09 September 2021
The trade union movement has long been raising concerns about globalisation being imbalanced, favouring trade and capital liberalisation without considering broader economic and social aspects than just GDP growth.
The COVID-19 crisis put the role and impact of trade and investment under the policy lens again. The reason is twofold: first, supply chain disruptions exposed the fragility, rather than the efficiency of a highly inter-connected global system, in which partial shutdowns of production and the concentration of suppliers in specific segments and regions produced serious global supply failures. To this date, logjams in the global shipping industry continue to pose considerable risks to global industries relying on finished and semi-finished components from China. Second, the enormous social toll paid by workers worldwide, in terms of lost jobs and precarious employment, brought to the forefront job precariousness and poor job quality both in OECD and non-OECD countries, where trade policy has a significant role in shaping the nature and location of jobs worldwide.
Already before the COVID-19 crisis erupted, an emerging trend of international distrust in multilateralism and open markets was noticeable, with new frictions between major global players. While such stances were dictated by potential short-term political gains, an underlying malaise is palpable. Among the reasons, the role of the unequal re-distribution of globalisation has to be recognised. Trade and investment liberalisation has in many instances delivered the opposite from the promise of higher growth and more secure jobs: market power concentration, supplier dependency and bottlenecks, but also abrupt reallocation of production capacity, geographic concentration of gains and losses, fierce competition on labour costs have put the working people across OECD countries under increasing pressure.
The answer to this cannot simply boil down to lowering further barriers to trade, investment, claiming that market forces and competition alone will distribute welfare in the most efficient way. The fundamental question is how trade and investment agreements can mitigate the risks and enhance the opportunities of free trade for the people, both from the perspective of consumers and workers.
Since the onset of the crisis, the OECD has been openly re-discussing its trade and investment policy framework. To help inform that process within an OECD-setting, the TUAC produced a note that maps out the main trade union issues around sustainable and inclusive trade and investment policies.
This topic will be at the centre of the TUAC ad hoc Virtual Meeting on Trade and Investment Policy – “Towards Global Coherence and Domestic Resilience” – on 29 September 2021. More information and the registration link at the event page.