globalising world. Effective social and environmental rules and regulations are needed to ensure that trade and finance can be subject to political scrutiny and democratic control, and thus used in the fight against global poverty.
Many governments are formally committed to the objectives of sustainable social, economic and environmental development via the UN Millennium Development Goals, declarations and plans of action of the major UN Summits, and the International Labour Organization (ILO) Declaration on Fundamental Principles and Rights at Work. These publicly-endorsed values represent an international consensus on the interdependence of economic, social, cultural, political and civil rights.
And yet none of these carry much weight against the rules of the WTO. If trade is truly to be a means of increasing wealth and health and alleviating poverty, then the rules need to change. It is not just a question of giving more time to developing countries to adapt to existing trade agreements. Poverty alleviation should be made the central feature of international trade agreements. It should be made the end product in international trade negotiations, and trade the means of obtaining that end.
Balancing trade rights
The multilateral trading system can only work for people if trade rights are not allowed to impinge on fundamental social rights. A stronger mechanism of global governance is needed to create an equilibrium between trade, environment, social development, public health and human rights.
There are ways to do this. For example, one step in favour of international labour standards would be to establish collaboration between WTO and ILO. The ILO’s new World Commission on the Social Dimension of Globalisation provides an open door. Another is to include social, labour, gender, environment and development concerns in the WTO’s trade policy review mechanism. Ideally, a legally binding statement by members would put WTO rules as secondary to fundamental human rights as well as environment, health and safety rights.
A more radical suggestion is the creation of a new World Social Organisation, put forward by Noreena Hertz at the International Conference on Globalisation in October 2001. She describes an organisation that pulls together labour, social, environmental, welfare and human rights codes, with equally effective powers of enforcement as WTO. In the case of a clash between the two, an adjudication mechanism would act to mitigate between the different interests so as best to serve the public good.
The intellectual analysis of how the trade system has not delivered for the poor, for the environment and for development, has now been made and won. The "development" rhetoric of the Doha Agenda is proof of that. What is still in contention is whether the trading system can be mastered so that it works for people. At the Doha ministerial meeting in Qatar in November 2001, the WTO was handed the lifeline. Now the rhetoric will have to be translated into deeds. Should the WTO and its members fall short of this challenge, the political alliances that oppose the present multilateral trading system may prove too powerful to resist.
SOLIDAR is an independent international alliance of non-governmental organisations (NGOs) working in development and humanitarian aid, social policy and social service provision. SOLIDAR promotes economic and social justice for all, in Europe and world-wide, in alliance with trade unions and organisations of the labour movement.
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Genevra Forwood SOLIDAR Rue du Commerce 22 1000 Brussels Belgium Website www.solidar.org E-mail: genevra@solidar.org
