00-02

Testimony of Richard L. Trumka

Secretary-Treasurer

American Federation of Labor and Congress of Industrial Organizations

Before the Senate Finance Committee

on the Outcome of the World Trade Organization Ministerial in Seattle

February 10, 2000

Mr. Chairman, members of the Committee, I thank you for the opportunity to appear here today on behalf of the AFL-CIO and our thirteen million members.

It is crucially important that we all understand and appreciate what happened in Seattle, and that we learn the right lessons from the breakdown in negotiations, from the tens of thousands of people in the streets, and from the realities of the current global economy.

We all have a tendency to view these events through our own lens. Many of those who have given testimony here today have stressed the upside of the global economy -- rapidly growing trade and investment flows, a booming stock market, and job creation here in the United States.

But I speak to you today on behalf of working families -- here in the United States and also across the world. And working families have experienced a different side of the global economy.

From our side of the bargaining table, it appears that the current rules of the global economy have been used to tilt the odds in favor of corporations at the expense of workers, family farmers, the environment, and sometimes small businesses. These rules have freed up corporations to move production around the globe in search of the most vulnerable and disenfranchised workers and the most lax regulation. These rules have pressured governments to cut social spending, to weaken labor laws, and to export their way out of every corner.

We don't experience the global economy described by the so-called free traders - an economy that evenly spreads wealth and opportunity, and that brings prosperity, which in turn improves rights.

We live in a global economy where income inequality is at an all-time high, and growing - both between and within countries. We live in a global economy ravaged by financial crises and speculative booms and busts, where workers pay the high price of adjustment and speculators are bailed out. We live in a global economy where the largest companies in the world, headed by some of the richest people in the world, sell over-priced goods to relatively wealthy consumers, pay their workers too little to buy a quart of milk or a pound of beans for their family, put factories in countries where organizing an independent labor union can be a death sentence, and spend millions of dollars a year fending off union organizing drives.

But at the end of the day, we are all living in the same global economy. Rosy predictions and corporate cheerleading cannot change this face of the global economy. That is our job - yours as members of Congress, mine as Secretary-Treasurer of the AFL-CIO - to insist that governments craft rules for this global economy that will deliver better outcomes - to workers, as well as employers, and to small, poor countries, as well as to big, rich ones.

The lesson of Seattle that we all must learn is that there can be no going back. The American people and the U.S. Congress have rejected new trade agreements that simply replicate the old ones. The member countries of the WTO have called for a time-out on further trade talks until we have a better common understanding of the impact of past trade and financial liberalization on income inequality, on development, and on global financial markets. Many diverse voices in Seattle called for institutional reforms to ensure that the WTO operate with more democratic accountability and transparency.

The AFL-CIO believes that the WTO must carry out the following reforms if it is to survive as a legitimate and politically viable institution:

• Incorporate enforceable rules on core workers' rights (including the freedom of association, the right to bargain collectively, and prohibitions on child labor, forced labor and discrimination in employment).



• Establish accession criteria requiring that new WTO members are in compliance with core workers' rights.



• Overhaul existing rules to strengthen national safeguard protections in the case of import surges and ensure that trade rules do not override legitimate domestic regulations.



• Develop stricter rules against the mandatory transfer of technology, production, and production techniques.



• Ensure that WTO rules do not create pressure on governments to privatize public services.



• Carry out institutional reforms, enhancing transparency, accountability and access, so that citizens can understand the basis for WTO decisions, as well as provide meaningful input to this process.



• Provide more technical and legal support to developing countries so their participation in negotiations is not hampered by lack of resources or technical expertise.

It is also essential that the U.S. government enforce its existing trade laws effectively and consistently. I am particularly frustrated with the Administration's prolonged inaction on the steel wire rod Section 201 case. A decision was due from the Administration on September 27 - now more than four months ago. In the meantime, imports are continuing to grow, and thousands of steelworkers' jobs have been put at risk. The steelworkers played by the rules, and they have waited patiently for a decision, but their patience is wearing thin. They deserve a timely decision and appropriate action.

If we do not do better in the future -- if the global system continues to generate growing inequality, environmental destruction and a race to the bottom for working people -- then I can assure you, it will generate broad opposition that will make Seattle look tame.

All of us need to think anew. Leaders of the global institutions face a legitimacy crisis that cannot be solved by better public relations and more educational campaigns. Their institutions will become more accountable, or more irrelevant.

Developing nations face a growing inequality of income and hope. They should not be forced into one economic strait-jacket. For they will either find ways to empower workers and protect the environment, or face growing popular resistance.

Heads of global corporations and banks must not be misled by their own rhetoric. They will be held accountable for how they do business -- by consumers, by workers, by governments. Leaders of the corporate community must join the effort to establish enforceable laws that put limits on cut-throat competition. It is in the interest of multinational corporations and the governments that regulate them to have rules that are agreed upon by all.

Labor leaders across the world also must change to meet the new challenges. At the AFL-CIO, we know that we have to deepen our own growing internationalism, and develop new sophistication in bargaining and organizing across national lines.

We also recognize that we must join our voices with those in developing countries calling for high-road development strategies. We must work to ensure that developing countries are no longer crippled by crushing debt burdens, and that they have the resources they need to engage in trade negotiations on an equal footing, as well as the technical support to implement and enforce labor and environmental standards.

Seattle marked a crossroads. Now, joined by millions of others across the world, we pledge not to rest, but to continue to press for core workers' rights that are the basis of economic freedom and equitable development.

It is important for you in Congress to recognize that these views are shared by a broad and growing majority -- both in the United States, where voters overwhelmingly believe that workers' rights and environmental protections should be enforced in the global economy, and across the world, by working people whose voices too often go unheard.

None of the issues I have raised here today are addressed in the bilateral accession agreement the U.S. government signed with China late last year. The Chinese government's abysmal record of violating its citizens' fundamental human rights to freedom of speech, religion, and association will be harder, not easier, to challenge if Congress grants permanent Normal Trade Relations (NTR). The Chinese government's woeful record of violating the terms of trade agreements it has signed will likely be worsened, not improved, if the United States agrees to grant permanent NTR. If Congress gives up its right to an annual review of China's human rights record and trade compliance, the pressure to reform will be off the Chinese government. It is absolutely essential that Congress take a firm and principled position against permanent NTR, so that we can begin to build a global economy that lives up to its potential and to our expectations.

Here, let us all agree on one thing: that business as usual cannot be the order of the day. This global economy will either be reformed or face ever greater resistance.

I thank you for your attention and I look forward to your questions.