Trade unions, free trade and the problem of transnational solidarity

Successfully contesting neoliberal globalisation will require more transnational solidarity between trade unions

Andreas BielerTensions between European trade unions and unions from the Global South over international free trade developed into open confrontation during talks over the revival of the Doha round of World Trade Organization (WTO) talks in 2008.

The European Metal Workers Federation (EMF) and the European Automobile Manufacturers’ Association (ACEA) published two joint press releases demanding reciprocal market access in developed, emerging and developing countries. This led to an angry response by trade unions in the Global South, especially the Confederation of South African Trade Unions (COSATU). The EMF was accused of undermining workers’ solidarity, since their co-operation with European employers in demanding equal market access implied job losses in the Global South and undermined the internal unity of the International Trade Union Confederation (ITUC).

In a liberal understanding of capitalist development, free trade is regarded as a win-win situation, a positive-sum game. As David Ricardo famously argued, if every country concentrates on producing and exporting what it is best at and imports all the other necessities, an optimum outcome to the benefit of everybody will result. However, reality has awkwardly unmasked the false promises of liberal economic thinking.

A study by War on Want shows that global economic growth in the 1980s and 1990s, which was the heyday of neoliberal globalisation, was slower than in the 1960s and 1970s. The number of people unemployed, insecurely employed or underemployed also increased significantly. Developing countries were the main losers in this period, with trade liberalisation often implying for them deindustrialisation and import dependence.

Workers in industrialised countries have come to be predominantly employed in high-valued added, high-productivity production processes.  From 1945 onwards they also made significant achievements within national social pacts.  I mean by this that, in exchange for accepting private ownership of the means of production and capital’s consequent prerogative over the organisation of the work process, they were allowed to participate in increasing profits through rising wages and expansive welfare states.  In such a context increasing exports through free trade agreements also meant more secure jobs and more income for workers.

By contrast, workers in the Global South have not experienced these positive dynamics. They have mainly been integrated into the global economy as exporters of agricultural goods and raw materials.  Where there has been a diffusion of manufacturing, especially since the 1970s, it has often been in labour-intensive industries characterised by low productivity.  Even China, often hailed as a developmental success story by liberals, continues to rely on its vast army of cheap labour to remain competitive.

With services becoming ever more important for the generation of wealth, it is no surprise that income inequalities between developing and developed countries have remained.  At the global level, free trade generally links countries in the core, which export high-productivity/high-value added goods and increasingly services, with countries in the periphery, whose exports tend to be based on low productivity.  As Ernest Mandel argued, countries in the periphery have become locked into relations of unequal exchange in which surplus value is transferred from the periphery to core. The result has been an intensely polarised world order.

The important point from my perspective is that, as a result of this unevenness, different national trade unions are in different positions within the production relations of global capitalism. Unsurprisingly in such circumstances, transnational solidarity is difficult to achieve.  And yet it is not impossible either.

The experience of trade unions in the Americas shows what can be done.  When the North American Free Trade Agreement (NAFTA) came into force in January 1994, there was no common trade union position. While the Canadian Labour Congress had been opposed, the main Mexican trade union confederation supported the agreement. The US trade unions presented a mixed picture.

However, as a result of actually living with and dealing with NAFTA, a common position has emerged over time. This goes beyond a rejection of neoliberal free trade agreements, such as the defeated Free Trade Area of the Americas initiative.  As Bruno Ciccaglione, the European co-ordinator of the Seattle to Brussels Network, makes clear in a recent report, it also seeks to promote a different model of integration to free trade by proposing alternative trade rules and attempting to give a new centrality to the state and to participatory democratic processes. Related strategies also include cross-border co-operation with trade unions, as well as alliances with other social movements, thereby generating a common consciousness at the transnational level. In other words, as a result of concrete struggles against free trade initiatives in the Americas, labour has moved to show greater transnational solidarity.

Over time, this may even provide a basis for developing new ways of organising trade between countries. The Bolivarian Alliance for the Americas (ALBA) is already one practical example of this potential. Its emergence in 2004 was based upon a treaty between Venezuela and Cuba, with the former providing petroleum to the latter at very favourable prices in exchange for Cuban doctors and teachers moving to work in some of Venezuela’s poorest states.  Direct negotiations between two countries thus replaced a reliance on prices set by the market. It will be important to build on these experiences in moving towards a new global order based on transnational solidarity.