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Alan Larson, Under Secretary of State for Economic, Business, and Agricultural Affairs Remarks, Rotary Club Washington, DC, January 5, 2000 |
Making Globalization Work for Workers, Both Here and Abroad Introduction Mr. Hamod, members of the Rotary Club of Washington, DC and esteemed guests: thank you for inviting me to discuss America's opportunities and responsibilities in the global economy. It's a privilege to meet with a Rotary Club that has such a strong record of service to the community, both here in the District and also in the wider world. You have supported projects from Kenya to Thailand, from Turkey to Gaza, and from Panama to here in the District. Through the Polio Plus program you have been part of a campaign to vaccinate more than half a billion children around the world. You also have supported hospitals, educational programs and micro-enterprise development. I highlight these good works not just to flatter my hosts, but because they tie in with a broader point I want to stress today. Expanding Freedom It is in our country's interest, I am convinced, that the global economy should expand through increased trade and a broader and freer flow of capital. At the same time, to be durable, the global economy must be built on a solid ethical and political foundation. The global economy must be supported by a global sense of community, and animated by an appreciation of the common humanity that people throughout the world share. It also must be reinforced by a set of institutions and rules that help ensure that all people, within this country and across countries, can find within the global economy opportunities to expand our freedom and to realize the full potential God has given us. And when I speak of freedom, I have in mind the Four Freedoms that former President Franklin Roosevelt stressed -- freedom of expression, freedom of worship, freedom from fear, and freedom from want. We face tough challenges as we attempt to pursue these objectives at the beginning of a new millennium because the freedoms that enable people to achieve their potential are spread rather unevenly around the world. New Permutations on an Old Adage Many of us have found wisdom in the old adage, "Give a man a fish and he is fed for a day. Teach him to fish and he is fed for a lifetime." Today the adage needs to be updated in several ways. First, it is not just being politically correct to suggest that the adage should talk about both men and women. In fact, one of the most important lessons of development economics is the importance of ensuring that women as well as men enjoy full economic opportunities. More profoundly, to move beyond a subsistence lifestyle, men and women in developing countries need to be able to sell their products in the global economy and to buy other products that help them achieve the quality of life they value. Here's where the issues start getting complicated. First, there is the simple question of protectionism. What if I am a fisherman in a developed country and fear that my wages will fall, or I will lose my job, if I face competition from this fisherwoman from a developing country? Because of her poverty, she may be willing to work longer hours or for lower wages. Is that unfair? Most of us would say that we should not refuse to buy the woman's fish simply because she is poorer and will work for less. The example is not a trivial one, however. At the recent trade negotiations in Seattle, some countries refused to support a tariff reduction proposal called Accelerated Tariff Liberalization, in part because they wished to protect their fishermen from competition from developing countries. The pressure for protection is even stronger from European and Japanese farmers. One of the biggest problems in launching a New Round of trade talks will be to convince farmers in developed countries that it is inappropriate to use trade barriers or trade-distorting subsidies to protect their incomes and lifestyles at the expense of poor farmers in developing countries. And lest we in the United States feel too self-righteous, we must acknowledge that lower trade barriers on imported clothing would be of great interest to poor workers in many developing countries even as we recognize that surging clothing imports would have an adverse impact on American apparel workers, many of whom have few economic options outside the apparel industry. So in our trade policies developed countries need to focus on appropriate transition mechanisms and find new and better ways to equip our own citizens with the skills that allow them to compete effectively in the global economy. We must face up to the fact that this can be a particular challenge for disadvantaged workers, for workers with lower educational skills and for workers whose work skills are very industry-specific and not easily transferable to new jobs. Suppose, however, that we solve this challenge and accept without trade barriers the fish produced by our developing country fisherwoman. There still may be problems of over-fishing. If the number of fish caught each year must be regulated, to protect fish stocks, should be done on the basis of historical production, which might favor us, or on some other basis. And who sets and enforces those rules. Still other problems arise. What if we are concerned that the woman's fishing technique results in the inadvertent taking of a significant number of sea turtles? Does our concern about the environment give us the right to refuse to buy from her, despite her poverty, unless she changes her fishing methods? For what it's worth, existing U.S. law says we do have that right and a dispute settlement panel of the World Trade Organization agrees, provided we do so in an appropriate way. Now, let's assume that the woman fishes with turtle excluder devices that prevent turtles from being taken inadvertently. Should we buy fish from her even if others in her country continue to fish in the old way and her government does not require the use of excluder devices? Over the holidays I made a formal determination to continue the existing American policy under which we do allow the importation of shrimp harvested from ships using turtle excluder devices, even from nations that do not require all their shrimp trawlers to use such devices. And if these questions aren't hard enough, let's talk for a moment about labor practices. U.S. law would authorize us to ban importation of the woman's fish if she was using slave or forced labor. I'm sure that we all would agree that our common stake in ending slave or forced labor would fully justify this use of trade leverage, and I am confident that such action would be unassailable in the WTO. Suppose, however, that the woman employs child laborers. Most of us would be concerned about buying products produced by workers who are