Forms of globalisation and the main players

involved

Turin November 2007

What is globalisation? Globalisation is a degree of interdependence that goes far beyond simple

expansion of international trade. A degree of interdependency. It includes integration of production accross

national boundaries with significant increases in international investment by multinational enterprises.

Extensive and complex network of suppliers. Rapid and mass movements of financial capital. It has profound social and political implications: threat of exclusion for a large

portion of the world's population, unemployment, wage and income disparities, political instability and unrest.

Loss of control by democratic institutions of development and economic policy. Challenge: To find ways to manage change and regulate and structure

globalisation so that it is subject to the popular will, support fundamental rights and brings prosperity to as many people as possible.

The global task of trade unions is to affect policy at the international level, convince governments and enterprises to assume the responsibilities of globalisation.

Some facts of the situation of the world

At the start of the 21st century, over 1 billion people worldwide live on less than 1 American dollar a day

Around half of the world's population, two thirds of whom are women, survive on less than 2 American dollars a day

Over 1 billion people have no access to clean water and over 2.6 billion, more than 40 percent of the world's population, have no access to basic sanitary facilities

Official global unemployment figures reach a record level of over 186 million according to the ILO.

Globalisation is not social World Social Forum in 2005: Global Call to Action Against Poverty. It aims at

mobilising support in favour of fair trade, debt cancellation, more and better aid and concerted efforts to meet the Millennium Development Goals.

Millennium development goals: 1) halve extreme poverty and hunger 2) achieve universal primary school 3) promote gender equality and empower women 4) reduce child mortality 5) improve maternal health 6) combat HIV/AIDS, malaria and other diseases 7) ensure environmental sustainability 8) develop a global partnership for development

Globalisation is anti-unionist: downwards pressure on labour standards. A growing number of countries are having recourse to anti-union repression. ITUC Annual Survey of violations of trade union rights.

Violation of trade union rights Redundancies Independent union action. Severe repression. Shortfalls in the application of labour law. Rejection of globalisation until it is accompanied by strong social dimension and

a globalised social justice.

Meaning of globalisation for workers Globalisation is a challenge for workers and trade unions. Due to the diminished role of national institutions, there has been a certain shift

towards the world level, but without an international framework and institutions in place that can deal effectively with issues of justice and equity.

Changing nature of the employer. New forms of work organisation established as well as changes in the employment

relationship. Competitiveness and flexibility are the main objectives for most of the enterprises. They put workers increasingly into fierce competition with each other, pressuring on

social safety nets and undermining workers´ rights. The challenge facing trade unions is to ensure that structural change and adaptation

are achieved without compromising the goals of full employment and social justice. Trade unions need to convince governments that it is essential to act urgently to

increase and spread more evenly world economic growth. Workers´ rights must be integrated into any agreements related to economic integration.

Players involved in globalisation

Globalisation is the result of several developments and processes that are generally linked together:

Foreign direct investment and an important role for multinationals

Internationalisation of financial markets The increased coordinating role of the international

financial institutions, such as the IMF, World Bank and WTO on governance policies.

Multinationals and foreign direct investment Multinationals protagonists of globalisation Strategy to maximize profits globally thanks to the trade liberalisation, financial

liberalisation and the movement of capital. Foreign direct investment has increased 16 times since 1980 for example. It

goes along with international trade but it is stronger than this. Supranational dimensions International strong economic interdependence propelled by strong growth in

direct foreign investment Today many examples confirm that multinationals use fraud, corruption,

exploitation, failure to uphold the human and basic rights of the workers and do not provide transparent accounts to justify their hold on the global market.

Export processing zones ( ITUC ) ITUC insists on the question of good governance, participative democracy,

respect for the basic rights of the workers and the importance of giving the multinationals a code of conduct based on the respect for the main international conventions of the ILO.

Internationalisation of financial markets Global finance internationalisation means an increase of the volume

and international mobility of capitals, with a major role for the transnational finance corporations organised in complex networks with a high competition among them and the creation of new financial products.

A large number of private and public actors, national and international, legal and illegal interact in this global financial market (national central banks, international financial institutions, banks, investment funds, pension funds, insurance companies, mafias …)

New system of accumulation of capital where production is subordinate to demands of high profit margins.

The whole of the economic activities in the world depend on the interaction of these actors.

Integration of financial markets and development of stock exchange speculation.

