TUAC - TRADE UNION ADVISORY COMMITTEE TO THE OECD

12/04/2013

Oslo 8 April 2013

In preparation for the upcoming OECD Ministerial Council Meeting (MCM), a TUAC delegation led by TUAC Vice President Marc Leemans met for consultations in Oslo on the 8 April with the Norwegian MCM Chair (Norway’s Finance Minister Sigbjørn Johnsen) and OECD Secretary-General Angel Gurría and other OECD leadership. Together with the Business and Industry Advisory Committee (BIAC), TUAC had the opportunity to make their voices heard in regards to the agenda and the likely messages that will appear when the MCM meets at the end of May.

Erosion of Trust

TUAC supported the meeting focussing on the theme of Restoring Confidence, Growth and Jobs. There was overarching agreement that the MCM is taking place at an especially dangerous economic and political moment in a climate of broken trust amongst significant parts of the population vis-à-vis politicians, business, banks and institutions. TUAC representatives argued that a change of course of prevailing policies is needed. The New Approaches to Economic Challenges (NAEC) project was seen as having strong potential to shift national policies and the OECD’s own policy recommendations to regain public trust. Creating quality employment was seen as a key driver to breaking out of the current malaise.

Break Away from Austerity

In economic terms, the delegation’s main message to the Chair and the OECD was to shift from the language and actions of austerity that is killing growth, further exacerbating public deficits and debt and suppressing consumer confidence. Instead, the MCM should push for support of aggregate demand using all policy levers, most urgently in Europe. This would also help the employment prospects of the young, who are suffering enormously from the crisis. A lost generation is emerging among stalled growth and falling employment perspectives. Strong labour market institutions, productive investments and skills promotion must thus be at the core of recovery efforts, as time is running out.

Rising Inequality

Meanwhile, rising inequality in incomes that the OECD reports since 2008 have drawn attention to is now a major economic concern. Labour market institutions such as collective bargaining, strong unions and well set wage floors are keys to reducing inequality. Yet, policy recommendations on structural reform coming from some of the most influential intergovernmental organisations continue to seek to weaken them. This paradox has to be resolved. In this respect, restoring fairness to the tax system is a key priority. TUAC therefore fully supports the OECD’s Base Erosion and Profit Shifting (BEPS) project.

Global Value Chains and Development

During the consultations, it has been pointed out that the OECD analysis on GVCs shows that trade has now become an investment issue. The delegates underlined that what is missing is a focus on the social aspects of global production networks, as well as corresponding policies and instruments to improve social conditions in advanced, emerging and developing economies. This requires, amongst many policy responses, a more comprehensive enforcement of the OECD Guidelines for Multinational Enterprises.

TUAC also touched upon the OECD’s accession prospects of Columbia. Delegates insisted that a monitoring process should be put in place before the country can join the OECD to ensure policy initiatives against widespread assassinations of trade unionists.

Next Steps

A TUAC delegation led by TUAC President Rich Trumka will be raising these issues at the OECD Ministerial Council and Forum meetings from 28-30 May.