underage, particularly if there is an exploitative element in their employment. At this time, WTO rules do not explicitly authorize a country to prohibit importation of products produced by exploitative child labor. Some might ask what would happen to such desperately poor children if they were not working. In practice, we have had encouraging success in devising pilot programs that take children out of factories and put them into schools. In some cases, the jobs they left behind have been filled by mothers, many of whom had not previously been in the job market. One such program targeting the garment sector in Bangladesh actually boosted the country's exports, as countries concerned about child labor became willing to import when the children were in school and not in the factory. The Bangladeshi success has encouraged certain industries in Pakistan to follow suit. We need to build on these positive examples. Even more complicated issues arise when we consider the question of human rights. Democracy and respect for human rights are not luxuries that poor countries cannot afford. Rather, they are rights to which all humans aspire, and there can be no true development, for our fisherwoman or anyone else, without them. Moreover, democracy and respect for human rights contribute in a variety of ways to the effective functioning of the economy. They help rein in economically destructive corruption or abuse of power, for example, the allocation of fishing licenses only to friends of the President. They provide a rational basis for making decisions about the amount and types of public goods like education and public safety that will be provided. Without such goods, the economy cannot effectively function. That is why the United States is devoting a growing share of our assistance resources to the strengthening of the rule of law and why we will continue to speak out about human rights abuses. Taking Stock Let's try to take stock of progress in the global economy. The past 50 years have been a time of unprecedented economic growth and prosperity in the United States. Our incomes have grown by about 60 percent in real terms. Measured in terms of their purchasing power, our incomes are now 27 percent higher than our counterparts in Japan and 41 percent higher than in Germany. Unemployment is low and the stock market has quadrupled in value during the last 10 years. Trade has helped fuel this boom. The share of trade in our national economy has doubled in less than a generation. We are the world's largest exporter and exports have produced good jobs; in fact, on average, export industries pay wages some 15 percent higher than other sectors of our economy. The basic components of the American model of market competition are being embraced in countries throughout the world. This is one of the reasons why prospects for global growth have never been brighter. Developing countries are, to a substantial degree, beginning to share in this expansion of global opportunity. The countries of East Asia, for example, grew at a rate of over 8 percent during the 1980s and 1990s. Far too many people in the world still live in extreme poverty, but the percent who get by on less than $1 per day has fallen from about 25 percent in 1987 to about 21 percent a decade later. Other, less strictly economic, indicators are also up. Life expectancy has increased from 59 years in 1970 to 67 years in 1997. While life expectancy remains too low in the very poorest countries, even there it has increased from 43 years to 52 years during the same period. Current Policy Initiatives While conditions in many developing countries have improved, they are hardly at a level that is acceptable. We need to do more to help individuals in the poorest developing countries have meaningful opportunities to participate in the global economy. That is why the Administration is working hard to secure Congressional approval this year of the African Growth and Opportunity Act and the Caribbean Basin Enhancement Act. Each of these bills would provide important opportunities for poor people in poor countries. In helping them expand their economies, we help them become stronger economic partners and ultimately better customers. We have agreed to forgive virtually all of the debts of the poorest countries so long as they are committed to policies that will alleviate poverty and provide a solid foundation for sustained economic growth. We are helping to fund education programs around the world. We have supported a large increase in education and social programs by the multilateral development banks. We have launched an initiative to extend Internet infrastructure to over 20 African countries. To do everything we need to do to foster peace, democracy and development, the United States needs to devote the resources necessary to do the job. Unfortunately, our resource commitment in these areas has declined over the years. At present, less than 1 percent of the federal budget is devoted to these programs. We must do better. We also need to broaden the trading system to include all countries willing and able to uphold its rules. The Congress will have an opportunity soon to make a particularly important decision to grant China permanent normal trading rights in connection with its entry into the a World Trade Organization. This decision is not about endorsement of the Government of China's human rights policies, it's about bringing the 1.2 billion people of China into a rules-based system of trade. Conclusion After Seattle, some observers have drawn the conclusion that there is an unavoidable collision in the trading system between the interests of developing countries and the interest of those countries, my own included, that seek to introduce consideration of labor and social issues into the WTO. I respectfully disagree. What both sides of this debate want is a trading system that is inclusive and gives everyone the chance to share in the expansion of freedom that the global economy makes possible. There can be no development worthy of the name that does not involve and expansion of workers' freedom to associate and bargain and a strengthening of their protection from gender discrimination, exploitative child labor and forced labor. And there can be no social or labor agenda worthy of respect that does not embrace the importance of lifting the lives of the poorest people in developing countries, people whose opportunities are so circumscribed compared to our own. It will be hard to make globalization work for workers, both here and in developing countries, but we can and we must. To start, we in developed countries must make clear, in what we say and do, that our interest in the social dimension of trade is part of a commitment to lift developing countries up, not hold them down. [end of document]
All Remarks | Economic and Trade Policy | Department of State |
