From: Jason Mark (jason@globalexchange.org)
Date: Thu Jun 20 2002 - 18:51:42 EDT
Dear Friends:
In this dispatch you will find:
1) Article from The Washington Post, "There's Only So Much Foreign Trade Can
Do." As the writer demonstrates, trade liberalization hasn't led to a wage
increase in one of the key Third World export sectors‹apparel. On the
contrary, there has been a wage meltdown. This fact punctures one of the
most resilient myths of the "free trade" scheme: that more trade will
naturally lead to more opportunity.
2) Job Posting from Global Exchange: Fair Trade Organizer
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1) THERE'S ONLY SO MUCH FOREIGN TRADE CAN DO
By Alan Tonelson
Sunday, June 2, 2002; Page B01
America's leaders view trade as a key instrument in the global war on
terrorism. By opening U.S. markets wider to Third World products, they hope
to alleviate poverty abroad and thus turn destitute people away from
terrorism and violence.
Trade policy as anti-terror weapon is an understandably appealing idea. It
doesn't put American soldiers in harm's way. It is nonviolent,
market-friendly and holds the promise of "draining the swamp" where
terrorists are assumed to thrive. And it doesn't require a line in the
federal budget.
If only it worked.
Contrary to the view of globalization supporters and even some critics,
trade with the United States does not automatically provide Third World
workers with the keys to wealth and happiness. In a recent survey, the
Reston-based consulting firm Werner International Inc. has compiled nearly a
decade's worth of hard data on actual wages paid to workers in an industry
that is seen as crucial to Third World hopes for industrialization --
apparel. Perhaps no other industry has profited more from exporting to the
United States. And yet the figures show that there has been almost
uniformwage meltdown in the apparel industry in the Third World.
Take Pakistan, a front-line combatant in the anti-terror campaign that has
complained bitterly about supposedly miserly U.S. trade breaks. Yet from
1990 to 2001, Pakistan's annual apparel exports to the United States rose
nearly 400 percent, to more than $1.5 billion. Nonetheless, between 1990 and
1998, the period covered by the Werner study, nominal wages for Pakistani
apparel workers stayed absolutely flat, at 24 cents per hour. Because
inflation in Pakistan totaled 137 percent from 1990 to 1998, the wages of
apparel workers fell way behind the cost of living.
NATO member Turkey is clamoring for trade breaks, too, as a reward for
buttressing U.S. strategy in the Middle East and Central Asia.Turkey is
already a significant apparel exporter to the United States, with shipments
rising 168 percent between 1990 and 1998, and growing even faster through
2001. Yet from 1990 to '98, while Turkish apparel wages increased by 36.3
percent, the country was gripped by near-hyperinflation that saw living
costs soar by more than 1,800 percent. A similar pattern holds in countries
such as the Philippines, Egypt and Peru. Wage trends for apparel workers are
grim, even allowing for the dollar's appreciation against many local
currencies in the developing world.
In some countries, the pattern extends far beyond the apparel industry.A
1999 report from the Harvard Institute of International Development and the
World Economic Forum revealed falling real wages, in local currency, across
all sectors of the economy in China, Indonesia and the Philippines between
1990 and 1997. This backsliding occurred well before the region's financial
collapse.
All of this contradicts the prevailing theory of the moment. "America's
trade leadership" can help provide answers for Third World allies "who ask
for economic hope to counter internal threats to our common values," U.S.
Trade Representative Robert Zoellickwrote a week after Sept. 11. The virtues
of trade for developing countries have also been endorsed by the World Trade
Organization, the World Bank, Oxfam International and a U.N. anti-poverty
summit.
But in the real world, the answers are anything but clear-cut. In theory,
the solution to developing countries' problems might be to send yet more
apparel to the United States. But the experience, whether from Pakistan,
from Turkey or from Mexico, is not encouraging. Mexico is rapidly becoming
America's largest source of apparel imports -- $9 billion worth in 2001. Yet
Mexican apparel wages have risen less than one-seventh as fast as that
nation's living costs.
