75508 cornell 2 May... · 75508_cornell 2 Moderator, Bruce Rainer, Daniel Fibiger, Sonia Mistry, Sharon Waxman, ... challenges about labor, and challengesabout safety, and all other

75508_cornell 2 Moderator, Bruce Rainer, Daniel Fibiger, Sonia Mistry, Sharon Waxman, Rick Darling,

Shawn Islam, Ian Spaulding, Tammy Rodriquez, Jane Hwang, Attendee 1-11

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Moderator: Go afternoon, everyone. As we all settle back into our seats for what I think is gonna be live — hello. Can you hear me? Hi, if we can get people to sit down, that would be great. I know you haven’t had a lot of time to talk today, but we’ll have some opportunities to be engaged in the next three sessions. I hope everyone can get to your seat. If you’re one of the panelists on the next panel, come up front so we can get you mic’d. I just want to take a pause for one moment. People might wonder. Where are we? What is this place, the Prince George Ballroom?

I want to just explain the Prince George Ballroom. It actually is an old, old hotel that over the years fell apart, was a homeless shelter for a while, and then was recreated in a sense by what’s called Breaking Grounds, and Breaking Grounds recreated this place restoring it so that it could be used by the community and by the public for weddings, for celebrations, for learning, for all kinds of things. All of the proceeds go to the Housing Development and Outreach programs for homeless and other vulnerable New Yorkers. So while you’re here, you’re actually doing good work by supporting the homeless and the need for housing development. So I just wanted to have you understand why we were in this wonderful space. So this morning we learned a lot. I know I learned a lot. We heard a lot of data. We heard people ask hard questions. We heard a lot of presentations. This afternoon is going to be a little bit different. Just to remind you, these discussions are inside these walls. It’s the Chatham House rules, which means if you want to share anything that you want to say, that’s fine. If you want to share anything that anyone else said, you need to get their approval and permission. Otherwise, it stays in here, because we see this as learning, exploring, challenging ourselves, and to think outside the box, and to think creatively about how to solve some really tough problems that have been going on for centuries, even though it’s in the developing world. In the supplying world we might talk about the last 30 years, challenges about labor, and challenges about safety, and all other things that have bene going on for forever. I now want to turn it over to Bruce Rainer, who’s going to lead a panel discussion on workers and supplier country governments, and how can we create worker voice in hostile governmental settings, and how do we

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change those settings so they are less hostile. Bruce: So let me say a few words of introduction and introduce the panel.

We have Daniel Fibiger, who is the Director of Global Sustainability for the GAP; Judy Gearhart, who is the Executive Director for the International Labor Rights Forum and a long time for global labor rights; Sonia Mistry, who’s the Senior Program Officer at the AFL-SIO Solidarity Center; and Sharon Waxman, who’s the President of the FLA, Fair Labor Association.

The subject is a relatively easy one. How do you help millions of workers organize around the world? It shouldn’t take us more than an hour and fifteen minutes to figure all that out. The idea of how you give workers a voice has been something I’ve probably spent most of my life trying to do and figure out how to do. I was thinking of the prior discussion that we had this morning, and I just wanted to set a little context for a couple points. Before we condemn all the difficulties — which I think are worth condemning — that workers in countries like Bangladesh or other undeveloped countries face in organizing and having a real independent voice at the workplace, I think we’ve got to take the context that in the United States factory workers don’t have the right to organize. We have a legal right, but in practice it’s virtually impossible for a factory worker in America to organize in 2017, unless the company is willing to let you do it. That is a fact, because of a lot of forces that I could explain if you care to get a little seminar on the complaints on organized labor in America. You could understand it if you don’t already. Having said that, the other thing is that in more and more countries, the rights of workers to organize — not just underdeveloped countries — are becoming more difficult with few exceptions. I suppose Canada’s probably the exception. I think we have a Canadian here, which is my favorite country. Other than that, whether you go to Australia, Europe, the unions are struggling how to organize in developed countries. I’m not saying the conditions are the same in countries like Bangladesh. The simple notion that we’ve got to figure out, that they ought to have these rights, I think they should, but the fact is less and less in the world the workers have those rights. Secondly, we’ve all struggled with finding ways other than collective bargaining for workers to have a voice on the job. We





