I appreciate having this opportunity to comment on last month’s Summit of the Americas in Quebec City, Canada, on progress to date in negotiating a Free Trade Area of the Americas (FTAA) and on renewal and possible expansion of the Andean Trade Preference Act (ATPA). I speak for 250,000 members of the Union of Needletrades, Industrial and Textile Employees (UNITE) in the United States and Canada, many of whom were in Quebec City during the Summit. I also speak for an equal number of retired members of our union, many of whose lives were made more difficult because of United States trade policy.

In addition to the impact of trade on our members in Canada and the U.S., UNITE works with garment worker unions and union federations throughout Latin America. We are aware of the prolonged and profound economic hardships suffered by working people of the region, so we wholeheartedly support any policy of the United States that would raise the living standards of workers in the region.

The negotiations on FTAA and the expiration of ATPA provide a critical opportunity for the government of the United States to re-think how it can best help promote development in Latin America. There is no evidence that nearly 20 years of trade under various versions of the Caribbean Basin Initiative (CBI), 10 years of trade under the ATPA or 7 years of trade under the North American Free Trade Agreement (NAFTA) have advanced the most pressing development needs of the peoples of those respective regions. Furthermore, there is considerable evidence that the special U.S. apparel market access programs for Mexico and the Caribbean Basin countries, the model on which the proposed "enhancement" of ATPA is based, may actually retard development.

Any strategy for development must strengthen democratic institutions that move developing societies toward the rule of law and a more equitable distribution of wealth. A legitimate FTAA and a genuine enhancement of ATPA would place them in the context of such a strategy, one adapted to the most pressing needs of the Western Hemisphere today.

For all of its virtues, trade in the 90s has left multitudes of the world’s citizens behind. While globalization has created spectacular wealth for the few, whatever has trickled down to the many must not be confused with social development or even economic growth. Workers in both developed and developing nations have seen their real incomes stagnate or decline over the past decade. Nearly 2 billion people are living on less than one dollar a day; 2.6 billion lack even basic sanitation. Hundreds of millions of people are malnourished. Globalization has increased income and social disparities within nations and between nations. It has left many people behind.

The sheer size and, with it, the power of multinational corporations is overwhelming nations. Of the 100 largest economies in the world, 51 are corporations – only 49 are countries.

Those who are negotiating trade agreements today and hereafter ignore these facts at their peril. We do not believe Congress should or will continue to pass trade legislation or approve trade agreements that protect the interests of multinational corporations and investors and ignore the interests of working families.

As Dani Rodrik, Professor of International Political Economy at Harvard University, put it:

It is UNITE’s position that steps must be taken to bring the Western Hemisphere countries into compliance with internationally recognized core labor standards, or the result will be increased inequality and the stagnation of living standards.

• productivity growth;
• empowerment of people;
• equity; and
• sustainability.

The U.S. government has not evaluated whether current trade policies have promoted measurable progress on the above four dimensions in the Western Hemisphere. Exports of products to the United States have grown, according to the U.S. International Trade Commission. Officials from some transnational corporations say that they feel less inhibited about doing business in various parts of the region. No thorough study has been done by the U.S. Government, however, of the impact of NAFTA, CBI in its various forms and the ATPA on the working people who actually produce articles covered under the trade acts.

Evidence is available, however, about the impact of special apparel market access programs on the working people of Mexico and Central America. Both the CBI and NAFTA programs were promoted as development strategies for Mexico and the Caribbean Basin. The evidence from these countries suggests, however, that simple extension of special U.S. market access to apparel and textiles (and by extension, other products) will fail to promote or consolidate any of the cornerstone elements of development in the Hemisphere.

