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Chapter 13

Global Unionism: The Challenge

Vic Thorpe

"We all work in the same world. An injury to one is an injury to all - even if the injured one lives on the other side of the planet."

Until very recently, international trade unionists had to hammer that message home everywhere, time and time again. Today, it is common knowledge. 

"Globalisation" is the slogan of our times. Many workers have themselves felt its effects, notably in the form of job losses. Employers and politicians no longer hide the fact that nation states have merged into a one-world economy. On the contrary, they now invite us to "face up to global realities." What they mean, all too often, is that our pay, our conditions and our concepts of human decency should be brought down to the very lowest of common denominators.

Underlying all this is the idea that the world will soon be one big "free market." It is held as dogma that an irresistible force, a sort of natural economic selection, will cut costs and prices, boost growth and usher in prosperity for all. But that new golden age is already looking more like a fool's paradise. And the biggest dupes, unless we are very careful, will be workers and their families everywhere.

Over the past two decades, financiers and industrialists have redrawn the world map of production. Using more flexible technology and a global infrastructure of electronic communications, factories have been shifted from the traditional sites of their investment origins to new ones closer to raw materials, new markets or sources of cheap, unprotected labour.

This "global sourcing" of production is facilitated by an economy in which investment by the big multinational corporations is now a greater force than world trade between nations.

That has been the case for several years now. UNCTAD's 1994 World Investment Report estimated that global sales by multinational companies exceeded 4.8 trillion (million million) US dollars - a larger volume than "world trade" and over 25 percent of the world's gross domestic product (GDP). The previous year's report had shown that, between 1983 and 1990, foreign investment grew three times faster than "world trade" and four times faster than world output. 

By the year 2000, according to a recent study by McKinsey consultants, the global financial market will grow to $83 trillion - equivalent to three times the Gross Domestic Product of all the OECD member countries combined. Ownership of these foreign assets is also highly concentrated, with half the total being owned by just one per cent of the 37,000 companies that have international subsidiaries.

Indeed, the very concept of "free trade" is made ridiculous by the knowledge that one-third of all trade across national borders is simply transfers of stock at internally managed prices between the subsidiaries of the same multinational company; at least another third is sales made by multinationals to other companies; and good part of the remaining third is inputs from smaller national contractors and resource-providers to the same multinationals.

Multinational corporations also dominate the development of new technologies that are licensed to other, smaller producers for carefully defined market areas. Add to this the many thousands of joint ventures, cross-licensing deals and market-sharing arrangements and we have something that looks very like a global market. What it most certainly does not look like is a "free" market.

The message is plain: we are witnessing not just the globalisation but the corporatisation of trade. Now more than ever, the world has a planned economy. But it is planned in secret, behind the boardroom doors of the multinationals. The national political process has lost control over the real world of economics.

Having lost that control, however, national governments have now embraced the inevitable with gusto. Over the past decade or so, they have been unashamedly pandering to the multinationals. 

This can be seen, for example, in the provision of "tax holidays" for inward investors and in national governments' creation of "export processing zones" or "free trade zones" that are often free only for the companies. The workers brought into these zones are frequently deprived of their individual and collective rights. In the competition for investment, governments often curb basic trade union freedoms.

Where once the elected government concerned itself with the welfare of its country's people and measured its success by the well-being of its workforce, its primary concern seems to have shifted to the manipulation of its citizens and workers to meet the demands of corporate investors.

It can be seen, too, in the current worldwide craze for privatisation. As merger and integration between the major multinationals reach a natural plateau, where the leading product markets are subject to oligopolistic control, the next profitable field of expansion lies downward from the global level into the assets held in national public hands. Among the most prized of these assets are the energy utilities.

And it can be seen in the creation of the so-called "World Trade Organisation" in 1995. If the vast majority of trade is dominated by private corporations, why have an organisation that continues to pretend that trade is manipulated by governments? The reason is that the real goal of the WTO is to establish complete "freedom" of investment, actually eliminating what little remains of national and governmental control over the activities of the multinationals. Any government that tries to intervene will be penalised. 

