Vol. XII, Bulletin No. 11                                                    November 2007
Children Don't Need Blood-Stained Toys

Republished below is the full text an illustrated article that appeared in Human Rights for Workers exactly 10 years ago. The colorful illustration, with the message "Our Children Don't Need Blood-Stained Toys," was used by worker rights groups in Hong Kong to alert consumers around the world to Asia's deadly toy factory fires, including one in China that killed 87 workers and injured at least 60 more.

The article of November 20, 1997, is followed by a brief update about China's sweatshops today and an article about a right missing from the ILO Declaration on Fundamental Rights. 

[The Bear is Crying]

Protesting Blood-Stained Toys Made in China

'Mommy, Are We Killing Chinese Workers?'

A parade of men in sober business suits appeared before the Truth and Conciliation Hearings in Johannesburg, South Africa, early this month [November 1997]. The chief executives of the nation's biggest corporations and banks lined up to apologize for their support of apartheid over the last century.

Anglo-American, a huge conglomerate, expressed regret that it had done so little for its black workers. Mining executives admitted that exploiting racial and tribal divisions helped cut labor costs. One sugar company executive was questioned sharply about the killing of an anti-apartheid activist on the property of his company and its cooperation with security police, As an article in the 11/14/97 New York Times explained:

"Very few executives openly opposed apartheid until the mid-1980s, when sanctions began crippling the economy. Meanwhile, many companies helped the Government evade trade sanctions, thwart the oil embargo and the United Nations arms embargo so effectively that the country built a powerful arms industry and even nuclear weapons."
Fast-forward to 2017: How Will They Explain Themselves Then?

I wonder what American corporate executives will have to say 20 years from today about their conduct in the People's Republic of China, especially about

In retrospect, corporate executives may seek to excuse themselves by blaming the Clinton administration's "constructive engagement" policy, but they would be trying to disown a policy that has their fingerprints all over it. So I can imagine the bright grandson of a multinational business executive asking:

"Grandpa, what did you do in China? Did you let Chinese workers go to jail?"

Awakening Consciences Today About Today's Realities

The crass exploitation of the most vulnerable infects all China's huge export industries, but the fate of workers in its thriving toy industry is especially scandalous. There some 1.3 million workers, mostly young women, are imperiled by fires, poisonous fumes, and other hazardous conditions in makeshift factories producing for the world market. The worst disaster occurred just four years ago, when a toy factory fire in the Shenzhen export processing zone killed 87 workers and injured more than 60, almost all young women from rural areas.

In Hong Kong several private organizations, grouped together in a coalition for the safe production of toys, have long alerted the world to what is going on. One of the first Bulletins featured their illustration (shown above) and an article titled "Our Children Don't Need Blood-Stained Toys." But the problems of China's toy workers persist. This year the Hong Kong groups are sending the same alert to the industry and its customers.

So the moral issues won't wait for a Truth Commission 10 or 20 years hence. They are pressing right now for China-connected bankers, corporate executives, shareholders, and consumers. I can imagine an Internet-connected American child holding a made-in-China toy and wondering: "Mommy, are we killing Chinese workers?"
                                                                        *   *   *

The Realities Today: A Brief Update

During the past 10 years, U.S. and other foreign corporations have become more heavily dependent on the People's Republic of China as their manufacturing base.  Many now embrace statements of corporate social responsibility, and even boast of more specific codes of good labor practices that are supposed to cover factories owned by their Korean, Taiwanese, and other suppliers in China.  Yet China remains the "world's sweatshop," a title of dishonor that the New York Times bestowed a few years ago.

The latest news reports illustrate why that title still fits.  In Fujian province, the thriving shoe export center in east China, a fire that broke out in a shoe factory on October 21 killed 34 workers and hospitalized 21 others, according to a brief account in the Shanghai Daily.

'American Imports, Chinese Deaths'

Meanwhile, in the United States the Salt Lake Tribune published a four-part series in late October titled "American Imports, Chinese Deaths," the result of a year-long investigation conducted by reporter Loretta Tofani in China and in Utah, where she resides.  She drew on visits to more than 25 factories in China and interviews with workers but also with dozens of attorneys, business leaders, government officials, and others to reach this assessment:  the health and safety conditions in China's factories are grim -- grim even in the many thousands of factories producing for export. 

She writes that antiquated equipment and flawed health and safety practices, largely without government regulation, have killed or mutilated uncounted "millions" of Chinese workers.  Her over-all analysis is enlivened by specific information she obtained in her interviews in China and the United States,  For example:

Unhealthy Flaw in ILO's Rights Declaration

The International Labor Organization's "Declaration on Fundamental Principles and Rights at Work," adopted in 1998, does not include the right to a safe and healthy workplace among its four core labor rights.  The Declaration needs to be revised to add that missing right. Some of the reasons why were listed in a HRFW article, "Health and Safety as a Core Worker Right," published two years after intense negotiations among business, labor, and government representatives in Geneva had reached agreement on the four rights covered in the Declaration.

