Press release - Thursday 26 May 2005

ILO-EC FORUM IN TURIN

SOCIAL AND EMPLOYMENT DIMENSIONS OF AN OPEN TRADING REGIME

TURIN (ILO News) - Faced with a growing gap between output and employment growth that has left many of the world's three billion workers with only the "crumbs" of globalization, top officials of the International Labour Office (ILO) and the European Commission meet here this week to explore new ways of giving the global workforce better access to the benefits of international trade.

Juan Somavia, Director-General of the ILO, Peter Mandelson, the Commissioner for External Trade of the European Commission, and J.K. Adda, the Minister of Manpower, Youth and Employment of Ghana, are among the key speakers at the forum on the social and employment dimensions of an open trading regime taking place on 26-27 May at the Centro Congressi Lingotto at the Turin Center, via Nizza, Turin (Italy).

The forum meets against the backdrop of a growing divide between employment and output growth. In 2004, relatively robust growth in global output of 5 per cent far outstripped employment growth of 1.7 per cent, confirming a declining ratio of employment growth to output growth over the past decade. While global output and the labour force grew by 55 per cent and 24 per cent respectively between 1991 and 2005, employment rose by only 22.8 per cent. As a result, recorded unemployment increased by 45 per cent and the long running trend towards increased informal economy employment continued.

"Most people are either totally disconnected from the engines of globalization or are picking up the crumbs of the recent expansion in international trade and investment", says Mr. Somavia. "We need a policy package in the economic, social and environmental field that maximizes the benefits of increased trade, minimizes the costs and ensures that we share the burden and the dividends of international integration fairly, within and between nations."

The impact of trade openness on opportunities for decent employment is of particular significance in developing countries, where social protection systems are weak. For example, most of the world's three billion workers live in rural areas and work in the informal economy where such benefits are nearly non-existent.

The forum and the subsequent discussions between the ILO, its Training Centre in Turin and the EC are aimed at exploring how the benefits of globalization and open trade can be maximized in line with the ILO's Decent Work Agenda.

One of the fundamental points to be addressed will be the need for investment and capacity-building in support of the effective national economic and social policies and institutions, in areas such as assessment of the impact of trade policies on employment and working conditions, increasing the employment intensity of growth, and adjustment to change through active labour market policies. Without such measures, the weakest and the poorest are at risk of being left at the margins of globalization.

As highlighted by the report of the World Commission on the Social Dimension of Globalization (February 2004), and expressed in wide-ranging consultations held at national, regional and global levels, a common opinion was that, while favouring more trade openness and interconnections between societies, the current globalization process has not produced beneficial, legitimate and fair outcomes for all. In particular, there was a widespread perception that the logic of the current trade regime was not generating the expected outcomes and required more focus on job creation, higher incomes and better working conditions.

In this framework, the EC has stated its readiness to strengthen the social dimension of its trade policy with a view to actively contributing to the follow-up to the World Commission's recommendations and proposals and exploring and discussing cooperation in relevant areas between the ILO and the European Commission.

EU Trade Commissioner Peter Mandelson said: "Trade policy is not a substitute for social policy, but handled properly, multilateral trade liberalisation can foster long-term economic growth, combat poverty and raise living and working standards. The purpose of progressive trade liberalisation is to create greater well-being and better lives for people around the world. The European Commission and the ILO have formed a partnership to gauge the impact of trade liberalisation on social and labour standards. Through our preferential trade agreements and impact assessments for trade negotiations the Commission works to ensure trade and social policy go hand in hand."

But how in practice should and can Europe's trade policies work to help the poor? Answering this question requires a new model of how trade and aid can work together for successful development. The purpose of the meeting in Turin is to pool the knowledge and experience of the ILO and the EC and of other experts. It is an opportunity to take stock of existing efforts to address and further strengthen the social dimensions of international economic integration, and identify areas of technical cooperation between the EC and the ILO on ways to ensure greater policy coherence in the areas of social, employment and trade policy. Among the participants: officials and experts from the EC (Directorates General for Trade, Employment, Development, External Relations, and EuropeAid), officials and experts from ILO technical units and the ILO Turin Centre, social partners, selected resource persons from other international organizations and academic institutions.