But while deregulating investment, the WTO will be enforcing tight new regulations on "intellectual property" - in other words, the knowledge built into the processes and products for which the multinationals hold most of the patents and trademarks. No loose talk about "freedom" there. World capital is getting the best of both worlds.

Yet, precisely at this time of unparalleled corporate power, the trade union movement has tended to concentrate more and more of its efforts on lobbying governments. If the aim is to gain influence in the changing world about us, then frankly we have been talking to the wrong people!

So where should labour - and, for that matter, the public at large - direct their attention in the hope of some relief? Since political and social forces currently have no effective presence at the global level, is it possible to solve our problems by addressing ourselves to the institutions which are emerging at the regional level, where those political and social forces are trying to regroup after the rout?

My answer would be - it depends on what you are expecting them to deliver.

For a start, it is entirely wrong in my view to see the regional groupings - the European Union, NAFTA/MERCOSUL, APEC or ASEAN - as new nodes of production for the world economy. Production is now sourced on a global basis. The world is the multinationals' oyster!

Secondly, and despite the constant rhetoric, the regional accords have nothing to do with so-called "free trade." The concept of international trade is now devoid of meaning except in the sense of exchanges between - or, increasingly, within - individual companies. And the regional agreements themselves are far from free of regulations. The General Agreement on Tariffs and Trade (GATT) is encyclopaedic in its proportions, the NAFTA agreement stretches to over 2,000 pages of dense prose, and the treaties, rules and regulations of the European Union require a whole separate nation of bureaucrats to draft, interpret and administer them.

Rather than deregulating transactions, these agreements seek to provide a comprehensive framework that will encourage and protect multinational property and which will delineate new, enlarged markets. The purpose of encouraging a broader and more cohesive set of markets is to limit the need for product diversification and to assist integrated production. It is much easier and more efficient, for example, to market a European car - even though it may be actually produced in a series of specialised and globally dispersed satellites - than to design and build a distinct national model for each country of the region. And the "world car" is already on the horizon.

The limits of regionalism are perhaps most clearly shown by the recent advent of what was at first called the European Energy Charter. The "European" was quietly dropped from its name after it became clear that the charter was global in scope and membership. Although its main target is the vast and newly privatising energy industries of Central and Eastern Europe, it in fact implies the "liberalisation" of energy extraction, generation and distribution worldwide. Signatory states are forbidden to favour their own energy companies and to discriminate against foreign companies (in practice, usually the big energy multinationals). This at a time when sectors such as electricity, until recently a national-based industry par excellence, are being privatised and globalised. As a result of Britain's controversial electricity privatisation, for example, the planet now has a major power multinational called National Power. In today's world, beware of names!

But the real problem with the Energy Charter treaty is that it completely ignores the social dimension. In some Central and Eastern European countries, electric power workers are being paid 3-4 months late, but do not have the right to strike. Miners in some parts of this region are owed up to six months' pay. Many of its power plants and mines are very dangerous for their workers and highly polluting for the environment. Is this the level playing field that we keep hearing about? Is this what is meant by "global competition"?

The ICEM has therefore been campaigning hard for a social protocol that would oblige signatory countries to the charter to ratify and apply the cornerstone Conventions of the UN's International Labour Organisation (ILO) on freedom of association, collective bargaining, health and safety and other labour rights. We need to balance the enthusiasm for profit with an equal enthusiasm for employment and social benefits. Social clauses in international trade agreements are one means to that end. 

But at the same time, we should remember that trade unions have never been able to rely on government, national or international, to do their job for them. Our strength lies elsewhere - in our tried and tested mechanisms of worker solidarity.

So if companies and governments have abandoned even the pretence of economic nationalism, why are unions so often the world's last surviving champions of a perceived national interest? Surely, the only national issue for workers is whether home-grown employers are any more understanding, controllable or patriotic than foreign employers, or whether they are simply laughing all the way to their offshore, tax-haven banks.