ILO decision-makers ignored the idea. They should finally pay attention now, especially because the ILO Declaration is being used as the basis for strengthening the labor protections of trade agreements.  Without protections against deadly workplaces, those agreements have a serious flaw.

Do Americans Care about Imports from China?

 "Americans Are Not Shunning Chinese Goods."  That was the New York Times headline over its October 22 article about a New York Times-CBS News poll on American reactions to all the lead-coated toys and other tainted goods imported from China.

"Have you stopped buying products made in China as a result of the recent recalls, or haven't you?" the pollsters asked. The responses:
In other words, three out of 10 Americans are shunning at least some China-made goods.

On another significant question, "For most of the goods you buy, do you notice what country they are manufactured in, or is this something you don't pay much attention to?",  a surprising number -- 71 percent -- said that they do notice the country of origin.  Only 27 percent said they don't pay attention; one percent said it depends on the product. 

Hillary Urges Moratorium on Trade Deals

The United States should take a time out in negotiating free trade agreements, Hillary Clinton said last month in a speech in Iowa and in a more detailed interview with USA Today. 

"I think that, on balance, trade was a net positive for America and American workers during the 20th century," she said in the interview.  "We have to consider carefully, 'What's the role of trade going forward?  How best do we position the United States to take advantage of the global economy?'  And I don't think we've had a serious conversation about that."

Distancing herself from her husband, who signed the North American Free Trade Agreement (NAFTA) in 1993, Mrs.Clinton singled out NAFTA as an existing agreement that needs to be reassessed and "adjusted," because its benefits have gone to the wealthy and cost jobs for working people.  "I think we do need to take a deep breath and figure out how we can make it work for the greatest number of people."

True to form, the Washington Post, a vigorous cheerleader for free trade agreements past, present, and future, dismissed Ms. Clinton's views as "opportunism under pressure" from her Democratic rival, former Senator John Edwards.  Taking for granted that she had only temporarily strayed from the right path, the Post's October 10 editorial said that "there's little chance that her position reflects any deeply held principle."  Moreover, the Post scoffed at her linking the need for a reassessment to global changes since the 20th century.

How the World Has Changed, Drastically So

But the world is indeed undergoing a transformation that has eluded the Post's editorial board.  Global finance has exploded to the point that it has changed the very nature of trade. Under the "new financial capitalism," Martin Wolf, the Financial Times' chief economist, wrote in June, global trade in good and services has dropped to second place under "trade in assets," particularly through private equity funds, which are "conglomerates that trade companies." 

Among the consequences: "Across the globe there has been a sizable shift in income from labor to capital ...Financial speculators earn billions of  dollars, not over a lifetime but in a single year.  Such outcomes raise political questions in most societies.  In the U.S. they seem to be tolerable."

Protection of Worker Rights Needs To Keep Up with Times

So Hillary Clinton is right to demand a reassessment, much as it irritates the Washington elite. That reassessment must include even the demand long made by the U.S. and international union movement: adding labor and environment conditions based on ILO standards to the traditional trade sections of international agreements. That demand is tailored to the 20th century General Agreement on Trade and Tariffs (GATT), and inadequate for the transformed global capitalism of the 21st century. 

Consider, for example, the spectacular rise in the volume of companies taken over by, or merged with, other companies in different countries.. According to the 2007 World Investment Report, in 1990 the total number of cross-border mergers and acquisitions was 151; in 2006 that figure jumped to 880, 172 of them the result of mega-deals valued at more than $1 billion each. Current measures to protect worker rights cannot keep up with global mega-capitalism as it exists in the 21st century. 

Trade adjustment assistance to victims of free trade, now advocated even by some fervent globalizers, was woefully inadequate in the 20th century, and is even more so in the 21st. Such measures alone are inadequate to address global challenges.  And global trade and investment policy as a whole -- not just a chunk of it -- needs adjustment to address the concerns of workers both in the United States and abroad. 

How?  That should be shaped by a serious national conversation that Hillary Clinton and others must continue to pursue even after the Iowa primary. 

The Globalization of Hunger

"The Farm Bill [now being considered by the U.S. Congress] has far-reaching implications for farmers and food systems the world over. It is set to perpetuate a process whereby heavily subsidized U.S. factory farms overproduce grains that are dumped in poor countries, bankrupting local farmers, who can't compete with subsidized prices. We've begun to hear a bit about the plight of these farmers, but few people know that most of them are women. In fact, women produce most of the world's food. They do so on small plots of land, working hard to feed their families and generate enough income for things like school fees and children's shoes....

