With trade ministers from around the world gathering in Cancun, Mexico this week for a key round of negotiations under the World Trade Organization (WTO), labour unions are complaining loudly that workers’ rights have been excluded from the agenda.
A particularly serious omission, according to the Brussels-based International Confederation of Free Trade Unions (ICFTU), whose members represent some 158 million workers in some 150 countries worldwide, will be discussion of the plight of some 43 million workers in export processing zones (EPZs), areas established by governments to produce or finish goods that contribute directly to global commerce.
EPZs, whose numbers have grown from just 79 in 25 countries in 1975 to some 3,000 in 116 nations in 2002, have become a “symbol of the exploitative nature of today’s (economic) globalization,” according to a new report released by the ICFTU Monday that urges the WTO to work closely with the International Labor Organization (ILO) to ensure that core labour rights, including the right to organize independent unions, are respected in the zones.
“Globalization has the potential to bring prosperity to people across the world, but today’s crude, free market globalization is pushing standards down and leading to massive exploitation,” said the ICFTU’s General Secretary, Guy Ryder, who will be observing the Cancun meeting. “The absence of effective multilateral trade rules to support the standards set by the ILO cannot be allowed to continue, yet governments are refusing to even allow the WTO and the ILO to work together on the problem.”
Critics of economic globalization, including unions and scores of non-governmental organizations (NGOs), that are also converging on Cancun this week, have long argued that, in the absence of enforceable global standards for environmental protection and human rights, big multinational corporations will tend to invest in countries with less regulation in these areas in order to reduce costs.
The result is the so-called “race to the bottom,” as countries compete for foreign investment from these multinationals by, for example, repressing labour unions, failing to enforce environmental laws, or offering far-reaching tax breaks or other incentives to foreign investors, which then make it more difficult for the government to afford essential social and health services.
Because much of foreign investment in developing countries is controlled by multinational corporations that have created a kind of “global assembly line” in which different parts of a final product may be produced, manufactured and assembled in different countries, NGOs and unions insist that the WTO, which oversees the global trading system, should play a key role in enforcing international standards.
“In the absence of effective multilateral trade rules to support the standards set by the ILO,” according to the ICFTU report, “the negative downward spiral of lower standards will continue, as governments compete against each other for foreign investment by offering cheaper labour, tax breaks and other concessions.”
According to the unions and the NGOs, this is particularly true of the EPZs, sometimes referred to as free zones or “maquilas” whose “workers are made to take amphetamines to get them to work harder and faster, where violence and abuse are a daily reality for thousands upon thousands of workers, and where attempts to form unions and bargain collectively for a fair deal are often met with reprisals, sackings and even death threats,” according to the 25-page report, titled Export Processing Zones: Symbols of Exploitation and a Development Dead-End.
EPZs have existed since the early part of the last century but took off during the 1970s, particularly in East Asia, and the 1980s when they spread throughout Central America and the Caribbean as a result of a U.S. initiative to promote foreign investment in a region where U.S. national security was seen as increasingly threatened by poverty and left-wing social movements.
EPZs typically feature factories or plants whose principal purpose is to assemble goods — usually beginning with textiles, garments, and shoes but, in some cases, advancing to more sophisticated products, such as electronic components and computer parts — precisely for export rather than for domestic consumption.
As labour “platforms,” they are often exempted from provisions in national labour codes affecting the right to organize or be paid for overtime. Moreover, governments that support EPZs may be reluctant to enforce local laws, let alone international standards, in EPZs lest they discourage investment.
In many EPZs, a disproportionate number of women — up to 90 per cent in some countries — make up the workforce, in part because they are “considered to be disciplined, meticulous and more compliant than men, and therefore less likely to join a union,” according to the report.
Discrimination and abuses are common in many EPZs, the ICFTU said, citing, for example, pregnancy tests, including humiliating physical examinations, imposed by some employers in Mexican maquilas. In the Philippines, employers have forced their workforce to take amphetamines to meet tight production deadlines imposed by their contractors, including well-known multinational clothing and footwear brands.
Physical violence against workers who try to organize a union is also not unknown, according to the report, which cited an employer in EPZs in the Dominican Republic, Grupo M, which allegedly hired thugs to detain and beat workers. The report noted that the company has applied for a $23-million loan from the World Bank ‘s International Finance Corporation (IFC).
While governments have used EPZs as ways to attract investment, create employment and gain hard currency and technology, critics, including unions, have argued that they often turn out, as the title of the ICFTU report suggests, to be a “development dead-end.”
“By its very nature, EPZ investment is precarious, and likely to leave the country at a moment’s notice if a cheaper, more compliant workforce is on offer somewhere else,” according to the report. Indonesia, for example, which became a magnet for the footwear multinationals in the 1990s, has had a difficult time retaining plants in the face of recent competition from Vietnam where wages are lower.
Similarly, China’s economic zones, where independent unions are actively repressed, have drawn tens of billions of dollars in investment in recent years due to a relatively well-educated workforce that toils for as little as $1.20 U.S. a day. As the report notes, the emergence of China as an increasingly dominant player in the competition for foreign investment not only has come at the expense of assembly industries in the rest of Asia, but is also responsible for the closings of maquilas as far away as the Caribbean Basin and Mexico.
“The Cancun meeting,” according to the ICFTU, “must take a decision that human rights, including fundamental workers’ rights, take priority over trade rules, and should start working on this without delay.”
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