Trade Policy

By giving firms a new supply of low-wage labor, the doubling of the global workforce has weakened the bargaining position of workers in the advanced countries and in many developing countries as well.
~ Richard Freeman, Harvard trade economist

The link between poverty, hunger, and vulnerability to exploitation seems self evident. The global demand for ever cheaper food has ironically led to greater food privation among the poorest of the developing world. Twenty-five years ago, while a million Ethiopians died of starvation, they exported beans to the United Kingdom.  When famine threatened Sudan in 1989, they exported almost half a million tons of sorghum to the European Community for animal feed! Recently, in 2009, people in Burma, Haiti, Ethiopia and the Sudan starved while food they grew was exported. How and why are such policies pursued? Global markets that permit the unfettered flow of capital are part of the explanation. Governments responding firstly to the business sector become dependent on foreign dollars. Corruption and nepotism may also play their part. Trans-national corporations are the new slave masters. But efforts to rein in corporate power have been met with cries of ‘socialism’, ‘restraint of trade’, or a danger to ‘free markets’.  In her excellent book Cheap: The High Cost of Discount Culture, Ellen Rupel Shell remarks:

“The genie of globalism has escaped the bottle, and it will never squeeze back in. Trade is and must be free. But globalism means more than the system of mutual exploitation it has become. Preying on the developing world’s vulnerabilities to feed our penchant for CHEAP is neither defensible nor sustainable. As (economist David) Ricardo so eloquently revealed, nations thrive in a symbiotic – not parasitic – relationship. International environmental and human rights protections should be enforced, but doing so will require the mustering of the public will around the world and an enormous infusion of funds unlikely to be available in the short term. For now we must begin at home.”

Which brings us to the question of imports.


American companies claim to require fair and decent work policies abroad, but are unwilling to pay the prices to support those policies. Instead they typically play one labor market against another to maximize their profits. Robert Pollin, professor of labor economics at the University of Massachusetts at Amherst, has calculated that if wages in developing countries like Mexico were raised 30 percent, the reflection in retail U.S. price would amount to no more than 1.2 percent. A $20 shirt would cost less than a quarter more! During our own period of industrial growth, child labor and sweatshop labor, with all their consequences, were near at hand and apparent to the end consumers. Today this abuse occurs unseen half a world away.

Accounting for roughly one quarter of the global workforce, China is the manufacturing powerhouse that now sets the low bar for wages and working conditions. China is also home to the most extensive range of labor abuses in the world. Yet it has become the newest member of the World Trade Organization (WTO) whose rules require that unconditional Most Favored Nation (MFN) status be granted to all its members. By endorsing China’s entry into the WTO, the U.S. and other member states have essentially lost any leverage they may have had to review China’s egregiously abusive labor practices. The foreign-owned corporations which benefit from these practices account for almost two-thirds of the increase in Chinese exports since 1998.

The AFL-CIO and affiliated unions are fighting to include in trade agreements, core human rights and workers’ rights as established by the International Labor Organization: no slave labor, no child labor, freedom from discrimination and freedom to join and form unions. The federation and other world unions have launched a campaign to post these basic rights of workers in every workplace.

United Nations special representative John Ruggie (also a professor at Harvard University) reported to the United Nations Human Rights Council that even business leaders now confirm that their efforts at monitoring their supply chains have been “ineffective” and “unreliable.”

“We keep hearing now, from just about everywhere… monitoring doesn’t work.Just about everybody, at least off the record, will tell you that monitoring of supplier factories doesn’t work because people cheat.”
U.N. expert John Ruggie  (Women’s Wear Daily, June 4, 2009)

The National Labor Committee has been documenting the miserable failure of voluntary corporate monitoring efforts for nearly 20 years.  Nothing will change until corporations are finally held legally accountable to respect local labor laws in the countries in which they produce, as well as the International Labor Organization’s labor rights standards-no child labor, no forced labor, decent working conditions, freedom of association, and the right to organize a union for collective bargaining.

President Barack Obama, Vice President Joe Biden and Secretary of State Hillary Clinton are all co-signers of an anti-sweatshop bill introduced by Senator Byron Dorgan in the Senate and Congressman Michael Michaud in the House. In the last Congress, there were 26 co-sponsors in the Senate and 176 in the House of Representatives.  The United Steelworkers union has been deeply involved in reaching out to members of Congress:

“If Barbie Doll can be legally protected, by intellectual property and copyright laws, we sure as heck ought to be able to provide similar legal protection to the 16-year-old girl in Indonesia who made Barbie.  As things stand now, corporate products-Barbie, Nike’s Swoosh, Mickey Mouse-are all protected by enforceable laws backed up by sanctions.  But the corporations say that providing similar legal protections to the human beings who make the products would be an “impediment to free trade.”

We do not have to allow this!  If a product is made by children, by forced labor, or is made under brutal sweatshop conditions by workers who are beaten, forced to work grueling hours while being cheated of their wages and denied the right to organize, then that product should be prohibited from being imported into the U.S., sold in the U.S. or exported.”

The Decent Working Conditions and Fair Competition Act will soon be re-introduced in the new Senate and House.  Please tell your members of Congress that human beings deserve to have at least the same legal protections as are currently afforded to corporate products and trademarks.  Our economy belongs to the American people every bit as much as it does to the corporations.

Let’s end the race to the bottom in the global sweatshop economy!

The World Trade Organization (WTO)

Currently the WTO does not have any rules addressing labor standards. There is actually a debate going on concerning whether or not the WTO has the responsibility to include labor considerations as part of its trading principles. Some member countries argue that in order to improve labor conditions, actions such as trade sanctions by the WTO should be a potential instrument. These countries insist that trade and labor standards are necessarily related. Developed countries often cite, for instance, the GATT (General Agreement on Tariffs and Trade, precursor of the WTO), Article XX, that allows governments to implement trade restrictions in order “to protect public morals and human life and health.” However, the less developed countries contend that to officially dictate labor standards through the WTO is merely an excuse to impose a form of protectionism aimed at hindering these countries’ competitiveness. Indeed the comparative advantage of many of these countries is inexpensive labor. Developing countries believe that attempting to give the WTO discretion over labor standards would go against the principles of the WTO. It is an institution whose purpose is to promote and ensure free trade, not to judge the morality of domestic policies of individual countries. As for Article XX, the countries argue that the statement pertains to what occurs in the country that is importing products, not the exporting countries and their policies. They say that once economic conditions improve, labor violations would decrease by themselves. At present the WTO leaves issues of labor to the International Labor Organization (ILO).

Top Reasons to Oppose the WTO

TradeJustice.Net: a grassroots coalition of groups and individuals in the New York metropolitan area, united in opposition to so-called “free trade” agreements modeled after NAFTA.

SEE ALSO:  World Bank and the IMF

Related News:

NAFTA on Steroids” by Lori Wallach, The Nation, June 27, 2o12

Newly Leaked TPP Investment Chapter Contains Special Rights for Corporations” by Citizens Trade Campaign, June 13, 2012. 

Responsible Trade Program: Trans-Pacific Partnership Agreement” by Sierra Club’s Labor and Trade Campaign, 2013.

 “House Pushing Back on Trade Deal; More Detail on How Secret Arbitration Panels Undermine Laws and Regulations” by Yves Smith, Naked Capitalism, November 13, 2013

Cavite Farmers Denounce Nestle and GATT-WTO BY DENNIS ESPADA,

American Sugar Policy Leaves a Sour Taste  BY MATT PETERSON | Public Ethics Media | JULY 8, 2009

<previous page ………. next page>

To join us in action and discussion, please visit


%d bloggers like this: