Journal of International Affairs (JIA): Over the last decade, countries across the world have responded to economic stagnation by pulling back from international institutions. What role do you think organizations like the ILO can play in an era marked by rising nationalism?
Eric Biel (EB): The ILO has been something of a quiet success story against this backdrop of countries stepping back from certain international commitments. The reason the ILO has functioned a little differently is because of its tripartite structure, which incorporates governments, workers, and employer representatives. This structure can be a challenge in terms of finding consensus, but it also means that governments are not the only decision-makers at the table. They have to work together with these other stakeholders, which gives the ILO a unique institutional structure.
The other international organization I probably know best is the World Trade Organization (WTO). The WTO is under tremendous siege right now. Critics fear that the WTO’s rules on binding dispute resolution cede an important portion of national sovereignty to international decision-makers. The problem for the WTO is that it has no real constituency to support it. It came about in the mid-1990s when support for stronger international institutions was growing. Now, almost two decades later, the WTO lacks that level of support both in this country and elsewhere.
What international institutions need to do is demonstrate the value-add of collective action. The ILO is one of the lesser known international organizations. But one of the reasons it has survived for one hundred years is that is has the voice of workers and employers, who can convince sometimes skeptical and divided governments about the value of collective action.
JIA: Economists have pointed their fingers at many possible drivers of economic stagnation and rising inequality: trade, migration, corruption, technological change, etc. What have we overlooked?
EB: Typically, technology and the vast changes going on in the economy are given a large degree of the credit, or blame, for growing inequality. I can’t dispute that.
But I think there is a need to investigate certain other issues further. I come from a trade background. Trade is something where deliberate public policy choices have enormous implications for inequality domestically and abroad. There are ways to structure trade policy in a way that could mitigate inequality. We could build in stronger protections for worker rights, for example.
Trade is something I’ve been interested in for quite some time. However, earlier in my career I probably wasn’t as cognizant of important distributional questions that have been come to light in recent years.
I worked as Trade Counsel at the Senate Finance Committee during the first NAFTA—NAFTA 1.0—and the truth is, despite the protestations of some in the labor movement, very little attention was given to the fact that we were entering into a trade agreement with a country, Mexico, that had a very different level of economic development than us—not to mention a country that had a very different political structure in place at the time. Somehow, this was almost an afterthought when the US negotiated NAFTA 1.0.
JIA: When you talk about the perils of trade deals between countries with different wealth profiles, my mind jumps to the Trans-Pacific Partnership (TPP). Are you suggesting that TPP overlooked those issues as well?
EB: I was part of the administration that negotiated TPP. At the time I served as the Associate Deputy Undersecretary for International Labor Affairs at the Department of Labor. I thought that TPP represented a modest step forward and an improvement on previous trade agreements in many regards. With regard to the one chapter I knew best, which was the labor chapter, TPP was light years beyond what NAFTA had been 25 years before. Still, it fell short in certain areas of enforcement and as a result it received opposition from organized labor.
Overall, I think that it is regrettable that TPP was abandoned by this administration. There certainly are legitimate concerns that have been raised about some of the agreement’s provisions. But there should have at least been more serious analysis of its pros and cons. The irony is that a lot of what the current administration has subsequently negotiated in the labor sections of NAFTA 2.0 come straight out of TPP.
I’ll give you one specific example of how TPP would have improved labor protections. No country would have had to undertake more profound obligations under the labor provisions of TPP than Vietnam. Vietnam agreed not only to the labor chapter in the deal but also to a much more detailed operational plan for implementing specific provisions. The changes demanded of it would have been transformative in terms of its labor management system. Arguably, it would have had an even deeper effect on the relationship of the Communist Party to Vietnam’s workers and other citizens.
It never made any sense to me that an administration that had made a priority of combatting Chinese influence in the trade and security realms would give up on the agreement. Those provisions would have made Vietnam, if not a bulwark against, at least a counterexample to the Chinese model of economic development. The minute the Trump administration abandoned TPP, some of the leverage that it provided vis-à-vis China was lost.
JIA: It sounds like your saying those who wrote TPP, by and large, did learn the lessons of NAFTA 1.0, yet it still fell victim to the bad reputation of that earlier deal?
EB: TPP has had critics on both the left and the right. The interesting thing was not the criticism from organized labor and certain civil society groups. That criticism of trade policy has been there for a quarter century.
To me, the surprising development was the criticism that came from within the Republican Party—not necessarily from free-market conservatives, but from the growing Trump wing of the party. As a result many Republican Members of Congress who had supported prior trade agreements seemed to step back from pro-free-trade positions as the President began to express his antipathy to almost any previously negotiated trade agreement.
As a result, you had this confluence of skepticism within the progressive, liberal segment of the Democratic Party and more conservative elements of the Republican Party. This undermined any chance of moving forward with TPP.
JIA: Since the Great Recession, a number of unconventional economic policies have made their way into the mainstream: universal basic income, anti-trust, and free college, for example. What reforms do you find most compelling and why? What deserves more serious consideration?
EB: Many of the ideas you referenced are being discussed by Democratic leaders in Congress as well as announced candidates for President, who are seeking to shape the direction of the Party in the lead-up to the 2020 elections. So there's a spirited policy discussion going on already, and as a result, which ideas and approaches end up influencing the Democratic platform is very hard to predict.
You have got a spectrum of candidates ranging from those who have been extremely critical of more traditional domestic and international economic policies, to others who are more center, center-left. Still, I think that paying attention to the issues that are featured in the ILO’s Global Commission on the Future of Work report can ultimately help unify the Democratic Party.
The report offers a fairly progressive vision of the roles and responsibilities of government and business with regard to workforces around the world. It is not a radical document. It was agreed to by commissioners from a lot of different backgrounds—government, business, unions, and civil society. Consensus was arrived at on a number of proposals that would strengthen social protections; would invest in workers in terms of lifelong learning; and would address some of the concerns about safety nets and transitional assistance for vulnerable workers.
To me, it is encouraging that all the ideas you mentioned have been put out there on the table. The ones that are crazy or that are unaffordable will probably wither away. Then the party will have to get in the business of finding more practical but still ambitious proposals. And I think that is all to the good. By having a lot of different voices across the spectrum, there will be a very robust debate.
JIA: You have held many senior roles within the US government. What role should the US play in promoting international labor justice?
EB: Even though there are a lot of challenges and shortcomings in this country, including child and forced labor, there is still a great opportunity for the US to lead by example at the government level on international labor rights. Through the work of government entities like the U.S. Trade Representative, the Department of Labor, the Department of State, and USAID, the United States can push for realization of the 1998 Declaration on Fundamental Rights at Work—the so-called core labor standards. It is not about altruism. It is really enlightened self-interest on the part of the US.
There’s an equally important role for American businesses to play. In fact,one of the reasons I decided to come to the Fair Labor Association after leaving government at the end of the Obama Administration was to assess what businesses and other stakeholders can do in terms of leading the push for higher labor standards abroad. It isn’t obvious to people that American businesses would be interested in this. Many of them are, and it is largely because of their critical role in the growth of global supply chains.
American businesses are the lightning rod for criticism when things go wrong abroad. And sometimes that’s well deserved. Many leading American businesses, sometimes with a push from unions, civil society and government, have begun to take it upon themselves to take the lead in addressing these challenges. And, at risk of using a cliché, the reason is not just that it is good for the workers, it is also good for the businesses.
Businesses want to have stable supply chains and they want to know that there are not going to be disruptions in production due to work stoppages or labor rights violations. It is an encouraging development that businesses and other stakeholders are stepping in– including where governments are not interested and there is a need to fill that “governance gap.”