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probably don’t have total agreement in this room on this issue, but I would say that the movement in the retail industry for auditing, which started in the 80s, I thought and hoped it would die in the 90s. It didn’t die. It’s still somewhat alive, but the fact is that I think it’s at least mostly discredited now, the notion that some outside inspector can come in and ensure the conditions in these factories are gonna be decent for workers, whether it’s about safety or how they’re treated. So some way or another we’ve got to solve the problem of workers getting a voice, and the other thing I would say — again, having spent my life in the labor movement — is that the union movement itself, whether it’s in Bangladesh, or the United States, or Europe — is by no means perfect or without much of the blame for the problem as well. Here, I would probably lose some of my fellow union people, but the fact is we’ve heard about the lack of training of union leaders in underdeveloped countries, which no doubt exists in a tremendous lack, inadequate effort by organized labor to train leaders of unions how to run a union and function in worker representation, but also disunity, corruption, and unions tying ourselves in many countries to political parties, and forgetting about the mission of actually representing workers and workers’ interests on the job. You don’t have to go to Bangladesh to find it. Get the three Italian federations together, and they don’t agree on what time it is when you’re discussing bargaining with a particular employer. So it’s a problem on the labor side as well in figuring out how to function as worker representatives. So what we’re going to talk about today in this panel is to try a little different approach. I’m going to raise a couple of question, and then go down the panel, and ask each of the panelists to say what they want to about those. We’ll have some interchange. The first is, “After all the year’s of efforts to improve labor standards in the global supply chain, what are you most encouraged about, and what are you most disappointed about?” I think the most appropriate person when I end with disappointment is Judy.

Judy: So it’s interesting, because I got these questions about two minutes

ago, but fortunately the comments that I put together already follow your series of questions. I want to start with a positive. I don’t want to disappoint you, Bruce, but I’m going to start with a





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positive. We’ve come a long way. I got into this work in 1992 living in Mexico working with Maquiladora workers at a time when we were campaigning against Levi Strauss to try and get them to hold the factories they actually owned back in the day to be accountable to workers’ rights. When I got to SAI in 1997, I was so excited. There were brands, and people who were actually trying to translate ILO conventions into obligations for factory managers.

At the time, though, the majority of the codes of conduct were not

mentioning freedom of association and collective bargaining. The ILO’s study that came out in 1998 showed 15 percent of codes of conduct actually mentioned freedom of association, collective bargaining, and I have to mention the US Department of Labor’s study that was done on codes under Andy Samite’s time, which had this great quote from the Sura Li code of conduct that said, “We firmly support a union free environment.” Now here are, and we’re all talking about, of course, it’s gotta be about worker voice. It’s gotta be about freedom of association and collective bargaining.

Let’s just a take moment and say we’ve come a long way, but I am

gonna agree with Bruce. It’s not enough. It’s nowhere near enough. We’ve plateaued. We need to go further. We need to hit reset. So I’m positive, but where am I disappointed? Here, Bruce, if you’ll allow me a little bit. I’m not even sure how to juxtapose with your questions, but I think within the how do we hit reset moment we need to think about how we got here. How did we conceptualize supply chain compliance initiatives to begin with? For the most part we’ve been looking for all these years at what are the factories supposed to be doing, how are they supposed to be respecting workers rights, and what are the brands willing to do.

This is not just on the brands. This is also on the human rights community. We’ve been conceptualizing this from a top down perspective, a global top down perspective. If we want to talk about worker voices and perspectives, I think we need to turn this a little bit on its head and think from their perspective. There I would get into why are we not able to ensure worker voices in supply chain compliance initiatives. I’ll argue that there are a three structural flaws to most supply chain initiatives. They’re confidential. They’re voluntary, and workers don’t have a meaningful role, and lots of good people — I





