tuac evaluation



  Texte en français


 May 1998


1. At the Birmingham G8 Summit the host, British Prime Minister Tony Blair, sought to introduce a series of innovations to make the summit discussion more focused and less formal. The Heads of State and Government met alone, without Foreign and Finance Ministers who had met on 8 May, a week earlier in London and reported to the Summit. The agenda was intended to be restricted to three issues:- the lessons of the Asian crisis for the global economy; employment; and international crime. The final communique was ten pages, half the length of previous years' conclusions. A separate G7 (i.e. excluding Russia) Chairman's statement was made primarily on the economic and financial situation. 

2. In practice however the nuclear explosions in India and the social explosion in Indonesia dominated the meeting. These events illustrated both the fault lines in the global economy and the inability of the G8 to agree on a common response. 

3. On the central points of discussion, the Summit:-  - made a statement condemning the Indian government's nuclear tests, but the leaders were split on the issue of sanctions; 

- on the financial crisis in Asia, called for the full implementation of IMF programmes, emphasized sound economic policy, transparency and good governance, the protection of the poor and a resistance of protectionism (§ 4 of the Summit communique); 

- on the World Trade Organisation, called for more "transparency", application of the "built-in agenda", liberalisation in new areas, and the better integration of developing countries (§ 5); 

- on development, agreed with the OECD's goals which include halving world poverty by 2015, but failed to respond to the high profile "Jubilee 2000" campaign of NGO's and trade unions to improve on the current terms of debt relief (§ 7); 

- on sustainable development, focused primarily on climate change and called for the implementation of the Kyoto Protocol's binding targets for greenhouse gas reductions (§ 11); 

- on growth, employability and inclusion, endorsed the "seven principles" of the London G8 Jobs Conference, specifically calling for action in four areas:- measures for hard hit groups; company start-ups; tax and benefits reform; and lifelong learning. For the first time in a full G8 communique, the "involvement of employers and unions" is called for (§ 13-16); 

- on core labour standards and trade, the Summit supported "continued collaboration between the ILO and WTO secretariats" and the proposed ILO declaration and implementation mechanism on core labour standards (§ 17); 

- on international crime, a wide agenda was set out with a range of areas for increased cooperation including high tech crime, a UN Convention on money-laundering, corruption, human trafficking, joint law enforcement, firearms, environmental crime and drugs (§ 18-23).

Key Points for Trade Union Follow-up 

Global Growth 

4. The trade union statement to the Summit called for action to "sustain global growth and support balanced domestic demand" in the light of the deflationary effects of the Asian crisis. The Summit was expected to urge the government of Japan to take new measures to expand its domestic economy in the light of the doubling of its trade surplus and collapse of domestic demand. The events in Indonesia thwarted this and instead the G7 Chairman's statement simply welcomed the existing Japanese government's economic package. The fall of the parity of the Yen following the meeting was a disturbing reaction. For Europe, the communique states that "sound fiscal policies and continuing structural reform" are the key to success. This appears highly complacent and trade unions will need to press vigilantly for growth- orientated policies. 

Asian Financial Crisis 

5. Although the communique has words of concern for the effects of the Asian crisis on the poor, the G8 response in the wake of the Indonesian bloodshed fundamentally misjudges the response. The acts which sparked the social explosion on 14 May in Indonesia were the energy and transport price hikes called for by the IMF. Yet the G8 response to the Asian countries is "the full implementation of programmes agreed with the IMF" (§ 4). 

6. On crisis prevention the communique talks of sound economic policy, transparency and good governance (§ 4). The G8 should have clearly stated that democratic accountability and human rights including trade union rights have to be vigorously promoted if future crises are to be prevented. 

