Highlights from IHRB's Next Generation Trade Event 2019

On 3rd December 2019, as part of events to mark its 10th anniversary during 2019, the Institute for Human Rights and Business (IHRB) hosted a discussion at the Museum of London, Docklands on the future of international trade in an era of rising populism and protectionism.

The conventional wisdom since the end of the Cold War - that increased international trade would contribute to broad based prosperity around the world - is facing severe challenges. Despite significant human development advances globally, many people have not benefited from globalisation. This has resulted in countries retreating into a protectionist mode, in response to anxieties felt by an older workforce losing jobs, stagnant wages, and new technologies looming heavily over the future of work itself. 

IHRB's Next Generation Trade event brought together leading thinkers, decision-makers, practitioners, and those they directly affect, to discuss how to achieve a more principled, people-centred global economy, fit for the 21st century.

To support robust discussion and aid participants' preparations for the event, IHRB prepared a series of briefings for each substantive session:

• Fostering Inclusion
• Confronting the Climate Crisis
• Building the Future of Work
• De-Weaponising Trade
• Righting Data and Technology

Immediately following the event, IHRB also invited the reflections of a series of participants and speakers, which we published in a mini-blog series.

Read on for the highlights from the 2019 Next Generation Trade event

IHRB's John Morrison sets the scene with The Elders' Mary Robinson, WTO Deputy Director-General YF Agah, economist Jomo KS, trade justice activist Ruth Bergan, and IHRB CEO John Morrison

The international trade system is in need of significant reform. How can we strike a better balance in approaches to trade that recognise present economic and geopolitical realities while working to achieve a more sustainable and equitable future – for developing countries, workers, consumers and vulnerable groups – as well as for richer economies?

Key Takeaways:

IHRB's Chief Executive John Morrison opened the event by posing a series of questions:  

• How can trade be more accountable to the people it purports to serve, and how can both government and business be accountable for their impacts?
• How does trade link to technology, climate, the future of work, and relations between North and South, East and West?
• Where do concepts such as inter-generational justice, climate justice and just transition sit within our policy-making?
• With data more valuable to some companies than minerals, how do we protect the human rights of all of those to whom the data refers?
• Will global trade, with automation, only benefit the global few rather than all of us?
• How do we get the balance between workers/consumers/vulnerable groups' rights and sustainability in trade agreements while maintaining economic incentives to sign them?

(Read his full opening remarks here.)

Mary Robinson, Patron and Founding Chair of IHRB, Chair of the Elders, former UN High Commissioner for Human Rights, highlighted the role of trade in lifting countries out of poverty while stressing the need for a cohesive global legal, regulatory and policy framework to adequately address the downsides of trade for workers and communities. She noted that 90% of workers in global supply chains continue to work in dangerous jobs with low wages amidst a slump in wages and the right to assemble. On behalf of the Elders, she called on members of the World Trade Organization to circumvent the US Government's attempts to block the appointment of new judges to its dispute body by appointing appellate judges with a clear majority. The Elders expressed deep concern about the fragility of the multilateral system and the undermining of the WTO .

(Read her full opening remarks here.)

Yonov Frederick Agah, Deputy Director-General of the World Trade Organization, noted that trade policy is still too often considered from the perspective of narrow self-interest instead of the common good. He stressed that WTO rights and obligations must not be seen as aims in themselves, but as a means to realising sustainable development and that requires, for example, strengthening connections between trade policies and strategies to implement the 2030 global development agenda. 

Jomo Kwame Sundaram, former United Nations Assistant Secretary General for Economic Development, highlighted the lack of level playing field in trade 'liberalisation' caused by direct and indirect subsidies and tariff and non-tariff barriers. 

Ruth Bergan, Senior Advisor, at the Trade Justice Movement, questioned how we can have a situation where we are facing a climate crisis, poverty and hunger, and all the agreements in place to deal with those issues are not binding, yet we can have fully binding fully enforceable trade agreements. Why is it more important to protect businesses than the world?

100 million – the number of people who would be lifted out of poverty if LDCs could increase their share of global exports by just 1% (Mary Robinson).

IHRB's Frances House convenes as Mairead Lavery of Export Development Canada, Total's Manoelle Lepoutre, and Law Professor Leïla Choukroune discuss how to create a more equitable trading system.

