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CNN Saturday Morning News

Are Concerns Over Globalization Justified?

Aired July 21, 2001 - 09:16   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
BRIAN NELSON, CNN ANCHOR: The protesters are marching under different banners, but the greatest concerns may be about globalization, that is, nations eliminating or at least reducing trade barriers in their countries.

We have two guests now joining us to discuss globalization. Aaron Lukas, a policy analyst with the Cato Institute Center for Trade Policy Studies, he favors globalization. And our other guest does not, Thea Lee is the chief international economist for the AFL-CIO.

Both of you, thank you for being with us this morning.

I don't know if you've seen the pictures, but I want to go back to them right now for your benefit and for the benefit of our viewers. We have a massive display of police power on the streets of Genoa, Italy, right now, and an assortment of different groups protesting the G8 summit and the globalization trade process -- protests -- I'm sorry, policies.

So to Thea Lee, I want to ask you, as a representative of labor, what is labor's beef against globalization? Many people say it creates jobs.

THEA LEE, AFL-CIO INTERNATIONAL ECONOMIST: Well, I don't think most people in the labor movement are opposed to globalization, opposed to trade or investment. What we're saying is that we need a whole different set of rules, and we need institutions that are more democratic and accountable as we carry out the trade and investment policies, that we think trade policies ought to protect workers' rights, the environment, human rights, that we ought to be using the leverage of our trade policies to ensure that other countries can put in place policies that protect workers and protect fundamental human rights.

NELSON: Tell me, what is -- what about workers is at stake? What's at risk for workers because of globalization?

LEE: Well, workers all over the world are struggling for decent jobs and for dignity at the workplace, and they're finding that the pressures of globalization sometimes make it more difficult for them to achieve those goals. We see that even as globalization has increased, as economic -- as trade and investment have increased, we've seen increasing poverty, increasing inequality, and increasing repression of workers' rights around the world. Workers are struggling in every country to build unions that can represent them fairly at the workplace and to represent their voices through the political system.

NELSON: OK, Aaron Lukas, you've just heard Ms. Lee describe her feelings about this. There is a feeling that globalization by some is a fig leaf for exploitation of workers. That is, you can take a company, you can take the jobs it offers and move it around and leave countries and their workers hostage to whatever policies you as a company, a multinational, want to enforce.

Is -- what's your response to that, first of all? Is that the case?

AARON LUKAS, CATO INSTITUTE: Well, no, absolutely not. I think there's a real myth that's been perpetrated by the anti-globalization forces, and that is that this process of economic opening and the process of expanding economic freedom that's been going on around the world is somehow a creation of the G8 countries, that they're enforcing this on the poorer nations of the world.

And in fact, that's not true. Globalization is a process that's been going on for more than two decades now, and it's a curve, because the poorest nations in the world have realized that their old strategy of state-dominated economies, of protectionism, of trying to use import substitution methods to build up their domestic economies, absolutely failed. It failed in absolute terms in that millions of their people remained mired in poverty, and it failed relative to those nations that decided to open up to the global economy.

NELSON: What -- what about...

LUKAS: And indeed, if you look anywhere in the world, those countries that are most open to international trade and investment are those countries that have the strongest labor rights protections, they have the strongest environmental protections, and where living standards are increasing.

NELSON: Well, what about Ms. Lee's contention that globalization and multinationals do not protect workers' rights? After all, when -- Nike is the famous case. I mean, it's the poster child of child -- bad child labor practices.

LUKAS: Well, there's this great theory that sounds very nice called the race to the bottom, whereby those countries that maintain very low labor standards, very low environmental standards, will attract foreign investment from the United States, from Western Europe, and from the developed countries.

But if -- in fact, if you look at the data, the vast majority of foreign direct investment goes to those countries that have higher labor standards and protections, and indeed, the increase in protection of labor's rights, better environmental standards, tend to go hand in hand with those countries that open up their economies to global trading investment.

So it's simply not true that what we see is globalization driving down standards, and there's no evidence that that's happening.

NELSON: So Ms. Lee, is this the -- is this the case, then, that it's actually countries not protecting their workers, rather than multinationals exploiting them that is at the heart of this problem?

LEE: It's a combination of both. And I don't think it's all true what Aaron has said, that countries that always open up to trade have better labor standards. A country like China, for example, which is very open to trade and investment, has been a major player in the global economy, does not allow independent trade unions to exist. In a country of 1.3 billion people, our State Department reported last year, not a single person is able to form an independent trade union. There's violent repression of workers who try to do that, and the environmental policies have been terrible.

I think the point that we're making is not so much that globalization inevitably drives down standards, but that unless we put in place minimum rules, a framework of rules that will let -- that tell countries and corporations what are the rules of the game, then we will see abuse of workers and degradation of the environment and bad behavior by some companies and by some governments.

And what we want to do is create a framework of rules that allows countries to compete with each other for foreign investment, for market share, on the basis of protecting workers, educating workers, training workers, putting in place modern infrastructure, instead of competing with each other by offering up the most exploitable, vulnerable workplace and the most degradable environment.

NELSON: Aaron Lukas, I want to ask you something. We've seen these demonstrations take place in Sweden just a couple of weeks ago, we've seen it throughout just about every major international meeting lately. Why isn't the message getting through to the world leaders that at least something has to be done, and this issue has to be addressed in a meaningful way?

LUKAS: Well, I think this is a very important question. Everyone always asks, How seriously should these protests be taken? But I think the answer is, very seriously, but really in the same way that one should take it seriously when mice invade your kitchen. The protesters have proven that they're really not interested in democratic dialogue. They're not interested in the democratic process. They like to -- they want to shut down dissent.

And granted, not everyone is violent there. But both the violent and the nonviolent protesters share a common goal, and that is to deny the democratically elected representatives of the people the right to conduct the people's business.

And I think that the violence that we're seeing in Genoa, and I've attended many of these meetings, and it's the same situation everywhere, it seems to be a bit worse here, it's just showing that we really ought not take these protesters too seriously. They're a serious security threat, but they don't really have anything serious to offer to the debate about globalization.

NELSON: Final question to Thea Lee. Is that the case? And do you support those demonstrations?

LEE: Well, certainly the peaceful demonstrations have a right to be there, and they should be taken very seriously. When you see tens of thousands of peaceful protesters out on the street representing very serious organizations, human rights, workers' rights, labor unions, environmental groups, religious people, I think the governments need to take that seriously.

And I think we need to understand in a democracy, people have many different ways of expressing their views. One is through electing their leaders, and another might be through street demonstrations when they really feel moved that the current policies are going in the wrong direction.

NELSON: I want to thank you both for taking the time to talk to us. Thea Lee from the AFL-CIO and Aaron Lukas from the Cato Institute, appreciate you sharing your insights this morning.

LEE: Thank you.

LUKAS: Thank you.

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