Making trade benefit workers

According to Garzotti, labour chapters will be part of any ongoing negotiations on trade agreements, which also provide an active engagement for civil society actors, especially workers and employers. Furthermore, companies that export to the EU would be obliged to comply, among others, with the core labour standards.

Still, for Garzotti beside these efforts, domestic policies in the Global South remain one of the crucial parts in providing structures in which workers can benefit from trade. "In the end, trade is not a silver bullet," he added. "It is a tool that always leads to benefits and disadvantages and, therefore, the goal must be that benefits outnumber disadvantages."

Georgios Altintzis, trade policy officer at the International Trade Union Confederation, demonstrated how developing countries are locked in a prisoner’s dilemma. Providing cheap workforce has long been their only comparative advantage and opportunity to integrate into global trade, he assessed, explaining how enforced labour standards could destroy this advantage.

Supply chains from the Global South should, instead, should group themselves together or by government initiative in consortiums to form their own brand companies, selling their own products on global markets, Altintzis went on to recommend. In this way, these companies can capture more parts of the value of end-products for themselves, increasing their prospects at providing better working conditions for their workers and reinvesting their profits in their states of origin.

Following this reasoning, Altintzis proposed that developing countries should stop introducing trade agreements with developed countries, since this "[…] shrinks their governance space to introduce industry policies which effectively ensure labour standards." Instead, developing countries should cooperate in the international system more closely, while the US and the EU would have the responsibility for making labour standards and other obligations mandatory in their trade agreements.

"If they [developing countries] could form a unified bloc with no one breaking ranks, their international bargaining power would increase significantly, but again in competition with each other they are forced into a race to the bottom and again into a prisoner’s dilemma," Altintzis concluded. ###

Matthias Pesch is an intern at the Geneva office of Friedrich-Ebert-Stiftung. For more information on the CLS+ project, contact <link about contact external-link-internal-icon>Veronica Nilsson, Programme Manager at the FES Office for Regional Cooperation in Asia, based in Singapore.