Certainly, if workers in one part of the world accept political and business challenges to engage in a head-to-head "competition" with their colleagues elsewhere, we are all on the road to ruin. If we accept the dominance of direct labour-cost competitivity, then workers in the industrialised triad of Japan-Europe-North America are ultimately in competition with workers earning less than a dollar a day in Indonesia, with the child labourers of India, Africa and Latin America and with the slaves of Burma.

China, meanwhile, is rapidly overtaking the USA as the foreign capitalists' favourite destination. A new consumer market of middle-class Chinese is appearing - a new "red bourgeoisie" - backed by a docile labour force of more than a billion workers and peasants. And in 1997, this totalitarian society will acquire one of the world's most sophisticated capital markets in Hong Kong. 

Western chemical companies have not been slow to gain a toehold in China, this last and greatest market. The German-based multinational BASF was one of the first foreign investors in the Chinese chemical sector in the early 1980s, and is still one of the biggest there. Interestingly, it was BASF's boss J³rgen Str³be who advised German chemical workers in 1993 that "wages have to orientate themselves towards productivity and international competition."

By 1996, the less enlightened sections of German business - and of German government - were calling into question the social aspects of the "social market economy" on which Germany's post-war prosperity and democracy were built. As the main German business daily, the Handelsblatt, rightly pointed out, nation states will "soon have to ponder again on a coherent strategy for the international defence of national values, such as the constitutionally prescribed social market economy. In the age of globalisation, the lines of defence for such values lie far beyond national frontiers."

In China, for example, where millions of impoverished peasants are pouring into the factories of the South? Where even on official figures more than 60,000 people a year die in workplace accidents? Where it is a "crime" to advocate independent trade unions? 

Is this the destiny of labour in a "competitive" global economy?

Yet, in a world where 85 percent of global wealth is consumed by 20 percent of the population - while the bottom 20 percent barely exist on just 1.5 percent of total world income - there is a clear case for expanding economic activity in the underdeveloped countries. Labour solidarity must embrace jobs for the world's poorest if it is to mean anything other than defence of an unjust status quo.

The desperate truth is that the acceptance of a concept of "competition" between nations, based on labour costs, is leading to the pauperisation of the mass of the world's population and the enrichment of the very few.

What is presented as a crisis of over-production is, in fact, a crisis of distribution. And just distribution is the appropriate field of trade union competence and action.

Despite the rapid rise in international investment mentioned at the outset, still 85 percent of such investment is between the developed US-European-Japanese triad nations. The fabled growth of the newly industrialising countries (NICs) and the hopes of the poor remainder are confined to the remaining 15 percent.

Still the poor South owes the rich North over $1,700 billion in debt. This costs the South a net $120 billion every year in servicing charges.

Still, in 1995, a German industrial worker who was lucky enough to remain in a job could expect an average wage of $31.88 an hour, while an Indian industrial worker needed to be even luckier to find employment and could expect to earn 25 cents an hour.

It is also a salutary lesson in development economics to recall that ten years back, in 1985, the German industrial wage averaged $9.60, while in India it averaged 35 cents!

These are injustices which the fire of "free market competition" has done nothing to eradicate. Instead, it has worsened the global inequalities.

At the same time, the necessary changes in the productive fabric of the old market economies can only be brought about if workers and their families can be assured of social security through the maintenance of pensions, health provision and incomes. Insecurity is the bitterest enemy of change.

If the political environment were once again focussed on the welfare of its citizens, much more could be achieved. Efficiency is not best obtained by "making the human assets sweat" more. The engine of industrial growth has been driven throughout most of the past 200 years by technological advance - the application of capital to provide new solutions to production.

In the chemical industry, for example, the shift of basic commodity chemicals production outside of Europe - notably to Asia - has been compensated in financial terms by an increase in the development and production of specialised and higher value-added products - advanced engineering thermoplastics, coatings and pharmaceuticals, for example. The rise of biotechnologies has brought both new kinds of product and new pathways to existing ones.

The problem for Europe's workers, however, is that these new areas of production are not adequate to make up for the huge job losses from closure of the old mass production facilities. Higher value-added means, by definition, less labour per production unit. What is required is a new look at human need in the broader sense and a breakthrough to new kinds of production in the old markets. 