International Financial Institutions The policies of the international financial institutions and the failure of the managed

globalisation: need for a change of model The implementation of the Washington consensus, resulted in structural adjustment

policies The policies of the International Financial Institutions aimed to promote privatisation and

deregulation in the interests of the market and of opening up to foreign investment In its annual report “Doing business”, the World Bank asks governments to remove all

rules on employment and to follow the example of states that are not ILO members and where almost no rules on social protection for workers exist.

Pension system reforms: the World Bank has to adopt a new approach (failure of the privatisation of the social security systems in Latin America)

The same model imposed in Central and Eastern Europe The IMF also advocates for the reduction of public social security High level meetings with managing director of the IMF and the president of the World Bank Other regular contacts Washington office International Finance Corporation

World Trade Organisation

Already in 1948, there was a failed attempt to create an “International Trade Organisation”

From 1948 to 1994, the GATT (General Agreement on Tariffs and Trade) provided the rules for world trade: 8 negotiation rounds.

WTO established in 1995. Based in Geneva, small secretariat. Today 151 countries, more than ¾ are developing countries and countries in transition to market economies

World Trade Organisation

Primarily a platform for negotiations (different from the IMF and the WB)

A set of agreements are at the core. They are negotiated and agreed by consensus, and provide the legal framework for global commerce

Division of tasks: WTO staff, General Councils and Ministerial conferences

World Trade Organisation

After the ministerial conferences in Singapore (December 1996), Geneva (1998), Seattle (December 1999), Doha (November 2001), Cancún (September 2003), the 6th WTO Ministerial Conference (Hong Kong) (December 2005) still doesn't face up to the needs of the developing countries and the social problems of trade.

World Trade Organisation In principle, the WTO is a highly democratic institution and the key rule

that needs to be respected is one country-one vote. Each member has the right to veto any decision In theory, for example, Benin has as many votes as the United States

and Bangladesh has as many as the European Union In practice, this principle of “one country, one vote” conceals the

unequal power relations that influence the results of the negotiations within the WTO

The world economic super powers (United States, Europe) have shaped the multilateral regulations based on their national policies (eg, the Agreement on Agriculture defends the subsidies proposed by the EU and the USA)

Agriculture, services and manufacturing mainly.

World Trade Organisation

Democratic deficit even though it supposedly is one of the most democratic international organisations …

Special provisions for developing countries but advantages for large and rich countries (market size, special negotiations, resources …)

A blind belief in trade: no impact assessments on development, employment or the environment

No voice for trade unions

World Trade Organisation

Transparent and democratic structures Prioritising employment Integrating labour standards Coherence with the ILO and the UN Transition programs and aid

World Trade Organisation

The Doha Development Round has never been a real development round

No place for employment or labour standards Difficult to predict the next events and

developments Everybody is waiting to see who moves first

…

What is the international trade union movement doing?

International coordination and lobbying Getting media attention Alliances and political pressure Trade policy reviews

World Commission on the Social Dimension of Globalisation

A fair globalisation: creating opportunities for all A democratic and effective state Sustainable development Productive and equitable markets Fair rules of the global economy Globalisation with solidarity Deeper partnerships between public and private

players, labour, civil society, multilateral institutions A more efficient United Nations

World Commission on the Social Dimension of Globalisation

Towards fair globalisation The need for global macroeconomic policies

for full employment The need for political coherence: important

precondition for change The need for coordinating and control body The need for political action The need for a strong civil society

World Commission on the Social Dimension of Globalisation The capacity of the ILO to promote respect for core labour standards

should be reinforced. There should be stronger action and wider social dialogue to promote

decent work in EPZs and more generally in global production systems. Formal structures of consultation with the international labour

movement should be established in international institutions such as the WTO, the World Bank or the IMF.

The organisations of the multilateral system should examine their own procedures to ensure that there is coherence of action with respect to universal values and human rights, to implement them better in practice and to improve international dialogue.

International organisations should launch policy coherence initiatives in which they work together on the design of more balanced and complementary policies for achieving a fair and inclusive globalisation.

A Globalisation Policy Forum should be established by interested international organisations aiming to achieve a fairer form of globalisation.

World Commission on the Social Dimension of Globalisation

The need for a fairer treatment of developing countries in the international trading system.

Essential role of collective bargaining in promoting productivity, ensuring equality and giving workers a voice at the workplace.

Proposals to create a UN economic and social security council and a global council on global governance.