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think including myself — have spent a lot of time trying to figure out how do we give workers more voice in these initiatives, but again because we’re always coming at it from this brand, global, industry, top down perspective, we’re not really listening to workers. I think Trump’s totally right. Wages have a lot to do with it. ILRF did a study two years after Ronda Plaza called Our Voices Are Safety where we interviewed in-depth, very long form interviews with 70 workers. They said, “We see the improvements in our factories, but we’re not able to speak up. We’re living hand to mouth, and if we speak up we could lose our job, or if we talk to that auditor this factory might close.” There’s this tremendous fear factor, and we can talk about living wages, but you interview the workers they’ll say, “Okay, but when the wages go up, the rent goes up.” There’s no rent stabilization. There’s no urban planning. There’s no safety on the street. They’ll pretty much say, even the guys will say, “Women workers who organize are targeted, and women who are trying to walk home at night in unsafe communities and unlit streets are bullied.” If you start from their perspective, how do you start to solve their problems and their ability to speak up, access to legal, the fact that the labor laws aren’t protected? Now that I’m giving you all a pass and saying we just have to work on government enforcement. I think the brands and the industry can do a lot. I think we’ve talked already about some of these solutions, and I feel like I should stop there. If I go onto the solutions, that’s one of your questions later that I get to come back to.

Daniel: I’m going to try to confine my response from the vantage point

from which I sit, which is obviously within a massive apparel brand and retailer. I’ll start with the negative, and it’s very short, and it’s very simple. It’s that we haven’t seen a consumer movement that is pushing the companies as hard as the labor rights groups push us. I don’t know what the right mix is that will get consumers to care about this more. I think we’ve seen pockets of research that indicate that they do care if they’re given a choice of paying a nominal fee on top of an established price.

We did this study with this guy at Harvard, Mike Kiscocks, and he

showed that consumers in Banana Republic Factory stories were willing to pay a tiny bit more in some instances, but not enough to prove the ultimate theory. That we haven’t seen a movement of





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consumers care about this as much as they should to this day remains disappointing to me.

The pocket of hope — again, only wearing my company hat — is

that I feel like there is widespread acknowledgment that auditing is insufficient. I don’t fall into the camp that thinks compliance and auditing is a dirty word. I feel like it can be unfortunate if we just lazily say, “Oh, auditing doesn’t work.” It doesn’t work for everything. It does work for some things, and I think we need to have targeted discussion about what it does address and what it doesn’t address, but there’s not that widespread institutional recognition within companies that auditing on its own is not going to solve everything.

With our experience at GAP, we now have a lot more resources to invest in projects that don’t have proof of concept. We now have the political leash from the top to try to do new interesting projects with strange Fed fellows, with labor organizations that maybe publicly don’t like us but privately are willing with us to try to address industry wide issues that are related to social dialogue and industrial relations. I can give some examples of that, but I feel what we first needed was this reckoning of saying, “Okay, auditing works for this but not for that.” When we actually get to the harder issues of freedom of association, industrial relations, and actual social dialogue, we need a completely different set of tools to bring the promise of those ideals into reality. Not to say that the things that we’re trying are gonna work, but I think it all starts with recognizing what hasn’t. Also, what I appreciate about this conversation is that we’re trying to ground it on data, and that I’m allowed to stand on the stage next to Judy, and we can have this conversation, because I think for too long we haven’t spoken either privately or publicly. This event is long overdue. And I used to work at Judy’s organization.

Sonia: So just in terms of disappointments, I will just reiterate the ones

that Bruce and Judy have already mentioned: the roll back of enforceable labor rights globally has been a huge disappointment. The proliferation of voluntary, ad hoc projects or pilot initiatives in piecemeal has been a real disappointment, but I think where there’s real hope is this renewed focus on supply chains, and not just looking country to country but really looking at entire supply





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chains, that the human and business rights community is actually looking at labor rights as a fundamental component of looking at the promotion of human rights globally is very hopeful to me.

Looking at enforceable and binding agreements in every form,

whether you’re talking about collective bargaining agreements in the workplace, or enforceable and binding agreements like the Accord, which is a model that can be expanded to look at issues of freedom of association, global framework agreement, there are many different models of enforceable agreements that are being looked at, and I think that that’s very hopeful. Another thing that I think the case of Bangladesh highlights is the value of multi-stakeholder engagement. I do not remember a time since I’ve been working on labor rights issues where the US government has been as focused, just the issue of labor rights as an important issue by itself, not tied to 18 other things, but just the issue of labor rights.