Trade offers important routes to social and economic empowerment but women, minorities, people living in poverty and other groups continue to face multiple obstacles including discriminatory laws, lack of access to finance and precarious employment. What are the most promising strategies to overcome such challenges so that trade promotes gender equality and fosters greater inclusion and prosperity for all?

Key Takeaways:

Examples provided by Mairead Lavery demonstrate that Export Development Canada (EDC) provides an excellent template for the measures that can be taken to improve inclusion in trade for all parts of the business community. 

EDC has supported women-led businesses and women in international trade. For example, they launched a $50 million fund to invest in women entrepreneurs directly. This fund is also investing in women-owned investment funds, as they usually invest more in women-owned businesses.

150 billion Canadian dollars that could be added to the economy if women entrepreneurs were able to grow (Mairead Lavery).

Manoelle Lepoutre stressed that powerful companies should lead by example, and visibility matters - e.g. Total has increased the number of women on its executive committee from 5% to 25%. 

Leïla Choukroune, Professor of International Law at the University of Portsmouth, said that human rights clauses in new investment/trade deals are usually vague and empty. 

Lessons can be learned from the work done on gender in the last 20 years to inform progress on other issues.  Notwithstanding that women are still highly susceptible to the harmful impacts of trade.

Enforcing the law is important, but this can be problematic for companies listed in a country with a stronger legal framework. Conversely, countries such as China may have weaker human rights protections, but have a strong position when negotiating trade agreements, resulting in language that is vague and terms that are difficult to enforce.  There is a need, she concluded, to have more binding rules.

IIED's Halina Ward convenes ITUC General Secretary Sharan Burrow, Amnesty's Kumi Naidoo, and Aviva's Steve Waygood to discuss climate and trade.

Time is running out. Bold and urgent action on a global scale is needed now to confront the climate crisis. How can trade policies be used to foster more sustainable economies that dramatically reduce carbon emissions and demonstrate due concern for the rights of current and future generations impacted by climate change?

Key Takeaways:

Kumi Naidoo stated starkly that we are all suffering a state of cognitive dissonance - consumption is the elephant in the room. Affluenza is the biggest disease in the world.

Steve Waygood, Chief Responsible Investment Officer at Aviva, recalled that 20 fossil fuel companies are responsible for 33% of all emissions, and 100 are behind 70%. Massive changes could be achieved tomorrow with technology that exists today, but oil companies won’t achieve it because it will impact profits. If these companies won’t transition, we - including investors - have to do something about that. We don’t want these companies to go out of business, they just need to look at their future differently. Everyone in this room has money and can use it. He encouraged institutions to make sure that companies deliver on the Paris Climate Agreement, lobby at COP26, ask where our pensions are invested, and where bank puts our money. 

But Sharan Burrow emphasised that people need to be at the centre of what must be a just transition away from fossil fuels and into other more sustainable sources of energy. And effective remedy is a critical part of that process. There must be binding rules. Human rights, labour rights, and environmental standards must be concrete in terms of trade; if not, the WTO will fail and we won’t have the tools to rebuild our economy. 

We need governments to be more interventionist – she said - to level the playing field. 

Rémy Friedmann of the Swiss FDFA convenes Ikea's Greg Priest, Samsung's Linda Kromjong and Nazma Akter, Bangladeshi trade activist, discuss how trade can best foster decent work opportunities for all.

Global supply chains have helped lift over one billion people out of abject poverty but concerns over the labour rights of workers continue to be at the heart of disputes over international trade. With on-going precarious forms of employment and new technologies raising critical questions about the future of work itself, how can trade best foster decent work opportunities for people around the world?

Key Takeaways:

Nazma Akter, long time campaigner for worker and women's rights, outlined the situation in Bangladesh - which could be described as a fulcrum of the worst elements of globalisation. Living costs are huge, there is little education available, no day care (although most textile workers are women), 80% of the parliament are business people; and businesses are beginning to move to the next low cost location (e.g. Ethiopia where there is no minimum wage), moving exploitation from one country to another. And automation will exacerbate this situation much further. She identified education as the key to pulling Bangladeshi workers out of poverty.

