Is globalisation stealing EU jobs?

In 2002 the International Labour Organisation (ILO) set up a World Commission to report into the social dimension of globalisation. The  report , published in 2004, concluded that, "Seen through the eyes of the vast majority of men and women around the world, globalisation has not met their simple aspiration for decent jobs, livelihoods and a better future for their children".

Speaking to an ILO Forum in May 2005, Trade Commissioner Mandelson said that in the light of the continuing growth in competition from China, India and South America, "Europe is faced with a fundamental choice of directions." He continues, "One way is to take the line of least resistance and to bow to the populism either of the Left that rejects globalisation or the populism of the Right that blames foreigners for everything. But this is a cul-de-sac, because by putting up barriers between ourselves and world markets, we may save jobs in the short term but at the cost of our industries becoming globally uncompetitive in the longer term. The only alternative is the difficult and painful tasks of reform and modernisation."

Launching the European Globalisation Adjustment Fund, Commission President Barroso said, "The fund will express the Union’s solidarity towards those severely and personally affected by trade-adjustment redundancies. In this way, it will provide a stimulus to respond appropriately and effectively to the adverse impact of market opening. The fund will help workers made redundant back to work because we want a competitive, but also a fair EU."

Pascal Lamy, head of the World Trade Organisation is firmly in favour of the open and free markets that accompany globalisation. Speaking in November 2005, he said, "Multilateral rules fostering open trade are virtuous, and exceptions to those rules, much as they might be needed for political conveniences at certain moments in time, should remain what they are — exceptions, not rules — and that the multilateral community should strive to overcome them."

Oxfam International, however, argues that "rich countries and powerful corporations have captured a disproportionate share of the benefits of trade, while developing countries and poor men and women have been left behind or made worse off. World trade rules have been developed by the rich and powerful on the basis of their narrow commercial interests. Governments and companies who preach the virtues of free trade the loudest are the most guilty of practising protectionism when it suits them."

André Sapir, from the Brussels think tank Bruegel, argues in a policy brief that Europe’s current labour market and labour laws have become dysfunctional in a global market. "As recently as 1970, the share of developing countries in developed countries imports of manufactured products was barely 10%. Today, their share is over 45%," he says. In his view, Europe faces the choice of "reforming national labour market and social policies or continuing to hinder change."

ETUC, the European trade union group considers that the effects of globalisation should be managed so that it delivers its proper benefits without eroding the rights of workers. It has urged the EU and governments to ensure that workers are assured adequate job protection, proper consultation, access to retraining and sufficient unemployment benefits.

ETUC welcomed the Commission’s EGF initiative but wants more consultation with social partners on how the fund is used.