Apparel exports to the United States from Mexico and a few Caribbean Basin countries boomed during the 1990s. Employment in Mexico’s apparel industry increased some 60 percent between 1993 and 1998. The CBI and Mexico apparel booms, however, have not driven forward development in those countries:

The rights of workers have long been defined by the International Labor Organization (ILO), and were made binding on all member-nations in 1998. The countries in the FTAA are all members of the ILO. They are, therefore, bound to "promote and realize" the basic rights of their workers: freedom of association, the right to organize and bargain collectively; and the right to be free from forced labor, child labor and discrimination in employment. There is no evidence that special access to the U.S. market encourages the exercise of workers’ rights. Again the experience of export-oriented apparel promotion in Mexico and CBI provides a dismal record:

What fruits there have been from the apparel export boom in Mexico and the CBI countries have been distributed inequitably. The principal beneficiaries of the market access programs have been U.S.-based apparel companies, retailers and importers, elites in Mexico and the CBI countries, and some Asian companies that have set up apparel and textile factories in Mexico and the Caribbean to export to the U.S. market. Workers in Mexico and the CBI countries are not getting their fair share.

The United Nations' Economic Commission for Latin America and the Caribbean (ECLAC) study of Mexican and Central American maquiladoras has aptly summarized a fundamental flaw with the maquiladora-led growth strategy:

• Sources: (imports) U.S. Department of Commerce, Major Shippers Reports, various years; (wages) Bobbin Consulting Group (1987), and Werner International Management Consultants (1998); (wages *) UNIDO available via the internet at http:\\www.unido.org.

Apparel executives see tariff preferences as a useful tool by which to pressure supplier companies to lower prices. The apparel industry magazine Bobbin recently related the expectations of the president of Sportif, a U.S. branded sportswear company, about the role of "NAFTA parity" for CBI countries. In the executive’s view, Bobbin reported,

This might seem to apparel industry executives to be a positive development. However, for the working people of North, Central and South America whose livelihoods are tied to the transnational apparel industry, intensification of the deregulated scramble for market share is cause for grave concern. The same is equally true of workers making other manufactured goods and even those providing soon-to-be integrated services.

Any policy that rests its hopes for development primarily on apparel industry export promotion is flawed. Any such policy that fails to promote and protect nationally and internationally recognized worker rights is fatally flawed. Such a policy makes the United States complicit in the perpetuation of worker abuse.

Despite condemnation from unions and the ILO, new labor laws in Colombia, Peru, Ecuador and Bolivia have undermined the right of collective bargaining in those countries. In Peru, according to the State Department’s Human Rights Report for 2000, "the ILO specifically criticized a provision that permits businesses to employ youth workers between the ages of 16 to 25 as up to 30 percent of the workforce; workers in this age bracket are precluded from union membership and participation" (emphasis added).

As a result of these practices, the number of collective bargaining agreements in the region has dropped precipitously. A recent ILO study reports that the number of agreements in Peru dropped from 1,762 in 1990 to 623 in 1996, and in Ecuador from 315 in 1987 to 206 in 1996, while in Bolivia only two new agreements were signed in the decade from 1990 to1999.

Additional weakening of labor laws in export processing zones (EPZs) serves to further impede union organization. According to the State Department, in Peru: "Special regulations aimed at giving employers in export processing and duty free zones a freer hand in the application of the law provide for the use of temporary labor as needed, for greater flexibility in labor contracts, and for setting wage rates based on supply and demand." In Colombia, there are no unions in the EPZs, while in Ecuador employers have used short-term contracts to prevent organization in the zones.

The Medellin-based National Labor School reports that approximately 1,500 union members have been murdered since 1991, when the ATPA first took effect.

• Over 100 union members were killed during 2000, according to a tripartite Colombian commission;
• Thirty-five additional killings of trade unionists have already been reported in 2001.

The U.N. High Commissioner for Human Rights, in her 2001 report on Colombia, lay a portion of the responsibility for the persistence of human rights abuses at the feet of the government:

In addition to the extra-judicial violence perpetrated with impunity in Colombia, the latest Annual Survey of Violations of Trade Union Rights issued by the International Confederation of Free Trade Unions reports that authorities in the Andean countries utilize various tools to repress strikes. For example, in Colombia 149 people were injured and 418 arrested when security forces clashed with workers in 1999.