Greg Priest, Head of Social Impact and Human Rights, Inter IKEA Group, stated that companies need to ask themselves what leverage they can bring to bear – not just with governments, but with other companies. All companies need to put demands on their business partners. IHRB's Leadership Group for Responsible Recruitment is a great example of companies coming together to encourage change with collective action.

Linda Kromjong agreed on the importance of working together with other partners – and she highlighted Samsung's collaboration with institutions such as the International Organization for Migration and the Responsible Mining Index.

Nazma pointed out that it is interesting being on a panel with Samsung/IKEA, when the reality on the ground is not always as they describe. “We need to invest in education and in reskilling”, she said. “But in order to create the possibility we need tax justice whereby Mulitnational Enterprises (MNEs) are also paying taxes in the production countries. There should also be greater investment in Small-Medium Enterprises (SMEs) so there are more companies to build the economy.” 

Dewi van de Weerd of the Dutch Government convenes The South Centre's Carlos Correa, China expert Isabel Hilton and MCRB's Vicky Bowman discuss overcoming trade wars, with Dewi van der Weerd.

The backlash against globalisation and the multilateral trading system has fuelled outrage that threatens the architecture of international relations and the system of governance that came into being after World War II. What steps are needed to overcome ongoing trade wars and reform key global economic institutions to make them more effective and accountable to all?

Key Takeaways:

Carlos Correa posited that it is dangerous to assume the US will be a responsible global actor, as this is not a given, and the US fears China is catching up technologically and presenting a supremacy challenge. China has taken millions of people out of poverty but is also causing harm. The problem of poverty and lack of human dignity can only be solved through dialogue.

Vicky Bowman said Myanmar is hoping to benefit from the China-USA situation due to supply chains moving from China to Myanmar. Myanmar wants to end its dependency on China but dependency is going to continue as long as the Rakhine State situation continues.

Isabel Hilton described China as a colonial actor - with its borrow-and-build heavy industry/coal model which is being exported along the Belt & Road Initiative threatening any hopes of climate control. BRI is a development project that has created a lot of debt and has not considered the needs of the host state.

Isabel and Vicky both articulated that challenging a country's human rights record through blanket trade sanctions punishes the workers more than the human rights abusers.  Both agreed that targeted sanctions, such as the US Magnitsky Act, or freezing assets of specific companies, are more effective.

A participant remarked that the US sanctions on Iran are also a prime example of Americans weaponising trade. But the question that echoed was what level of human rights abuses in the China camps comprises the tipping point for the USA or the EU to take action?

IHRB's Salil Tripathi convenes blockchain expert Shona Tatchell, academic Anita Ramasastry, human rights defender Maryam Al Khawaja and Jens Munch Lund-Nielsen discuss the implications of advancing technology.

The expansion of digital trade and growth of new technologies in the global economy have the potential to support countries in achieving sustainable development objectives. But such innovations also pose risks, such as breaches of privacy and data security. How can a human rights perspective be embedded in new technologies and their regulation, so that abuses are mitigated or minimised, while enabling broad-based access? 

Key Takeaways:

Demonstrating the benefits of technology - ie of using digital trade to address social imbalances - Shona Tatchell described Halotrade's method of making access to trade finance conditional on transparency and visibility in supply chains. This automates access to lower-cost finance by using reverse-factoring and invoice discounting. 

Jens Munch Lund-Neilsen stated that 90% of trade documents are still done on paper. The costs of trade facilitation will be significantly reduced by digitalisation, which would also contribute to increased transparency due to improved access to trade data.

Maryam al-Khawaja, a Bahraini human rights activist and defender, is focussed on the potential dangers of technology and data mining. According to the Economist, data is now the world's most valuable commodity. Regulation is great, but accountability is key.

Anita Ramasastry agreed that an opt-in system for sharing of personal data is the preferred model, but is difficult to achieve.  Flipping the switch to saying that our data is ours and not companies’ is a big challenge. Often the companies that have the most scary profiles of us are ones we have not heard of. 

Jens optimistically predicted that new business models may emerge with more options for consent; "you may even get money back for use of your data".

Next Generation Trade is a critical area for human rights and business in the coming decades. The issues of climate and inclusion, of the nature of work and jobs, of data and technology, and of how trade rules are designed and used, will all decide the future and welfare of the world's next generation. IHRB's strategy and programmatic focus will increasingly reflect the important conversations that took place in December 2019 on our 10th anniversary.