The boom in global trade over the last two decades has not improved the quality of most jobs in poorer countries, the World Trade Organisation (WTO) and United Nations labour agency (ILO) said today.
Their joint report, whose conclusions may make a new global free trade pact even harder to swallow for some, found most workers in developing countries continue to face low incomes and limited job security, even in sectors tied to exports.
While international trade grew to represent more than 60 % of global gross domestic product in 2007, from less than 30 % in the mid-1980s, the number of informal workers has stayed constant or even grown in poorer states.
“Strong growth in the global economy has not, so far, led to a corresponding improvement in working conditions and living standards for many,” the Geneva-based organisations said.
Informal workers in areas like construction, agriculture and mining generally do not pay tax and lack access to benefits such as disability insurance or pensions. They remain as vulnerable now as before the trade boom, the report said.
“Even in the formal economy, a growing proportion of workers is undeclared or works under precarious conditions,” the WTO’s Pascal Lamy and ILO chief Juan Somavia said in the report.
“These outcomes are likely to worsen as a result of the global financial crisis,” they said.
The WTO’s 153 member governments have worked for eight years to clinch a new “Doha Round” trade accord, which would open up global markets to goods and services by slashing duties and other penalties charged at borders.
That agreement, whose negotiations began in Qatar in 2001, would also reduce the subsidies countries pay to shield their farmers and factory workers from outside competition.
But top economies including India, China, the European Union and the United States, have been reticent to do so, putting the agreement which requires full consensus out of reach.
The report acknowledges the growth that followed previous WTO trade rounds and various bilateral and regional accords had principally benefited skilled workers, with little gains for physical labourers.
The ILO and WTO concluded that further liberalisation of global trade has the potential to yield long-term labour market benefits and suggested that future trade reforms “can be implemented in an employment-friendly way.”
Their report said the flexibilities, or wriggle room, afforded to developing countries in the Doha Round should help them encourage good labour practices and draw more people into mainstream, regulated employment.
“Opening only parts of the economy and keeping certain sectors or firms protected from foreign competition is likely to worsen distortions in the economy without necessarily bringing any macroeconomic benefits.”
Pic: Young SA men sitting around and doing nathing