BY JANET PARKER
What was once a debate between free traders and protectionists has now become posed as a debate between free traders and those championing the notion of "fair trade".
While the notion of fair trade has only come to prominence in Australia recently — being raised in particular by Doug Cameron, national secretary of the Australian Manufacturing Workers Union (AMWU) — it has been around for some time and means different things to different people.
When it was originally put forward 30-35 years ago the concept of "fair trade" was about trying to improve the lot of ordinary people in Third World countries through retail cooperatives in the developed capitalist countries directly buying at 25-40% more than world market price agricultural produce such as tea and coffee from farmers' cooperatives in countries like Sri Lanka, Papua New Guinea and Colombia.
The concept of "fair trade" that became such a point of contention at the November 1999 meeting of the World Trade Organisation (WTO) in Seattle — the "fair trade" idea that is promoted by the International Confederation of Free Trade Unions, other union federations around the globe including the Australian Council of Trade Unions and a whole range of non-government organisations (NGOs) — is very different.
The essence of this concept of "fair trade" is that all international trade rules negotiated through the WTO should be subject to "social clauses", i.e., to specified labour standards such as prohibitions on the use of child labour.
Some "fair trade" advocates, for example the NGO counter-conference held at the time of the July 2000 UN Social Summit Review in Geneva, call for international trade rules to be subject to the entire range of international human rights treaties such as the Universal Declaration of Human Rights, the International Covenant on Civil and Political Rights, the Convention on the Elimination of All Forms of Discrimination Against Women, the International Covenant on Economic, Social and Cultural Rights.
In this country, Doug Cameron has pushed for the introduction of a "social tariff" in which goods imported from countries with oppressive labour laws and practices and/or no environmental regulations would have a customs tariff imposed on them. The proceeds from the tariff would be used then either as development aid or as assistance to Australian companies that have to compete with these imports.
How should those who want to promote international solidarity among workers respond this debate about free trade or fair trade?
In a presentation posted on the NSW Trades and Labor Council's "Worker On Line" Internet list, ALP shadow trade minister Peter Cook lauds the alleged benefits of free trade. If poor countries cannot sell their goods and services on global open markets, he says, then they remain locked in poverty, dependent on foreign aid hand-outs to survive.
Cook thus accepts the false idea that all countries, rich and poor, can trade alike on a "level playing field" that is free of institutional privileges for any particular country or group of countries.
But ever since the world market came into being with the opening up of trade routes between western Europe and Africa, Asia and the Americas in the 15th and 16th centuries, natural resources and socially produced wealth (as well as human labour power) have been extracted from Africa, Asia and Latin America (the countries of the Third World or the "South") and accumulated by traders, bankers and industrialists in western Europe and the European colonial settler-states (the USA, Canada, Australia and New Zealand) and (from the end of 19th century) Japan — the so-called First World, or what is today called the "North".
The wealth accumulated in the hands of the capitalists of the North through several centuries of plunder and colonial exploitation of the South enabled the North to build-up a monopoly of advanced industrial technology. This monopoly gives the countries of the North an enormous advantage over the South within the world market.
Furthermore, it is the governments and corporations of the North that fix the rules for world market, so that "free trade" is played out on a field that far from being level, slopes ever more steeply in their favour.
The "free trade" doctrine, in essence, requires countries to focus on what's called their "competitive advantage", i.e., those goods and services which they're best placed to sell on the world market. The earnings from these exports are then supposed to fund their import requirements.
But it's just not possible after four centuries of colonial exploitation for the countries of the South to even begin to compete with the developed capitalist countries.
The legacy of this exploitation has left many of the countries of the South dependent on just a handful of exports like cocoa, coffee, sugar or mineral raw materials the prices of which fluctuate wildly.
Even when Third World countries do have some finished manufactures to export, because of the North's monopoly of advance industrial technology much more labour-time must go into their production than into equivalent finished manufactures produced in the North. Thus, while it takes about 26 worker-hours to manufacture a car in South Korea it takes only about 16 worker-hours to manufacture car in Japan, the USA or Australia.
Customs tariffs have been necessary for underdeveloped countries to protect their fledgling industries from being destroyed by imports from the developed capitalist countries.
Most of the countries of the North, e.g., the USA, Germany, Japan, etc., would not have been able to build-up nationally integrated, industrialised economies if they hadn't imposed tariffs on imported manufactures during the 19th century — when England dominated world exports of industrially produced goods. Not surprisingly, at that time it was only the English capitalists and their politicians and economists who championed the idea of "free trade".
During the Cold War competition for political influence in the South between the developed capitalist countries of the First World and the post-capitalist societies of the Second World (the "Soviet bloc"), the North was forced to allow Third World countries to employ tariffs to partially protect their fledgling industrial development. But with the end of the Cold War, the South's former colonial masters in the North no longer have any political need to make such economic concessions to the South.
Over the last decade or so, the South's protective measures have been destroyed by "free trade" agreements imposed by the International Monetary Fund and the WTO. These agreements reduce Third World restrictions on imports from the North (thereby improving First World corporations access to Third World markets) while the developed capitalist countries have set up tariff walls that restrict Third World exports from entering First World markets!
In his speech to the G77 Summit of Third World leaders held in Havana in April this year, Cuban President Fidel Castro correctly observed that "In the hands of the rich countries, world trade is already an instrument of domination, which under neoliberal globalisation will become an increasingly useful element to perpetuate and sharpen inequalities as well as a theatre for strong disputes among developed countries for control over the present and future markets".
Castro went on to point out that "Trade liberalisation has essentially constituted in the unilateral removal of protection instruments by the South".
