Tuesday, January 29, 2008

Bangladesh 's Anti-Labor Crackdown

The government of Bangladesh, never friendly to worker organizations and their supporters, on January 24 arrested Mehedi Hasan, a field investigator of the Worker Rights Consortium, and kept him in shackles when a lawyer and family members were allowed brief visits.

Hasan, a Bangladeshi national, was in the midst of checking worker rights violations in the garment industry in Dhaka. His organization monitors labor rights compliance on behalf of 178 universities and colleges that market apparel and other products made in Bangladesh and other countries.

Security forces seized Hasan's computer, which contained information from interviews held with workers away from factories. This leads to concerns for the workers' safety.

Hasan's arrest is part of wave of government harassment of unions and their advocates. A Bangladeshi staff person of the AFL-CIO Solidarity Center's Dhaka office was also recently arrested while participating in a worker rights clinic.

In June last year the AFL-CIO filed a petition with the U.S. Trade Representative to withdraw some of Bangladesh's trade benefits unless it ends its most glaring abuses of labor rights. (Scroll down to "Bangladesh's Workers on a 17-Year Treadmill" at http://www.senser.com/008-01.htm.)

For at least 17 years now, the AFL-CIO and other organizations have been pressing USTR to invoke U.S. trade law sanctions because of Bangladesh's non-compliance with that law. USTR has rejected each petition. The current AFL-CIO petition is still pending.
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Monday, January 28, 2008

How Globalization Can Serve Us

Globalization is in trouble, as even many of its ardent supporters agree. But why?

To answer that basic question, I have over time made lists of some basic truths about our rapidly integrating global economy. I tried formulating propositions, short and not too complicated, that make sense, separately and as a whole. My first effort in this direction saw daylight in the May 2007 issue of my Website, Human Rights for Workers, under the title “5 Points on the Sorry State of Globalization.” After reflection, I added more ideas, especially on how globalization can serve us, instead of the other way around.

Here is the latest version, obviously with no assumption that it is writ in stone:

1. Globalization has created a new dimension ‑‑ a vast open space of human activity, an international marketplace ‑‑ outside the traditional jurisdiction of nations and their laws.
2. To establish the rule of law in that open space, governments have created – and are still expanding – a global network of bilateral, regional, subregional, plurilateral, and multilateral agreements laying down cross-border rules on trade, services, investment, intellectual property, and other issues, and have delegated enforcement powers to intergovernmental agencies, with the World Trade Organization at the pinnacle.
3. That global rule of law, however, is partial, in two senses ‑‑ partial as in incomplete and partial as in favoring the rights and interests of one group over others.

4. In its present partial form, globalization protects and promotes the rights and privileges of commerce and capital (particularly multinationals headquartered in the United States, Western Europe, and Japan), to the neglect of labor (the men, women, and children in the international labor market).
5. Those pro‑capital rights and privileges, as written, interpreted, and enforced, are balanced by no ‑‑ or by very ineffective ‑‑ matching responsibilities or accountability, thereby creating a huge global imbalance.
6. That imbalance leads to an imbalance of power that advances the interests and multiplies the wealth of multinational corporations and allied elites, to the disadvantage of other "stakeholders" in all countries, particularly the many millions of vulnerable men, women, and children, as well as the poor communities, deprived of the means to protect their own rights and interests.
7. The imbalance is wrong, grievously and glaringly so, and is increasingly understood as wrong, thanks to improved global communications and the proliferating nongovernmental groups committed to correcting inequities ‑‑ twin developments that are the happy products of globalization.
8. Since globalization itself demonstrates that the well‑being of people can be improved, those now left out are less and less willing to accept their deprived status, and often see themselves as sacrificial lambs to further enrich those already fabulously rich.
9. Explosive consequences are more and more likely if the rightful demands for justice continue to be ignored.
10. Risks have multiplied for the most visible manifestation of globalization – multinational corporations, which at latest count number about 70,000 firms, plus 770,000 subsidiaries, as well as uncounted millions of suppliers in almost every corner of the globe.
11. There is a serious misalignment, or gap, between the scope and impact of multinationals, on the one hand, and the capacity of less developed countries to deal with the behavior and misbehavior of foreign firms.
12. Since the U.S. government, under both Democratic and Republican Administrations, took the lead in determining the unbalanced rules of globalization and in creating the institutions of globalization, it has the responsibility to review those rules and to initiate reforms, but with a strengthened role for Congress, which has the constitutional authority and responsibility to regulate trade.
13. That process of review and reform needs to cover the full range of international policies now grouped together under "trade," including the two significant areas which are not really trade issues ‑‑ the protection of investment/investor rights and the protection of intellectual property rights ‑‑ but may well contribute more to global inequities than ordinary trade does.
14. Given the central role of multinational corporations in globalization, the corporate social responsibility movement, if motivated by more than PR, could help make the global environment conducive to serious reform, but action by governments and intergovernmental agencies is required to produce real and lasting change
15. Integrating socially responsibility into trade rules, and into intergovernmental agencies, is no cure‑all; many other types of private and governmental initiatives are also necessary, especially to insure worker‑friendly practices where people actually work.
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The list introduces you to the scope of this blog. I hope it stimulates you to comment on individual propositions and/or on how they add up as a whole. Take your pick.
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Tuesday, January 15, 2008

China's Censorship as a Restraint of Trade

The greatest free speech case in history – that’s what Peter Scheer, executive director of the California First Amendment Coalition, calls his group’s initiative against Communist China, the biggest suppresser of free speech in the world.