If we accept that real economic change is brought about not by governments nor by obscure "market forces" but by very tangible and globally operating companies, then we stand challenged to devise a determined and properly resourced strategy to deal with these prevailing economic institutions on their own ground.

The leading companies have escaped from the social consensus that supported certain shared ideas of "social partnership" in advanced industrial cultures. National or regional production bases are now seen as available resources among many others, and not as a commitment. Above all, there is no longer a commitment to create local jobs and a balanced local economy. The jobs carnage continues throughout the old producer countries, yet industry profits are booming. The Economist - a journal not renowned for radical criticism of big business - called this contrast "profits without honour."

Real social partnership to create a lasting recovery, based upon deep innovation and a retrained workforce, will come about only through the respect born of negotiating power. To regain that power at the new regional level, we will need to respond to corporate power which is a continuum right up to the world headquarters. To my mind, an effective European trade union response, for example, will come as part of an integrated global strategy for labour. At the moment, labour still has the pygmy perspective of nationalism, though in Europe at least we are trying to rise sufficiently to reach the regional bargaining table. But there we face the giant's glare of the multinationals, gazing down from their Global Olympus on this sideshow to their broader plans.

The ICEM is trying to spearhead the creation of really global networks between workers organised within the far-flung subsidiaries of individual multinational companies.

It is a hard and painstaking task. Each union which has members in a subsidiary of the target company is asked to nominate one local correspondent. His or her task is to report any changes in the collective agreement, in production, in working methods or in shift systems, for example, to the network desk at ICEM headquarters. There, this information is sifted, consolidated, analysed and re-presented as a global picture of the company strategy to each point on the network. Over time, a database of this collective bargaining information is being constructed. This will enable rapid assessments to be made and will support moves towards an upward harmonisation of important contract clauses and common contract renewal dates. In this way, we can increase our combined clout.

Individual companies will be carefully studied to see those elements which are common to all their operations. These may be common technologies, work systems or health and environment issues, for example. The multinational network will then press for an integrated approach to these issues by management, to introduce the best practice in all its plants.

Though this work is only at the beginning, there are already examples where companies have demonstrated their readiness to sit down at the international level and to discuss such issues as health and safety. 

Also, for instance, the network of unions in the Bridgestone/Firestone tyre multinational played an effective role in maintaining pressure on the company worldwide in support of sacked American trade unionists. The courage of the US workers, combined with the pressure from the network, was ultimately successful in achieving reinstatement and a good union contract in the US plants.

Many issues, of course, will not be appropriate for international discussion for a long time - if ever. I doubt that wage negotiations, for example, will move beyond the national context for many years. Long-term planning agreements with individual companies on investment, manpower and retraining might well feature at the regional level, however, as a result of the impact of good examples of the European Works Councils. But trade unions will be at a disadvantage at all levels of discussion and negotiation as long as the organising continuum from local, through regional, to global level remains incomplete and therefore does not correspond to the economic and social reality of the leading companies in each sector.

If our interventions in the process of change are to be effective, however, trade unions themselves must first become the champions of change. We must recognise that the survival and security of trade union members, of our societies and of our own organisations lie only in embracing root and branch reform. We need to become a respected source of new ideas, not the neglected guardians of a glorious past. We need to develop our own radical and long-sighted strategies for new industrial directions that contain within them the hope of labour's emancipation.

Of course, there will be important choices to be made on the way to new socio-economic development. Does it make sense, for example, to spend tens of millions on developing nuclear power plants that will employ a few hundred people, when similar amounts invested in photovoltaic cell development would provide us with distributed energy generators on a household basis, creating thousands more jobs, bringing less harm to the environment and establishing a decentralised power network freed from the domination of the multinational corporations?

We have to recognise that change strategies will mean redistribution of employment and will require unprecedented programmes of retraining and continuing education. We have to be there at the institutional level and at the corporate level to negotiate these changes for our members. But we also have to promote change, so that we can be taken seriously when we also promote the support measures and social safety nets that must accompany it.