"Big farming is part of a larger corporate economic model that prioritizes profit-making over all else, even the basic right to food.  Around the world, agribusiness bankrupts and displaces small farmers, and directs farmers to grow export crops instead of staple food."

-- from an article, "The Globalization of Hunger," on the website of Madre, an international women's human rights organization.

How NAFTA Spurs Migration to U.S.

Few advocates of the North American Free Trade Agreement (NAFTA) were more effusive than Henry Kissinger.  In his nationally syndicated column on July 18, 1993, he hailed NAFTA as "the architecture of a new international system,...a first step toward the New World Order." 

President Clinton's cabinet members were generally less visionary than Kissinger, but were equally zealous in painting a glowing picture of NAFTA's benefits. Attorney General Janet Reno contributed a major selling point by predicting that NAFTA would reduce illegal immigration by up to two-thirds.

A new report by the UN Conference on Trade and Development describes some of NAFTA's disappointments, particularly in regard to immigration.

Illegal Immigration Has 'High Social Costs'

"Perhaps the greatest disappointment with NAFTA," the report says, "has been that it has failed to stem migration from Mexico to the United States, particularly illegal migration, which carries high social costs.  Since the standard of living and employment opportunities of the Mexican people have not significantly improved, and the wage gaps with the United States have not narrowed, incentives for migration remain strong." 

A huge incentive for migration stems from the impact of agricultural trade liberalization on Mexico's rural areas, where most Mexicans live. "Producers of maize, which is a major staple food crop for Mexico, have been adversely affected by an increase in imports from the United States.  Corn prices fell due to the Mexican market being flooded with cheaper imported corn produced more efficiently and heavily subsidized.  The smallest and poorest farmers, unable to compete, have suffered the most."

NAFTA, the report points out, treats free trade itself as its primary objective, rather than treating trade "as an instrument for enhancing growth and development or achieving income convergence." 

Who Gains from Import-and-Re-Export Process?

As one result, U.S.-Mexico trade has consisted more and more in Mexico's importing parts and components for assembly and re-export back to the United States.  "Thus an important part of the value added contained in these products accrues to foreign owners of capital, knowledge, and management."

The study's section on NAFTA's impact on Mexico concludes that, in spite of engendering spectacular expansion in trade and in foreign investment,  "NAFTA has not significantly contributed to solving the structural problems of the Mexican economy that lead to migration in the first place."

In other sections, the report explains how North-South bilateral and regional free trade agreements generally "tend to reduce the policy space of developing countries to influence the manner of their integration into the global economy," especially through FTA regulations that protect intellectual property rights and  investor rights.  

Republicans, Too, Are Souring on Free Trade

According to a new Wall Street Journal-NBC News poll, nearly 60 percent of Republican voters believe that foreign trade has hurt the U.S. economy.

The poll posed these two statements to a sample of Republican voters:
Fifty-nine percent of the respondents agreed with the second statement, that foreign trade has been bad.  Thirty-two percent said foreign trade has been good.  Six percent volunteered the view that trade has been both bad and good.

In a separate series of questions, 64 percent of the respondents said they agreed with a Republican candidate who "favors tougher regulations to limit import of foreign goods."

Now a Different Question with Different Results

Meanwhile, also early in October, the New York Times reported that "people around the world strongly view trade as a good thing...." and that 59 percent of Americans hold the same view.

The October 5 story, headlined "Global Support for Trade, Mixed with Some Doubts," summarized a Pew Global Attitudes Project that polled people in 46 countries and the Palestinian territories. 

The key survey question on trade, not quoted in the Times, was: "What do you think about the growing trade and business ties between (survey country) and other countries -- do you think it is a very good thing, somewhat good, somewhat bad or a very bad thing for our country?"  [The italics are mine.]

Oddly, according to this poll, people in the 45 countries and the Palestinian territories have a more positive view of  "growing trade and business ties" than do Americans. In other words, the poll measured Americans as less enthusiastic about their country's foreign trade and business ties than people in most of the rest of the world..  Neither the Times article nor the Pew Project explained why.

In its Outlook section of the October 21 the Washington Post also reached a broad conclusion from the Pew survey.  "In rich and poor nations alike, most respondents backed global trade and free markets."  Although its report was a quarter-page long, the Post also did not quote the more narrowly focused poll question. 

A Pro's Advice to Presidential Candidates

Even the Democratic Presidential aspirants are not doing enough to address the concerns of American workers about the continuing exodus of jobs from the United States, says Jerome I. Levinson, a distinguished professor of law and veteran advocate of worker rights.  "The candidates should learn from the lessons of the past 15 years and offer a bolder and broader agenda on globalization," he writes in a special report, "Globalization: What Is To Be Done?" issued in October by "Foreign Policy in Focus."

