Over the last decade the issue of globalisation has become a hot topic among trade unions, political and community organisations in Australia and amongst our international union affiliations argues ACTU Assistant Secretary Bill Mansfield.

Globalisation and Australian Trade Unions

Over the last decade the issue of globalisation has become a hot topic among trade unions, political and community organisations in Australia and amongst our international union affiliations.


Basically globalisation is the phenomena whereby the ability of national governments and national institutions to control the economic and social development in their countries is being over-ridden by international forces and where national boundaries are becoming less relevant.


The factors which have accelerated the process of globalisation include :



  • deregulation of financial markets to float currencies and allow the rapid transfer of funds between countries




  • trade liberalisation involving opening up of domestic markets for both manufacturing and services to both foreign investment and imports




  • technological change, particularly in communications and computing, which allows the provision of services from outside Australia and assists in the transfer of information and work between countries



The adoption of a creed of “smaller government” whereby publicly provided community services are progressively being reduced in favour of privatisation and lower taxation

Pressure for a new round of international agreements on the service sector, known as GATS, to open up the sector (education, health, media, etc.) to private international ownership and trade

Labour market deregulation to promote “flexibility” which is manifested by opposition to collective bargaining, promotion of individual agreements, casualisation, extended working hours, increased stress levels for workers and a widening of the gap between rich and poor


These factors which are international in scope are driving changes in employment, investment and government policies throughout the world.


The fundamental question which is yet to be answered in terms of how the process of globalisation will affect workers in Australia is whether it lead to a “race to the bottom” or to some more positive outcome.


The answer to that question will not come from a reliance on market forces. To achieve a more positive outcome we need to have our voices heard both in Australia and in the international institutions which are part of the process of globalisation.


A basic need in Australia is to ensure that the voices of working people are able to be expressed through a representative, effective and progressive union movement. However workers in a number of countries are not well organised :


Less developed economies less than 10%


USA 12%

France 10%

Japan 20%

Ireland 45%

Scandinavia 70%+


Since 1990 in Australia we have suffered yearly reductions in the number of workers in unions. In 2000 we reversed that trend by growing by 26,000. However our size as a proportion of the workforce has shrunk from 41% in 1990 to around 25% this year.


The reasons for our membership drop are not simple but include factors such as changing management attitudes, Federal IR legislation, workforce structures, downsizing, and privatisation. The approach taken by the ACTU Congress policy is to promote a new emphasis on organising and membership growth. The signs so far are that it is beginning to work.


As unions we also need to work with other supportive groups in the community which have similar objectives to ourselves. These include bodies such as ACOSS, the conservation/environment movement, indigenous representatives and human rights’ bodies such as Amnesty International and ACFOA. Our links with those bodies have not been as strong as they should have been over the last 20 years or so and we need to rebuild them.


In terms of how the process of globalisation is impacting on world wealth distribution, in a recent article in the Economist the issue of Global Inequality was examined by Professor Robert Wade from the London School of Economics. He reported that world inequality is increasing between the rich nations (largely of the north) and the poor nations (largely of the south). Why has global inequality increased? Wade believes it is due to the factors of higher economic growth in developed economies, faster population growth in poorer countries, low growth in the rural sector in poorer countries and the widening gap between the urban rich and the rural poor in countries such as China and India. In addition, the price of industrial higher value added goods from developed economies is rising faster than the prices of goods exported from poorer countries which do little international trade in manufactured goods.


In 1948 28 countries were classified as least developed. Today 48 countries are least developed. The present social indicators are worse than they have ever been before. 1.3 billion people in the world are income poor, 1 billion people do not have safe water and 2.4 billion are without basic sanitation facilities. The HIV/AIDS virus is slashing gains made in life expectancy in developing countries, particularly in Sub-Saharan Africa. Over 12 million people have died of HIV/AIDS in Africa, and it is estimated that by the year 2010, the continent will have over 40 million AIDS orphans.


In terms of opportunities a recent DFAT paper estimated that global gains from halving current trade barriers would be around US $400 billion annually, with developing regions in Asia, Africa, the Middle East and Latin America, potentially gaining the most in proportion to GDP and current economic and social indicators. However when compared to similar promises of growth and wealth made earlier, the outcome suggests a very different story.