Critics of today's trade policies and even supporters who acknowledge the
wage problem offer several plausible explanations, ranging from low
productivity rates in developing countries to a lack of worker rights. Yet
the reasons are more fundamental.
First, greater trade cannot be even a near-panacea for global poverty
because this condition has many other roots. None is more central than bad
and often crooked governance, which prevents scores of developing countries
from organizing themselveswell enough to exploit trade opportunities when
they are offered.
Second, the developing world literally is drowning in labor. The economic
liberalization wave that swept major Third World countries, starting with
China's reform program in the late 1970s, has made an unprecedented number
of workers available to international businesses. In particular, the Asian
and Latin American regions that have opened economically feature not only
huge, rapidly growing populations and workforces, but towering rates of
unemployment -- an estimated 20 percent in China alone. Sub-Saharan Africa
and low-wage East European countries such as Ukraine are waiting in the
wings.
This worldwide labor glut depresses the value of workers the way the
oversupply of any product depresses the price of that product. These
pressures are especially powerful in labor-intensive industries such as
apparel, where international corporations seldom own factories and instead
often shop from country to country for the lowest wages.
Third, the developing world's massive though still incomplete economic
opening has greatly multiplied the number of countries pursuing export-led
growth strategies. During the Cold War, U.S. trade breaks helped South Korea
and Taiwan partly because those nations had the market for Third World
manufacturing exports pretty much to themselves (and partly because they had
strong central governments that instituted sound domestic policies).
Today, such smallish Asian export tigers are competing for shares of the
U.S. apparel markets with neighboring population giants such as China, India
and Indonesia, along with Mexico, the Caribbean Basin, Central America and
sub-Saharan Africa. These countries continuously undercut each other; thus,
most new U.S. trade agreements with Third World regions produce complaints
from other regions.
In part, that's because the U.S. market is already well-saturated with
imports. Imports currently make up at least 75 percent of the U.S. apparel
market, 95 percent of the footwear market, and 95 percent of the market for
computers, other office machines and their parts. Even those unworried about
record and mounting U.S. trade deficits have to ask themselves: How much
more export growth can take place in these areas?
In 1999, despite the surge of exports to the United States, 1.3 billion
people still lived below the meager global poverty line of $1 per day in
income, and nearly 2 billion others made less than $2 per day. Joblessness
was still endemic throughout the developing world.
Despite the fact that increased trade hasn't yet improved the plight of
Third World workers, many remain enamored of trade as an anti-terror weapon.
They might do better to turn their attention from the United States to press
Europeans and the Japanese to start importing much more from developing
countries. Although the globe's lone economic superpower will always be a
lightning rod for economic grievances, the other industrialized countries
have clearly erected the biggest trade barriers to Third World economic
progress.
According to the Organization for Economic Cooperation and Development, the
club of industrialized democracies, although the U.S. economy is twice as
big as Japan's, it imports four times more in non-oil goods from 17 major
Third World countries than does Japan. In addition, although the U.S.
economy is 50 percent larger than the output of the European Union's four
biggest countries (Germany, France, Italy, and the United Kingdom), it
imports twice as many goods as they do from those 17 countries.
A 2001 International Monetary Fund (IMF) study concluded that stronger
growth in the United States is not the major reason for the disparity. The
IMF found that U.S. markets are so open to Third World imports that every 1
percent of American economic growth is associated with a 1 percent increase
in Third World growth. By contrast, European and Japanese markets are so
closed that even when they do grow, this growth has no "statistically
significant effect" on Third World growth.
Unfortunately, the Europeans and Japanese have shown little interest in
lowering their barriers. Indeed, Washington may be worsening matters by
hinting that Japan should let the yen slide and try to export its way out of
recession. The result can only make Japan even more closed to Third World
goods.
Absent more burden-sharing, the United States simply will need to bring some
order and strategy to its Third World trade policy by setting priorities. If
President Bush wants to reward allies or lure fence-sitters in the
anti-terror campaign, the kind of practically indiscriminate market-opening
he has favored thus far cannot continue.
