Courtesy Reuters

DON'T GIVE IN TO THE DARK SIDE

By Jagdish Bhagwati

To the Editor:

In "Labor's New Internationalism" (January/February 2000), Jay Mazur paints globalization in garish colors as the enemy of the working class and demands a "seat at the table" for labor unions in trade negotiations and at the World Trade Organization (WTO), "or else." But he hardly persuades.

First, the recent financial crises that Mazur recalls and deplores have little to do with the global freeing of trade. The sins of one cannot be linked to the virtues of the other. If the financial system is broken, the trading system is not what needs fixing.

Second, Mazur produces no evidence to sustain his claim that globalization (outside of the financial crises) "has dramatically increased inequality between and within nations" other than "the most recent U.N. Development Report," which is characteristically short on meaningful analysis. In fact, most empirical studies argue exactly the reverse for trade and direct foreign investment -- two of Mazur's real targets.

Third, Mazur's assertion that the working class in both the North and the South is united in its demand for a seat for unions at the WTO table is simply false. Prior to Seattle, numerous intellectuals and nongovernmental organizations (NGOS) from the developing world issued a statement against linkage of labor standards to the WTO. Known as TWIN-SAL, it was also signed by three trade unions, including two from India whose membership totals several million and nears that of the AFL-CIO -- even though these unions were not actively canvassed.

The reason is straightforward. True, unions everywhere would like labor rights to be advanced. But when trade sanctions are involved, Northern workers see the resulting trade protection as adding to their competitive advantage, whereas Southern workers see it as threatening their competitive position and hence their interests. Mazur's U.S. advisers, like many Washington politicians, are so stuck on trade sanctions and the WTO's inclusion of labor standards that they fail to grasp this elemental point. If they did understand, they would see that their agenda must be refocused on using nontrade instruments like the International Labor Organization -- exactly as some NGOS and unions from the South and nearly all Southern governments, many of them democratic, insist.

Rejecting nontrade measures by ceaselessly reiterating that the ILO has no teeth is foolish. Today, with impartial reviews by an invigorated ILO and an active NGO presence to build retribution on such reviews, a good tongue-lashing could be more productive than trade sanctions that invite reciprocal bites.

Jagdish Bhagwati

Arthur Lehman Professor of Economics, Columbia University

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