Labor leaders from developing countries argue against cuts in industrial tariffs

7 March, 2007

GENEVA: Labor leaders from Brazil, India, South Africa and eight other developing countries joined together formally for the first time Thursday to fight demands by rich countries in global trade talks for sweeping cuts in industrial tariffs.

The union leaders, who wrap up three days of meetings Friday in Geneva with chief trade negotiators and the WTO director general, Pascal Lamy, said their new umbrella group was intended to put pressure on their own capitals as well to try to avoid job losses.

The labor leaders fear that in the horse-trading to get a package trade deal, their governments might agree to swap deeper cuts in duties on industrial goods for deeper cuts in farm subsidies and agricultural tariffs by the United States and the European Union.

"We're quite worried that they might take subsidy cuts by the U.S. and the EU in exchange for more cuts in industrial tariffs," said Rudi Dicks, a coordinator of the Congress of South African Trade Unions.

He said that with the current South African unemployment rate of 26 percent, a trade deal that resulted in steep cuts in industrial tariffs would pose major risks in many sectors, including chemicals, motor vehicles and parts, and clothing.

Kjeld Jacobsen, president of the Brazilian Social Observatory Institute, said there is "strong pressure on the government from the agri-business side to open up industry to trade-off something for them in agriculture."

But Jacobsen, who is also an advisor to CUT, a Brazilian labor federation, said that the number of jobs that would be created from a big farm deal could not match in quality and in quantity the number that could be lost in manufacturing.

He said up to two million manufacturing jobs are at risk if Brazil agrees to big industrial tariff reductions, sought by Washington and Brussels.

However, some trade economists argue that the lowering of industrial duties in the past six decades has helped spur global growth. They also note that the benefits, which sometimes are hard to quantify in terms of job creation, overshadow the losses.

The talks on liberalizing global trade collapsed last July because of farm trade disputes, but resumed in late January.