The major overall lesson, Levinson argues, is that the United States must adjust to a new international economic era and revise the international economic system that "has evolved... in such a way that it disproportionately favors capital to the disadvantage of workers and unions."

Specifically, he targets the North American Free Trade Agreement (NAFTA), adopted by the U.S., Canada, and Mexico, for serving as "the model for undermining worker rights."  That model, copied in subsequent U.S. free trade agreements, deals as much with foreign investment as with trade, and has granted corporations concrete incentives to move jobs abroad.

Including core worker rights in future trade agreements should be a must (a "deal breaker") in future agreements on the World Trade Organization level, Levinson insists.  But other reforms are necessary, he adds, especially at the World Bank and International Monetary Fund -- "two pillars of the American strategy of previous decades" -- which are now in disarray and facing "a much more diverse world of economic policies and development strategies."

Playing the Frame Game

To win support for your side in a public policy dispute, you need to be skilled in "playing the frame game": that is, skilled in shaping and promulgating a persuasive framework of the issues involved.  A book published by the Institute for International Economics, "Case Studies in U.S. Trade Negotiation," emphasizes the importance of that skill in the complex "game" of trade negotiation.  Not negotiations plural (between governments), but negotiation singular -- between Congress and the White House but also with business and labor, as well as the media and other voices influencing public opinion.

"Playing the frame game" may sound flippant, but it is serious stuff.  As you may have noticed, the purpose of many articles in Human Rights for Workers, including this month's issue, is to cut through the complexities of globalization and to frame the core issues in a manner accurate, enlightening, and convincing.

An About-Face on Unions by Canadian Industrialist

"In our system, there is no great need any more for unions," Frank Stonach, founder and chairman of the Canadian auto parts maker Magna International, told a business reporter in February 1978.  He was explaining why his company actively opposed unions in his plants, only one of which was unionized at the time.

But Stonach has changed his mind.  He is now leading his multinational down a new path of union-management cooperation.  At a televised news conference on October 15,  he joined Buzz Hargrove, president of the Canadian Auto Workers, in signing a "Framework of Fairness Agreement," a set of principles setting the environment for relations between the two sides for the next three years. Both men called the agreement unprecedented.

One of its major features is to open the door gradually for all Magna's 17,000 hourly paid employees, in 42 plants now non-union, to be organized by the Canadian Auto Workers. Three facilities, with about 850 employees, are already unionized, one only after a vigorous anti-union campaign. In the all the future secret-ballot plant elections, Stonach said, he will urge workers to vote for the CAW.

'Society Needs Checks and Balances'

Why the change?   In his October 15 statement, Stonach explained: "The traditional, confrontational mode of labor relations is unproductive and wastes energy....Magna recognizes that the CAW has the ability to be an important ally in addressing the many competitive challenges our industry is facing..."   At the press conference he added:  "Society needs checks and balances.  Business has one mandate: to make a profit.  But that has to be tempered."

On the same occasion, according to a New York Times account, CAW President Hargrove explained the significance of the new atmosphere at Magna:  "When you don't start out with a fight over whether or not workers are entitled to a union, you can do a lot of things."  For one thing, the CAW was willing to accept a no-strike provision for the collective bargaining talks to be initiated held during the life of the new agreement.  It parallels a no-lockout provision for Magna.

Never before, Hargrove said, has "a major employer with multiple workplaces sit down with us and say: 'We believe the union has a role in the workplace.'" 

The new CAW-Magna relationship grew out two years of informal talks.  During that time Magna and the union cooperated on a project helping victims of Hurricane Katrina.  They also discussed the hurricane-like competition, especially from Japan and Korea, that has hit Canada's auto industry, thanks to one-way trade deficits.  The CAW has urged the Canadian government to halt negotiations of a free trade agreement with Korea.

Email: A Welcome Pat on the Back

In last month's issue of Human Right for Workers I wrote a long article titled "Policy Contrast: Lead Paint vs. Child Labor" based on points made on his blog by Dani Rodrik, professor of international political economy at the Harvard's Kennedy School of Government.  I wrote him an email marveling at his output, and calling his attention to the "Policy Contrast" article and another dealing with the UN Human Rights Council project led by John Ruggie on integrating corporations and human rights.

Back came this message: "Dear Bob: Thanks very much for your support. I do read your newsletter, and profit from it. All the best, DR"

(For a summary of Rodrik's insights on current trade controversies, see "Saving Globalization from Its Cheerleaders" in the June issue or HRFW.)

Human Rights for Workers: Bulletin No. XII-11     November 2007           

Robert A. Senser, editor
Copyright 2007
(Send e-mail)

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