Brazil, child labor and the WTO

Louis Proyect lnp3 at
Tue Dec 7 11:36:03 MST 1999

NY Times, December 7, 1999

Clinton Remark on Child Labor Irks Brazil


SAO PAULO, Brazil -- Labor Minister Francisco Dornelles was furious. "Has
the United States resolved all its racial problems?" he asked. "No. But the
country criticizes us without considering its own issues."

The source of the Brazilian official's anger was a little phrase uttered by
President Clinton at the abortive World Trade Organization talks in
Seattle. The president said he wanted to end child labor, giving children a
way "out of the soccer-ball industry in Pakistan, out of the shoe industry
in Brazil, the fireworks industry in Guatemala."

The phrase backfired like much else at Seattle, where ministers failed to
agree on a new round of talks to liberalize trade. In general Clinton meant
to encourage developing countries to keep up their efforts to do away with
child labor.

But as the world's ninth-largest economy, Brazil does not take kindly to
being lumped with Guatemala. And as a developing nation grappling with the
turmoil caused by the forces of globalization, Brazil tends to grow testy
when it feels that its problems are misrepresented by an all-powerful
United States busy handing out lessons.

Brazil had much to gain from success in Seattle. Agreement on agricultural
trade alone could have brought an additional $11 billion in annual export
revenue. The opening of trade in the farm and textile sectors of the
developed world remains a critical issue for countries from Brazil to India.

But the perceived insult came to dominate Brazil's perception of the
Seattle fiasco, a measure of the growing unease in developing countries
over a global system that tends to apply the same economic recipe to
nations at vastly different stages of economic development.

"Clinton made a big error," said Edmar Bacha, a banker and leading
Brazilian economist. "By addressing Brazilian child labor, he wanted to
ease the worries of unions and other interest groups over an invasion of
cheap, labor-intensive goods. In an American election year, that is good
politics. But to Brazilians it looks like a cheap political shot."

Sensitivity here is particularly acute because the last decade of economic
liberalization has been so tumultuous.

The country as a whole has secured huge benefits from opening to the world,
including a privatized phone system that works, access to imported goods,
more efficient industries and a booming Internet business.

But the price in a country of 165 million people always marked by a glaring
abyss between rich and poor has been onerous. In the Sao Paulo area alone,
unemployment has doubled in recent years to nearly 20 percent as businesses
have closed, moved or merged in the face of global competition.

Brazil has been battered by what some critics here call "motel capitalism,"
characterized by money that is always on the move. Although it has
recovered from the financial crisis of two years ago, the country still has
growth that is too sluggish for a swelling population, and interest rates
that are too high for all but the wealthy, who can prosper by depositing
their cash.

High unemployment in the developed world does not often mean desperation,
since social insurance acts as a buffer. But in developing nations, high
unemployment may push the very children of whom Clinton spoke into the
streets to shore up a family's income.

"We have at least 3,500 children living in the streets today," said Celso
Pitta, the mayor of Sao Paulo. "We are trying in various ways to help, but
economic conditions are against us. And the easiest, cheapest business for
these kids is drugs," often crack.

Violence has also soared in Sao Paulo, Brazil's industrial capital. More
than 4,000 people have been murdered here this year, many of them
adolescents killed in shootouts over territory in the drug trade.

"You only have to look at the fortresses of the bourgeoisie surrounded by
growing walls of barbed wire," said Raimundo Bonfim, a social worker, "and
the city's spreading slums, where drugs are a means to survive, to see that
what is needed is a mass movement to change the global economic model."

While those who govern developing countries regard Clinton's sentiments
about worker rights and child labor as worthy, they are not convinced that
the United States understands the problems.

They wonder whether granting those rights might destroy the competitive
advantage they need for development and whether the West is prepared to
provide the billions of dollars needed to eradicate the poverty that lies
behind child labor.

The Brazilian shoe industry, an important exporter to the United States, on
Monday described President Clinton's remark as a lamentable mistake. Nestor
de Paula, the president of one of the main associations of shoe
manufacturers, said, "Our opposition to child labor in the shoe industry is
widely known."

In fact, the industry -- buffeted by globalization and the loss of
thousands of jobs -- has made huge progress in recent years toward
eliminating child labor. In Franca, the main production center in the state
of Sao Paulo, child labor has been eliminated, and it is fast disappearing
elsewhere, U.N. studies show.

The bulk of the more than 700,000 children aged 7 to 14 at work in Brazil
are now employed in the coal industry in rural areas and in various
informal jobs in the underground or criminal economy of big cities.

"If Mr. Clinton had been well informed, he would have condemned the use of
children in the coal business and the criminals who exploit children,"
commented Klaus Kleber in Gazeta Mercantil, Brazil's leading business
paper. "But it so happens that Brazil does not export coal to the United
States, or street children."

That sentiment reflects the widespread view in Brazil and in countries like
India that behind the pious sentiments of the United States lie
down-to-earth political and economic considerations.

"When the United States no longer knows how to protect its industry, it
turns to social issues," said Francisco Renan Proenca, the president of the
industrial federation of Rio Grande de Sul, a state where the shoe industry
is large. Dornelles, the labor minister, said, "The United States is open
in its language but closed in practice."

Such suspicions feed the growing conviction that behind the seemingly
neutral terms of "globalization" and "free trade" lies a calibrated
calculation by Washington of its own interest.

Brazilians have responded by trying to attack what they see as
inconsistencies in U.S. trade policy, including barriers to Brazilian
orange juice and sugar. But the unease seems broader. "Most Brazilians
favor globalization," Bacha said, "but not at the price of subordination."

Louis Proyect

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