"The wealthy nations", Cuba's Marxist leader explained, "have fostered liberalisation in strategic sectors associated with advanced technology where they enjoy enormous advantages that the deregulated markets tend to augment. These are the classic cases of services, information technology and telecommunications.
"On the other hand, agriculture and textiles, two particularly significant sectors for our countries, have not even been able to remove the restrictions agreed upon during the Uruguay Round [of world trade negotiations] because they are not of interest to developed countries."
Castro pointed out that in the countries that are members of the Organisation for Economic Cooperation and Development (OECD), "the club of the wealthiest, the average tariff applied to manufactured exports from underdeveloped countries is four times higher than that applied to the club member countries". He added that a "real wall of non-tariff barriers" has also been raised "that leaves out the South countries".
The liberalisation of trade imposed on the South has rendered 1.6 billion people worse off than at the beginning of the 1980s. Some 820 million people are malnourished, 790 million of them in the Third World. It's estimated that 507 million people in the South today will not live to see their 40th birthday!
In this context, "fair" trade surely sounds better than "free" trade. But is it?
We know the response of Third World governments and NGOs to the "social clause" proposal that came up at Seattle. It was overwhelmingly rejected by these countries. They condemned it as covert First World protectionism and yet another manoeuvre to deny them access to First World markets. They pointed out that the US is a signatory to only one of the seven core International Labour Organisation conventions that a social clause would be based on.
And what of Australia? Australia flouts these conventions on a number of fronts thanks to Peter Reith's Workplace Relations Act and the Western Australian Premier Richard Court "third wave" industrial legislation in WA. Indeed, many First World countries feature in the ILO's recently published list of those flouting the conventions.
Would First World countries' exports be subject to this "fair trade" social clauses? Could you, in your wildest dreams, imagine the US government allowing such a clause to be used to ban Nike from importing into the US the shoes it has made by workers in Indonesia or Vietnam on a few dollars a day into the US?
Apart from the concern that the penalties proposed in "fair trade" social clauses would be selectively imposed, we have to ask ourselves: Will strengthening of powers of the WTO help working people anywhere? Do we really want to give more power to an institution that has caused the ever-widening gap between rich and poor nations? To the contrary, rather than arguing to give the WTO more powers to police the world market for the benefit of the big corporations, we should be campaigning for its abolition!
What about Doug Cameron's social tariff proposal? He claims that his proposal is about lifting the living standards of working people around the world. But will his proposal lift the conditions of those workers or will it lose them their jobs and render them completely unable to feed themselves and/or their families?
Let' look at the issue around which Cameron and other "fair trade" advocates make their case. While it's well-known that many companies will seek to employ child labour as particularly cheap labour, it is equally true that these children are in the work force and not at school because they have no other means of survival.
When I was in Indonesia in 1998 and the effects of the economic collapse were setting in, there was a great deal of concern about the number of school enrolments dropping dramatically. This wasn't due to employers actively recruiting child labour but rather due to the fact that millions of children's families could no longer afford to have them in school. These children had to go out and help their families eke out a living in whatever way they could.
Since then the situation has worsened. For example, the UN estimates that one-third of all Indonesian children are malnourished.
So Indonesian children are already being penalised by the IMF-imposed austerity program which will effectively double the cost of living for the masses of Indonesian poor. No social clause is going to turn this around. The whole system has to be changed.
Even the initiators of the "fair trade" activity that I mentioned at beginning of this article recognise that in the end, they're only tinkering at the edges. "No-one can feel satisfied", they conclude the April 2000 fair-trade edition of New Internationalist, "until fair trade benefits everyone. For that to happen political change is essential."
A real working-class internationalist response has to apply the old maxim "An injury to one is an injury to all" and that should apply not just within a particular industry, nor within Australia's borders but internationally.
What this means concretely for the labour movement in Australia can be illustrated by the situation in Indonesia. In the post-Suharto period unions and workers committees in Indonesia are establishing themselves and organising in defence of their rights. But with the military still playing a significant role in politics, strikes and protests are still subject to military attack.
The Australian trade union movement should be supporting the call by the militant Indonesian Front for Workers' Struggle (FNPBI) for an end to military involvement in political life, demanding that the Howard government cut all ties with the Indonesian military.
Material aid is desperately needed by the FNPBI to establish offices, to fund union organisers, and to produce regular publications. Australian unions could also train and help provide facilities for training organisers from other countries, though the content of the training courses should be discussed with an approved by the Indonesian labour organisers. Australian trade unions should cooperate with Indonesian labour organisers to organise exposure tours of their members to Indonesia to get a first-hand idea of the economic and political conditions faced by workers in Indonesia.
I've used the example of Indonesia, but these same types of projects could be employed in a great many other countries to help strengthen worker organisations so they can better wage their own struggles for decent wages and working conditions.
This is the opposite approach to that taken by the advocates of "fair trade" social clauses. Their approach seeks to strengthen the ability of the institutions that maintain and promote global inequality — the WTO, First World governments and corporations — to penalise the poor countries for the consequences of their impoverishment at the hands of these same institutions.
Rather than advocating this covert form of First World protectionism, we should demand that the governments of the First World actually negotiate to unfair trade agreements with the Third World, i.e., agreements that compensate the Third World for the plunder and colonial exploitation they have been subjected to by the First World. As Fidel Castro observed in his G77 summit speech, "such differential treatment would not only recognise the enormous differences in development that prevent the use of the same yardstick for the rich and the poor but also a historically colonial past that demands compensation".
[Janet Parker is a member of the national committee of the Democratic Socialist Party and Sydney convenor of Action in Solidarity with Indonesia and East Timor (ASIET).]