There is no question about the wealth that trade liberalisation can create. The question is largely about the cost of wealth creation and about the equitable distribution of wealth. It is quite clear that the current global poverty situation is so complex, that simplistic statements about protectionism or calls for open markets and export-led growth are not adequate to address it. Moreover, each developing country is different in terms of geographical setting, climate, culture, economy, history, political set-up and government policies etc. Lumping developing countries together and assuming that “everything will be fine” if trade is free, is just not realistic. An appropriate policy mix needs to be determined by each country, given its culture, history and priorities.


In June last year, when assessing the outcome of the social and economic developments of the last decade, Juan Somavia, the Director-general of the ILO, said that “the benefits of the global economy have not reached enough people”.


He warned of a “growing gap between discourse and deeds, because those with the power to change policies and achieve action have not done so” in the five years since the first UN World Summit for Social Development, which was held in Copenhagen in 1995.


Somavia argued that “basically, the notions of the Social Summit have permeated policy talk, have had some influence on policy-making and very little effect on policy action”.


Poverty has risen in absolute terms. Central and Eastern Europe continue to suffer; Latin American unemployment is at historical highs; East Asia has undergone great social trauma; and Africa continues to be largely excluded from the benefits of globalisation.” For many people throughout the world there is greater inequality and insecurity.


Somavia said that “the neoliberal economic policies that underlie the present global economy have failed to deliver what people need: a basic sense of security.”


We need decent work for all workers, women and men, formal and informal, wage earners and self-employed. They all need work where basic rights are respected, people are protected and represented and where economic and social efficiency are pursued hand in hand. That’s the real development goal.


To achieve decent work the policies guiding and shaping the global economy must change. New policies must generate productive employment and greater personal opportunity since this is the key to poverty reduction and to economic and social inclusion for the millions who have been bypassed or hurt by globalisation.


The policies must promote greater socio-economic security and improved labour standards since this is what matters most to people. People want dignity in their lives.


Mr. Somavia highlighted the need for “an integrated approach to economic, social and environmental policies”, adding that “we must strengthen the regulatory frameworks at the global level to tame the excesses of the market, to protect the basic rights of people and to realize the right to development.”


In Australia when we grapple with globalisation we have to identify quite clearly what our objectives are. In doing so we also have to understand the needs of workers who are our members and also workers in countries outside Australia.


Our nearest neighbour is Indonesia. A country of over 200 million people, 30 million of whom are unemployed. Workers generally receive less than $100 a month. There is no comprehensive social security. There are six years of free education. Often there is no readily available affordable health care. Child labour is widespread. Unions represent 6% of the workforce. The first democratically elected government (after 30 years of dictatorship) is in serious trouble with the possibility of serious civil disruption during this year. Foreign investment has dried up. Corruption continues to extract billions of dollars each year at all levels of government and business.


There are many things that Indonesia needs but two of them are foreign investment and access to export markets such as Australia. The same point can be made about many developing economies. The question for us as unionists is to what extent should we accept responsibility for creating conditions which allow our Indonesian brothers and sisters to achieve higher living standards so that in 25 to 50 years’ time they could be at the living standards we enjoy in Australia today?


This question is directly relevant to how we in Australia deal with proposals to liberalise world trade. The international union movements’ response to trade liberalisation initiatives (which we also subscribe to) in regard to the WTO and the OECD has been to insist that in any trade liberalisation agreements we must :


Incorporate ILO core labour standards as a minimum for the countries which wish to take advantage of them


Oppose any agreement which seeks to remove the ability of national governments to act to protect national interests


In regard to the Core Labour Standards the ILO has adopted over 180 conventions since its inception in 1919. These conventions set out the standards which the tripartite body believes should be applicable to member States. Of these there is a small number which make up the eight Core Labour Standards. These are :


C 87 – Freedom of Association

C 98 – Collective Bargaining

C 29, 105 – Forced Labour

C 100 – Equal Remuneration

C 111 – Anti Discrimination

C 138, 182 – Child Labour


Australia has adopted all of the core conventions except 138 and 182. 138 has technical problems which prevent ratification and 182 has only recently been carried by the ILO.


It is worthwhile noting that the Howard government has withdrawn from participation in the ILO except for the minimum possible involvement and has not shown any interest in ratifying any additional conventions beyond the 57Australia has already adopted.


The eight ILO core standards do not establish entitlements to remuneration or working conditions – they provide for rights so that workers can operate within a framework which ensures that they can secure a fair share of the wealth they help to produce and be assured that there are civilised values in the marketplace.