That has been amazing to me, because there’s been a great deal of

diplomacy that’s been used a tool to open up space for worker organizing. The brand has been engaging. That NGOs, and unions, and other worker rights have been engaging with all of these other stakeholders has really created space where workers have been able to actually try to exercise their rights to organize, and the statistic that was raised earlier about only two percent of workers in the Bangladesh are organized — it’s only 90,000 workers — but when we’re looking at what that means, 90,000 workers getting organized is not a small number when you’re looking at the fact that they only really started organizing in a meaningful way at the end of 2012.

So we’re not talking about that many years, and we’re talking

about a union movement that has had virtually no experience in organizing. We’re talking about really young workers who have learned to stand up for their rights, and organize in factors where there’s been extreme repression, and in a country where their rights are actually not protected by the government. So that also gives me hope. Despite this repressive environment, workers have taken all of the risks to organize, and 90,000 workers is a big number, and it should be higher, because it shouldn’t be this harder, but just that worker organizing has given me a lot of hope.

Bruce: Sharon? Sharon: Thanks. I want to just state what I think is obvious, but in terms of





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my biggest disappointment, my organization was founded years ago at a time when there was a recognition that governments were either unwilling or unable to address a lot of the labor challenges in the supply chain. For me the biggest disappointment is that 15 or so years later governments are still for the most part unwilling or unable to enact and enforce good laws and good programs. For me that this is the biggest disappointment.

I think in my own work at the Fair Labor Association, we do see some improvements on issues. This is tier one. In child labor, forced labor we’re not seeing as many of those challenges in our assessments in the first tier. I don’t want to declare victory, because I think a lot of those problems have been pushed further down the supply chain, but there is still — this is the disappointment — an enormous challenges with wages, hours of work, and resourcing practices. What we have seen in the last five or six years is an increase in the hours of work that people are working across the globe. We have seen a failure of wages to increase in an appropriate way. If you look at Bangladesh, for example, we did a study based on a year’s worth of our data in factories, and wages in Bangladesh were dead last in terms of purchasing power parity. People in Bangladesh are maybe earning minimum wage or below earning minimum wage. If you look at the World Bank poverty line, they’re still not at poverty levels, and even if they are at poverty levels, they’re not able to buy enough material to meet their basic needs. So I’d say that is a huge disappointment. I think another disappointment for me is on the one hand it’s great that there is an increased investor focus on ESG overall. I think that’s a great trend, and I do hope that will drive some changes, but the disappointment is that the E and S are so often lumped together and that we’re looking at environment and labor together. Environment, right now, is very interesting, and hot, and sexy, and the labor issues are really, really hard. They’re both hard, but I think it’s much harder to quantify the labor. For me the disappointment or the concern is that we not let the labor rights issues, worker voice get to drowned out by a very loud and important constituency on environment. I think what gives me hope is the increased focus on this issue. I mentioned the investors, and there are a proliferation of laws and regulations that are driving increased focus on this — The UK





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Modern Slavery Act, the California Transparency Law, the changes in the Consumptive Demand Provision under US Law. I do think there is an increasing focus and change in the regulatory environment, and that does give me hope that over time this will push for change and progress.

Bruce: A second question that digs a little deeper into it is that we had a

lot of discussion in the previous panel of the Accord and the Alliance. The Accord, which is the agreement, and the two largest to my knowledge of multi-stakeholder agreements, particularly in a specific country with a specific purpose, but the Accord which had labor participation and the Alliance which did not, there was some debate about the amount of progress made on the fire safety. I’m not addressing that. I’m talking more on the labor rights issues. The Accord, despite its labor involvement, to my knowledge the level of unionization — people could dispute this — in Bangladesh has not increased as a result of the Accord.

The Alliance, which has about the same record in my opinion on

fire and building safety, has developed a help line, which has thousands of people using it. It’s a positive. It’s not a worker voice particularly. Can we conclude that the experience of the Alliance and Accord about how to go forward on the issue of worker voices, is there anything to be learned, and how do we have the results on worker rights be better down the road? We’re start with Judy.

Judy: I think you’re conflating causality a bit. There were a couple of

things I would have concluded a little differently on the labor law reform. The drop in the unionization in Bangladesh coincides with the labor law reform. I was surprised that that didn’t get articulated, and the analysis from the lawyers at the Solidary Center — I’ll let Sonia expound on that — is not very positive. It makes it harder in several ways. It makes it more bureaucratic. A lot of the unions help back for a year, and there were a lot of rejections after that. The unions that are active and independently organize that we work with and have been for a long time, they found it a bit of a freeze. It didn’t really have much to do with the Accord. I don’t quite know where you’re going with that statement.