7. The G7 Chairman's statement acknowledges (§ 6) that the Asian crisis has demonstrated "the potential weakness and vulnerabilities in the global financial system". The response however is to encourage the IMF to collect more financial data, to develop a code on financial and monetary policy, to publish more information on countries and to establish a system of multilateral surveillance of financial regulatory systems. These measures, as after the Mexican crisis in 1998, may each be desirable in their own right but fail fundamentally to add up to an adequate response to the crisis. The international trade union movement has called for an International Commission to be established to report on the new financial architecture which is necessary and bring this debate into the public arena. Unions must continue to press for action. 

8. The G7 meeting of Finance Ministers on 8 May also drew attention to the need for a Code on Corporate Governance, being developed in the OECD. This is due to be drawn up in the period up to the end of the year by a high-level group which is to include some trade union representation. TUAC will follow this up closely. 

Debt and Development 

9. The communique's starting point for development is a commitment to the objectives of the OECD's 21st Century Strategy, i.e. the halving of world poverty by 2015. It refers to a range of broad initiatives including the ratification of the OECD Anti-bribery Convention, the development of social infrastructure and OECD work on untying aid. However, it was debt relief that became the issue by which the Summit was to be judged for deeds rather than just words. 

10. "Jubilee 2000" - a coalition of NGO's, including trade unions, calling for a write-off of debt for the world's poorest countries successfully influenced much media coverage of the Summit. The NGO position had been supported in the trade union statement which called on the summit "to improve on and accelerate the implementation of the "Heavily Indebted Poorer Countries" initiative of the IMF and World Bank so as to bring genuine debt relief for the world's poorest countries". In practice, the G8 were unable to agree on improving the initiative. Despite much sympathetic language in the communique, the key passage of the communique (§ 7-5th indent) simply urges countries to make themselves eligible for the existing HIPC initiative. There was no action taken to improve the eligibility criteria as called for by the NGO's. 


11. The Birmingham Summit communique builds on the G8 London Employability Conference held in February. It endorses the "seven principles" of the London Conference (§ 14) on the basis of which National Action Plans were produced. Particular commitments are made (§ 15) on measures to help target groups; entrepreneurship; tax and benefit system; and the promotion of lifelong learning. For the first time in a G8 Heads of Government communique it "underlined the importance of the involvement of employers and unions in securing successful implementation of these Plans" (§ 14). 

12. For trade unions this agenda is to be welcomed, it is one which focuses on "active labour market policies" rather than deregulation and negative flexibility. The emphasis on union involvement is significant and TUAC will be working with affiliates on the question of follow-up to the National Action Plans. These have now been published and should be available from national governments or the TUAC Secretariat. 

Labour Standards and Workers' Rights 

13. The communique makes several general references to the need to spread more widely the benefits of globalisation (§ 1), good governance and civil society (§ 4, 7), respect for basic human rights (§ 8), and social inclusion (§ 13). However, the central paragraph on labour standards is paragraph 17. This renews the G8 Leaders' "support for global progress towards the implementation of internationally recognised core labour standards, including continued collaboration between ILO and WTO secretariats in accordance with the conclusions of the Singapore conference and the proposal for an ILO declaration and implementation mechanism on these labour standards". This should be of support for the establishment of a positive declaration on these rights at the ILO with a strong implementation mechanism. It should also be used to argue for the non-existent cooperation between ILO and WTO secretariats to now begin. It was significant however that the reference to workers' rights was in the section on employment, not the paragraph on the new WTO agenda. The international trade union movement will have to redouble its efforts to get the WTO to address labour standards seriously in the run up to the launch of the "Millennium Round" of  trade negotiations. 


14. Overall the Birmingham Summit was complacent on the immediate growth prospects and provided an inadequate response to the need for an effective reaction to the Asian crisis. There is still a need for an International Commission to be established to report on the new framework that is needed to regulate international financial markets. There is also a need to allow full public debate in this process. The Summit also failed to respond to the need for a more generous approach to debt relief. The G8 did however make progress on establishing a more practical agenda for national plans on employability and significantly called for union involvement in the implementation of these plans. 

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