Further, the president's anti-terrorism priorities must be reconciled with
other foreign policy considerations that have partly driven recent U.S.
trade policy, such as stemming the flow of drugs and immigrants from Mexico
and other hemispheric neighbors, engaging with China and meeting what the
White House sees as humanitarian obligations toward sub-Saharan Africa. If
every one of these aims is a priority, then none is a priority. Finally, the
president will need to preserve his international legal authority to set
priorities in Third World apparel trade, which will mean confronting an
international agreement to eliminate apparel trade quotas by the year 2005.
If the president fails, much world apparel production is expected to shift
to China.
Above all, the administration must recognize that, for the foreseeable
future, American security cannot responsibly be pinned on seeking millennial
change in the developing world. Trade is not the only economic weapon.
Investment and aid can also help. But even if industrialized nations are
more generous, enormous numbers of people around the world will remain mired
in desperate poverty for decades to come. The swamp that allegedly breeds
and harbors terrorism, in other words, will be drained agonizingly slowly at
best.
Alan Tonelson, a research fellow at the U.S. Business and Industry Council
Educational Foundation, is the author of "The Race to the Bottom" (Westview
Press). Kirk Raymond, a foundation research associate, assisted in preparing
this article.
© 2002 The Washington Post Company
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2) JOB ANNOUNCEMENT: Fair Trade Organizer
Global Exchange is a San Francisco based human rights organization working
for economic and social justice and democracy. GX programs include Reality
Tours to developing countries, retail stores that promote Fair Trade, public
education resources, speaking tours, and promoting sustainable development
in Cuba. Our campaigns for democracy, labor, and human rights focus on
Mexico, Palestine, Colombia, and Brazil. We also organize for a democratic
global economy against the IMF/World Bank/WTO/NAFTA, against human rights
abuses of US corporations, and to promote a Fair Trade alternative.
Our Fair Trade program is looking for an organizer to help build a
nationwide grassroots movement for Fair Trade coffee and chocolate, focusing
on national outreach to students, unions, and religious groups. Fair Trade
means a living wage, education, health care and community development for
500,000 farmers organized into 300 cooperatives in 20 countries around the
world.
… Organize: work with the Fair Trade Director and Coordinator to organize
corporate campaign activities against Folgers and M&M/Mars, including
grassroots mobilizations, action alerts, pressure tactics, organizing
demonstrations and shareholder activism
… Strategize: analyze points of leverage and opportunities for building a
nationwide Fair Trade movement
… Mobilize: help build and maintain contact with a diverse movement of
student groups advocating for Fair Trade locally and nationally
… Outreach: contact unions, religious communities, student groups, and other
groups to build and support a network of communities for Fair Trade
… Educate: make public speaking appearances at schools, community centers,
and conferences about Fair Trade
… Travel: organize and travel to campuses across the US on speaking tours
… Train: develop interns, volunteers, and other support staff to maximize
volunteer participation and input
Qualifications:
… Commitment to the goals of Global Exchange and Fair Trade
… At least five years grassroots organizing experience
… Knowledge of contemporary debates around agriculture and free trade
… Strong communication skills, both verbal and written
… Strong Mac computer skills (word, database, email)
… Enthusiasm, creativity, and strong networking skills
… Initiative; ability to work independently as well as in a team
… Ability to work in a fast-paced multi-task environment
… Ability to work with diverse communities
… Spanish language skills are a plus
This is a fulltime contract position through the end of the year, with a
probable extension. Compensation DOE. Global Exchange is an affirmative
action employer and strongly encourages people of color to apply. Send
résumé, cover letter, two references, and a writing sample to Fair Trade
Director, Global Exchange, 2017 Mission Street, Suite 303, San Francisco, CA
94110. Deadline July 10th, 2002.
____________________________________________________________________
Global Exchange http://www.globalexchange.org
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