Our claim is that the WTO should incorporate guarantees of core labour standards in trade liberalisation agreements. If countries want access to our markets they should be prepared to give their workers the fundamental rights which have been established by the ILO.


The response by many governments, including Australia, is that labour standards should be dealt with by the ILO and should not become a part of the trade liberalisation agenda. The governments which gave support to the proposal were essentially the Clinton administration, some Europeans and some Scandinavians.


At present internationally there is argument going on around the establishment of a Working Group within the WTO to represent the ILO, trade unions and employers to consider labour standards issues. It is hoped that such a Group could lead to acceptances of core labour standards by the WTO.


In Australia our efforts have been to achieve a standing consultative group on trade and labour standards issues and to have unions and other groups included in Australia’s delegations to the WTO and other trade liberalisation forums and through these moves influence employers and governments to support a linkage between core labour standards and trade liberalisation.


The experience of the WTO in Seattle and to some extent the WEF in Melbourne have caused some re-thinking of how the WTO and other international institutions undertake their work. In effect they now understand that civil society wants a voice in their processes and that economic rationalism alone is not the answer which is acceptable to many people.


We are also actively involved in the ICFTU’s work internationally and in the region to achieve stronger support for workers’ rights in the context of globalisation. We are working with the Labor Party to achieve a common position on trade and labour standards issues.


The second aspect of globalisation that we are particularly concerned with is international treaties which remove national sovereignty in regard to important economic, social and cultural issues.


One recent example of such a treaty was the OECD attempt to establish a Multilateral Agreement on Investment, the infamous MAI initiative. In effect, it sought to establish a position whereby governments could not positively discriminate in favour of national companies and that once accepted foreign investment could not be prejudiced by government legislation. The MAI also required that legislation which discriminated against foreign investment (such as media ownership) had to be repealed.


Following an international campaign lasting several years the MAI initiative was abandoned by the OECD in 1998.


Although our efforts in regard to the MAI were probably supported by many smaller governments, their position regarding Core Labour Standards has been one of opposition. The basis of that position is the argument that our position is really a form of protectionism. I believe there is little merit in that argument but we do need to take account of it in the way we put our public position. The policy position is that :



  • we are not opposed to greater trade
  • we understand that some jobs in Australia will go to other countries
  • we want “fair trade” and not “free trade” which means that we want workers in countries which want to trade with us to have equal rights



Before some concluding remarks I want to mention the dilemma of China and our manufacturing imports. The range of goods we import from China today is extensive. Tools, electrical goods, clothing, shoes, sporting goods etc.


Workers in China have no free unions independent of the government. The wage increases and improvements in conditions they achieve are not the result of free collective bargaining. There is no right to strike. All workers must be members of the ACFTU. Wages would be less than one-tenth of Australian levels for a 44 or 48 hour week. Eventually a process of democratisation will bring changes but what should we do in the meantime? How do we interact with the ACFTU to accelerate change? What do we say when an Australian manufacturer closes down to shift production to China?


In bringing these points to a future agenda we should recognise that globalisation in many of its manifestations is here to stay:



  • technology will continue to change




  • markets will continue to be liberalised and more open




  • pressure for less regulation will continue




  • there is however a question mark over smaller government and lower taxation due to community reaction to fewer and poorer services




  • pressure for labour market deregulation will continue – how it affects workers will largely depend on our capacity to engage and defeat those promoting the trend and so defend and improve existing standards



What can individual unions do in terms of participation in the globalisation agenda? In my view several things :


First, we must do the job in our own backyard. Unions must grow back to the levels of a decade ago. This represents our most fundamental challenge.


Second, we have to counter the effects of globalisation as they affect Australian workers. Trends towards casualisation, longer working hours, increased stress at work, individual agreements and outsourcing need to be countered by effective campaigns.


Third, we have to re-energise our policies on economic development to ensure that we maintain, on a competitive basis, strong manufacturing and service sectors.


Fourth, unions need to play an active role in their international federations with an objective of ensuring that they deliver practical outcomes and not become talk shops.


Fifth, unions in the public sector should become familiar with the WTO GATS issue and how it may affect public services such as health and education.


Finally, we have an overseas humanitarian aid union development organisation, APHEDA. All unions should be affiliated and play an active role in its work.


These and other issues represent an important agenda for the ACTU, Labour Councils, individual affiliates and the labour movement as a whole. They will continue to challenge us over the next decade and the way in which we respond will determine the shape and values of our society in the future.


Thank you.