Jun 24, 2010

IMF, WTO charm offensive falls flat at global labour conference

Corporate sector giants fail to woo delegates with call for increased—if regulated—trade

VANCOUVER—Delegates at the second World Congress of the International Trade Union Confederation (ITUC) experienced a rare appeal from the titans of international trade and commerce here on Tuesday, June 22. Senior representatives of the International Monetary Fund (IMF) and World Trade Organization (WTO) both delivered speeches, calling for more cooperation between the global financial sector and labour organizations.

Despite their support for increased regulation in the wake of the global economic crisis, the IMF and WTO’s call for more trade as a route to job creation and poverty reduction was not well received by the hundreds of international union representatives at the congress. It did not help that IMF Managing Director Dominique Strauss-Kahn and WTO Director-General Pascal Lamy were both polite but evasive in addressing the ITUC delegates, said CUPE National President Paul Moist.

“For all Mr. Strauss-Kahn’s talk of his organization’s adjustments in 2008, the IMF was correctly identified by the moderator as a ‘winner’ coming out of the global crisis,” said Moist.

As for the WTO, Moist added that Lamy was engaging in wishful thinking by trying to argue that increased trade can reduce poverty and social injustice in the world. “His statement was at odds with the track record of global trade deals leading to downward pressure on labour rights—far from increasing them. And you can’t achieve social equality and social justice when labour rights are reduced globally.”

Finding common ground?

In his opening remarks, Strauss-Kahn said that the IMF takes its interactions with the international labour movement seriously. He pointed to a joint conference with the International Labour Organization (ILO) in Norway, to be held in September, as a sign of progress—even though the ILO is regarded as a “poor third cousin” in terms of its influence on global affairs, noted Moist.

Strauss-Kahn said that the economic stimulus packages for international banks, pushed by the IMF, “worked because of the global cooperation that took place. This is one of the legacies of the crisis: when countries work together. There is no domestic solution to a global crisis.”

In defending the IMF’s actions during the crisis, he pointed to its shielding of minimum pensions in response to the financial meltdown in Greece. But he drew cynical laughter and tepid applause by suggesting that his organization and international labour have similar goals.

“We are both fighting for peace and against war, we are refusing domestic solutions to a global crisis, and we are against nationalism,” he said.

Not all of Strauss-Kahn’s points were off target, noted Moist.

“Canada has become the poster child for debt reduction, and we are gaining a reputation for not coming to the table with solutions,” said Moist. “Even Strauss-Kahn recognizes this when he calls Canada’s position on the transactions tax ‘ridiculous’. His comment underlines the narrow and destructive stance being adopted by Canada on the world stage—a replay of sorts of Canada’s non-productive role at the COP15 environmental summit. On the other hand, his purpose for a transactions tax seems to be merely to provide ‘insurance’ for the next time the financial industry screws up. And it doesn’t respond to the call for poverty reduction.”

To regulate or not to regulate

Meanwhile, the WTO’s Pascal Lamy praised Canada for its navigation of the global crisis, comparing its banking system favorably to that of the United States, where an unregulated financial environment led to a disaster.

Lamy took pains to dismiss the fears of labour that opening up international trade leads to widespread deregulation.

“There is no contradiction between opening up trade and the capacity of sovereign entities to regulate,” he said.

However, Lamy’s acknowledgement that the G8 and G20 have a smaller agenda this year because there has been no consensus on the environment, financial regulation or trade did little to inspire confidence among ITUC delegates.

“That’s a fascinating comment from the head of the WTO,” said Moist. “The fact that world leaders are gathering without placing tough issues on their agenda means that the winners are the bailed-out banks who are dodging regulation while the losers are the 34 million workers who have become unemployed since September 2008.”

COPE 491