Under the Generalized System of Preferences (GSP), the U.S. may extend trade preferences to a country only if it "has taken or is taking steps to afford to workers in that country…internationally recognized workers' rights." The U.S. trade union movement and other labor rights activists have tried on numerous occasions to utilize the workers’ rights provision in response to gross and persistent violations of those rights in Western Hemisphere countries that benefit from U.S. trade preferences. The labor movement has found the enforcement mechanism flawed. One major problem is the snail’s pace of investigations; another is the fact that the U.S. Government has too much discretion over whether or not to take action.

Take the example of Guatemala. Labor rights advocates in the United States first petitioned the U.S. Government to investigate gross violations of internationally recognized workers' rights in Guatemala in 1986. Petitions also were filed in 1987, 1989, 1990, 1991 and 1992. The U.S. Government refused to act on the petitions until 1992. The Government engaged in a "review" of the state of workers' rights in Guatemala through 1993. In 1994 the GSP statute lapsed and the review process ended. The AFL-CIO submitted new allegations of violations of workers' rights in 1995 — again, the U.S. Government chose not to suspend benefits, but to "review" Guatemalan law and practice. The U.S. terminated this review in 1997, having concluded that the government of Guatemala was, indeed, "taking steps" to afford Guatemalan workers their internationally recognized rights. The AFL-CIO filed a new petition in 1998. The U.S. Government rejected the new petition, then reversed itself and self-initiated an investigation in the wake of brutal physical attacks on Guatemalan banana workers’ union leaders. Since the decision to investigate was made, the U.S. Government has made a good faith effort to promote respect for workers’ rights in Guatemala. But while the U.S. Government investigated, the Guatemalan courts rendered judgments against the banana union leaders’ assailants that amounted to a slap on the wrist and made a mockery of justice. The union leaders were forced to flee for their lives, and came to the United States in March of 2001.

The leaders of the Guatemalan banana workers’ union join many other labor leaders and workers’ rights advocates from throughout the Hemisphere likewise forced into exile. The absence of those activists and leaders represents a real setback for development in the Americas.

The workers’ rights clause in the ATPA and the related enforcement mechanism established by the U.S. Trade Representative are simply inadequate to deal with the level and intensity of exploitation that takes place on a routine basis in many of the Andean countries. Both the law and the enforcement mechanism are especially inadequate for dealing with countries where paramilitary forces, government authorities, and employers mount assaults on trade union rights on a daily basis.

The FTAA will not even include the weak labor provisions in the ATPA, the GSP or the CBI NAFTA Parity program adopted in 2000. It does not include the weak and mostly unenforceable labor side agreements that are in NAFTA. The ongoing negotiations for the FTAA have studiously avoided serious consideration of labor rights and the critical connection between labor rights and economic development. The nine negotiating groups for the FTAA do not include a group on labor issues, nor are labor issues being negotiated by any of the groups. The United States has not insisted that labor rights be included in the FTAA, nor has any other country.

Half a million U.S. apparel and textile workers have lost their jobs over the past ten years as U.S. apparel retailers and brand marketers have shifted production and sourcing to Mexico, the Caribbean Basin and, to a lesser degree, the Andean countries. These production and sourcing shifts have failed to contribute in any measurable way to development in those countries and have driven down standards for apparel workers in the United States, many of them immigrants from Latin America. Members of UNITE, therefore, find it hard to understand why U.S. policy makers expect that expanding the NAFTA model of trade to the rest of the Hemisphere will improve working conditions, lift standards of living, and enhance people’s freedom in the region.

Negotiations for expanded trade in the Western Hemisphere must include as a core commitment a concerted effort to strengthen institutions – both within individual nations and at the international level – that will (1) ensure substantial compliance with existing laws that promote and protect workers’ rights and (2) promote movement by governments and employers in the region toward full respect for internationally recognized workers’ rights.

Without such action, the FTAA and a renewed and expanded ATPA will simply accelerate the race to the bottom for millions of workers. That is not acceptable.