Wed, Nov 21, 2001 - Page 9 News List

Free trade must also protect labor's rights

Market expansion and the predominance of democracy during the past 25 years must help to overcome poverty of millions of people

By Jorge Arrate

ILLUSTRATION: YU SHA

he development of social rights in the 20th century was based on the notion of establishing mandatory mechanisms to compensate for the imbalances between capital and labor. To face capital's power, a set of regulations were designed -- multilateral and bilateral international treaties as well as regional social charters and national laws and regulations -- with the goal of endowing organized labor with enough power to enable employers and workers to negotiate a wide range of subjects in a balanced framework.

In the last 25 years, the world has seen an unprecedented worldwide expansion of the market as the main economic mechanism. At the same time, democracy has become the planet's predominant political system. Technological changes and a new open economy have endowed capital with extraordinary volatility. Deregulation provided companies with freedoms never before experienced. The imbalances that earlier social legislation helped to alleviate have, as a result, reappeared in capital-labor relations.

Clearly, free trade's expansion has created previously unknown possibilities for specialization, exchange, and economic growth. It is desirable these new opportunities, and more open relations between national economies, help to overcome poverty that afflicts hundreds of millions in the world, many in Latin America.

To insure that free trade achieves its full potential as a catalyst for development, the new wealth it creates must be distributed fairly among and within countries.

Moreover, in this fair distribution it is desirable to provide for advantages for those sectors often excluded from social progress, such as the unemployed and underemployed low-productivity workers, who are in no position to adequately negotiate working conditions and salaries.

But an acceptable distribution of free trade's benefits will be hard to achieve so long as a sharp imbalance between capital and labor persists. While this unequal relationship may not impede economic growth, it makes it impossible to translate the benefits of free trade into greater social justice.

Even in the global economy of the 21st Century, regulatory instruments to insure that free trade translates into social equity are relevant. The conventions of the International Labor Organization (ILO), in particular those known as "basic agreements" (on trade unions, collective bargaining, discrimination, forced labor and child labor) and the concept of "decent work," promoted nowadays by the ILO, are sound instruments towards this goal. In the Americas, the efforts of the Working Group on Labor of MERCOSUR -- the Latin American complement to the North American Free Trade Agreement (NAFTA) -- and other similar tools developed, have yielded valuable experience that should be evaluated, consolidated and consequently promoted.

National labor laws should also balance the need for flexibility for employers with protection of worker's rights. These laws should establish basic rules and define accepted areas of possible negotiation between social parties. Among the options available, those based on the willingness of corporations and business groups to self regulate could open new avenues for action.

Proposals whereby employers make transparent their undertakings on labor and social issues, agreeing to keep the public informed are also worth following. Such transparency is necessary to stimulate better practice, and to progressively improve social and labor conditions.

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