At the national level, the trend to redefine old industrial and trade groupings is already well advanced in the wave of merger activity between unions. Just as our employers can no longer be easily classified within a single sector, so it makes no sense for trade unions to act as though industrial development had ceased at the end of the last century. General industrial unions are now emerging in many countries. In Australia, the USA, Britain, Spain, Scandinavia and elsewhere, former trade-based or sectoral unions are grouping together in a new pattern of industrial solidarity. In part, of course, these moves are prompted by the membership and financial crisis. Whatever the immediate motive, however, it is a move long overdue.

These new trade union structures have to be integrated from the local, through the regional to the global level. 

One important step in this process was the founding of the International Federation of Chemical, Energy, Mine and General Workers' Unions (ICEM) in 1995, through a merger between the chemical, energy and allied workers' international, the ICEF, and the miners' MIF. This is one of several amalgamations among the sector-by-sector International Trade Secretariats (ITS). Another recent example is the merger between the internationals of the food and allied workers and of the agricultural workers to form the present IUF. Media and entertainment workers' internationals have also recently established a grouping (confusingly entitled ICEME!). 

I personally hope this process of amalgamation will continue until we end up with the necessary four or five internationals that will give us the depth and resources necessary to do the big, vital job that confronts us all.

That task is to defend and improve workers' pay and conditions right around the world. The means to that end is organising. In terms of membership, we have to regain lost ground and reach out to new constituencies. Where unions are weak or non-existent, we have to embark on ambitious programmes of union-building. Where older-established trade union movements have been on the wane, they must be revived. Fortunately, there are now many signs at the national and international levels of a new emphasis on organising and a new concentration on our core tasks.

Internationally, this implies first and foremost establishing direct dialogue between multinational companies and the relevant International Trade Secretariats. Since the power increasingly rests with the companies, rather than the governments, it is primarily with the companies that the trade unions have to establish a negotiating relationship. An example of what can be achieved is the pioneering agreement signed in 1994 between our colleagues in the IUF and the French-based food multinational Danone. This commits both parties to monitor the observance, in all Danone subsidiaries worldwide, of the trade union rights specified by the ILO. These include the rights to organise and to bargain collectively. We need many more such agreements, and the means to monitor their enforcement. We are working to achieve such accords in the ICEM's sectors.

That said, the world trade union movement obviously still needs to dialogue with government, globally as well as nationally. Despite a weakening of national political power, there is yet hope that a new political agenda will enforce itself at an international level. The fading of the old Cold War trade union rivalries leaves the International Confederation of Free Trade Unions (ICFTU) well-placed to provide a progressive, identifiable trade union voice within the inter-governmental agencies, old and new, that preside over the New World Disorder. The ICFTU must be combative and focussed in its approach. Freed from the vision of "combating communism", it can now engage the real adversary - irresponsible capital.

It must become a fighting champion for workers and their families, rather than a sparring partner for institutional bureaucrats.

The welcome signs of renewed emphasis on core trade union values lead towards a firmer relationship between labour's international industrial wing and its political wing. In many countries, a similar redefinition of structures between the national centre and the branch unions is taking place. The debate has been engaged at the international level and a bid is being made to renew and to empower the international organs of trade union response.


It was the great economic and social upheavals caused by the expanding industrial revolution that gave birth to the labour movement of which we are the proud inheritors. Born out of change, our trade union forebears also demanded change. They understood and welcomed the onward sweep of industrial progress for the benefits it might bring; but they also understood that it was necessary to build their own means to ensure that these benefits would be shared among the many rather than hoarded by the few.

But are we worthy of those origins? Do we still observe the changing trends of industrial advance with the same clarity of vision? Are we also prepared to change the nature of our social institutions to meet the new challenges that development has brought to confront working people?

Or have we grown too comfortable in the trade union clothes our fathers and mothers wove? Is our vision dimmed by fear of what sacrifices change might bring with it? Do we resist the very force of change in our own organisations and policies?

To confront these questions and to come up with honest and adequate answers is the greatest challenge facing today's labour movement. If we fail to meet it, we fail not only our past proud history, but we fail those who come after us, because we risk losing the one remaining chance to give them control over their own working lives.

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