Scheer’s coalition is urging the U.S. government to file a complaint against China for erecting barriers that deny U.S. Internet companies free access to China's market and thereby grossly violating the free trade rules of the World Trade Organization. The potential beneficiaries of a successful complaint would be 1,200,000,000 citizens of China and dozens of foreign multinational corporations trying to sell goods and services in China’s huge market.

The California Coalition made a formal presentation of its case to the staff of the U.S. Trade Representative (USTR) in Washington on November 15. Its briefing paper developed in detail how China’s repression of freedom of information violated key multilateral trade agreements, including the General Agreement on Tariffs and Trade (GATT), which covers trade in goods, and the General Agreement on Trade in Services (GATS).

More Comprehensive Information Still To Come

“We will be submitting further, more comprehensive briefing materials in early January,” Scheer noted in an email to me.

The 1,700-word paper he submitted in November already seems to make a powerful case, especially since China patently violates one of the WTO’s cardinal principles – .the “national treatment” principle, which requires that imported goods and services be treated the same as those produced locally. “The government of China is actively preventing U.S. internet companies from doing business in China, while at the same time promoting Chinese Internet companies in the same or similar activities,” the briefing paper points out. It cites several among the “a wide range of laws and regulations that result in de jure or defacto” discriminatory treatment of U.S. Internet companies.

Earlier in 2007, a leading search engine operating in China, Google Inc., made its own overture to USTR suggesting use of the trade lever to combat Internet censorship. Andrew McClaughlin, Google’s director of public policy, then called censorship “the No. 1 barrier to trade that we face.” (See “Rethinking Censorship, Google, and Free Trade.”) At that time an AP article quoted a USTR spokesperson as saying that a human rights issue such as censorship typically belongs over in the State Department.

The biggest immediate barrier faced by the First Amendment Coalition is the conventional thinking of trade bureaucrats, who can’t quite wrap their minds around a modern development like the Internet. Another huge barrier is the political and economic power that China and other censorship-infected countries have to prevent changes in global trade rules.

When the multilateral trading system was launched 60 years ago, its 23 founding countries unwisely gave dictatorial countries equal status with democratic ones. Why must that equal treatment continue when clearly undeserved, notoriously so in the case of Communist China?
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Yahoo Stockholders: No Free Speech Activists They

At Yahoo's annual general meeting last May, stockholders turned down proposals to put the company firmly on record as opposed to censorship of the Internet. About 85 percent opposed a company anti-censorship policy, and all but 4 percent turned thumbs down on a proposed committee to examine the company's human rights policy in China and elsewhere.
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Economics Prof Instructs NY Times

The editorial writers of the New York Times should arrange to take a refresher course on trade from Dani Rodrik, economics professor at Harvard University's Kennedy School. In the meantime, they can make do with a stern lecture from Rodrik about the flaws in a December 23 Times editorial titled "Trade and Prosperity."

"With most polls showing that voters believe trade with other countries is hurting the American economy, there has been a lot of posturing about the perils of trade on the campaign trail," the Times wrote. It then went on to express concern that Senator Hillary Clinton, rather than posturing, might actually be serious about a "time-out" to review all trade agreements, including the North American Free Trade Agreement, or NAFTA, her husband's prize trade package.

Newspaper Quick To Level 'Protectionist' Charge

Rodrik, author of the new book, "One Economics, Many Recipes: Globalization, Institutions, and Economic Growth" (Princeton), titles his December 23 blog entry "The NYT doesn't get it on trade." Here are the five points he finds wrong with the Times argument:

1. It automatically equates any desire to reconsider trade agreements and take a breather on new agreements as "protectionist."

2. It fails to recognize the ways in which technology and globalization interact to contribute to unequalizing trends in incomes, taking refuge in the defensive statement that "There is scant evidence that trade has played a big role in holding down typical workers’ wages."

3. It follows up this statement with "There is abundant evidence that it has contributed substantially to America’s overall economic growth," ignoring what every student of trade learns, which is that large gains from trade are possible only if there are also large amounts of income redistribution.

4. In portraying the conflict as purely one over incomes, it overlooks what is the greatest strain in the present regime of globalization -- namely, the incompatibility between the scope of markets (straining to become global) and the scope of regulatory institutions (still national).

5. And as a consequence, rather than accept the need to rethink the existing rules of the game, the editorial takes refuge in the same stale recommendations that every trade liberalizer has been offering for the last quarter century at least -- more safety nets, better training, and more progressive income taxation.
Rodrik adds that those ideas about the need for improving social insurance, while not new, need to be revitalized, as he himself urged in his 1997 book, "Has Globalization Gone Too Far?" (Institute for International Economics), and then continues on his blog.

But it is also time to recognize that the WTO rules need to become much more flexible to provide a better balance between international trade and domestic regulatory and other policy priorities -- in other words, to assure domestic electorates that their values and preferences are not being sacrificed to the demands of some globalization agenda constructed, in any case, by a narrow elite.

Rodrik posted the above entry. December 23, with two links referring to previous blog entries.
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