IRLF is a witness signatory to the Accord. We were at the table

helping to craft it in the early days before it got finalized by industrial and union. What we argued for really hard was that worker voices, that unions would have a role not just in the





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governance but also at the implementation level. I think one of things that the Accord struggled with is when they got to implantation that was exactly at the moment when the US had revoked GSP benefits. Bangladesh all of the sudden started approving all sorts of unions. All of the sudden it was pouring for the trained unions that actually were organizing workers. They’re actually able to organize unions at the same moment that the Accord’s like, “Hey guys, we want you to join this audit, and witness this, and witness that.”

So for the participation, there weren’t enough people to go around

in the early days. I think they overcame that, but I definitely think you can’t say that unionizing stopped as the Accord took hold. I think there was a lot of worker participation, and the unions worked very closely with the Accord in terms of putting people worker and looking at how the audits were happening, and they were involved in the training teams. I know that the training that’s gone in so many different cases around the world, if you don’t have people that come from worker ranks in the training team, that training often falls flat. I think that was an important.

We did in our study, Our Voices Our Safety, look at the hotline for

the Alliance, and we found that two thirds were coming from men, even though you have this 80 percent women workforce. So we raised this red flag with these guys, and I never heard back if it got adjusted. The other thing that workers told us is because the way that hotline is setup, it’s just information for the company. It doesn’t go directly back to the workers. Maybe in those few urgent cases, but a lot of the workers that we interviewed that had called the hotline felt like it wasn’t really responding to them directly.

Our take on hotlines is similar to how do we restructure audits. It’s gotta be connected to worker communities. I think there’s something to do with technology and hotlines, but if it’s just for the purpose of improving the factory or helping the brands know more, but there’s no direct response or support from a worker community group interfacing with that, it’s gonna fall flat. I’m not giving you a straight answer, but I don’ think any of these are clear solutions.

Daniel: I agree with everything Judy just said, and I would say that I don’t

think we should be looking to the Alliance and the Accord to solve every issue in Bangladesh. I think the strength of both agreements is that they are narrowly scoped to focus on fire, building, and





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electrical safety. Those of you who have been to Bangladesh know that to address that issue in such a massive industry and two densely population urban areas, both groups have the work cut out for them, and I think that we should let them continue to focus on those things.

That being said, we knew this knew before Ashulia but certainly

since December we’ve seen a dire and urgent need for brands, and retailers, and labor, and industry, and government to better focus on social dialogue and industrial relations. I just don’t think we want to necessarily want to put that on top of the Alliance and the Accord at this time. I think sometimes it’s important for us to disaggregate these things, even though they are deeply related, and just recognize that the appetite for certain players if we then said, “Okay, Alliance and Accord, social dialogue is now within your area of expertise and responsibility.” I feel as though the industry and government would suffer from organ rejection, and it would direly impact the fire and building and safety work that needs to get done.

So I think what we’ve had some success with, and I want to caveat

that, because I don’t think you can speak about the fallout from Ashulia with any kind of indication of success yet, but as we’ve reached out to brands, and have been working quietly behind the scenes with Accord brands that we haven’t worked so proactively over the past few years in Bangladesh, and with them are then engaging the Bangladesh government, the BGMEA, the US government, the EU, and local, and international trade unions to see how we can most effectively influence those that need to be influenced to bring about an amenable resolution to what’s going on there.

So I think we’re tried to decouple them if only because the focus of

the Alliance and the Accord is very clear to everyone that’s involved, and we can be a lot more effective if we have this conversation and allow this body of work to exist on the side while still being fully mindful of each other.

Sonia: I’m gonna disagree a little with you, Dan, in brands playing a role

in issues of freedom association violations, and collective bargaining, and social dialogue. Where we've seen the Accord and Alliance mechanisms play a positive role in this regard has just been the fact that brands have been paying a lot more attention to what’s happening in supplier factories in Bangladesh. Specifically





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with the Accord, workers, because their unions are actually through through their affiliation to industrial as parties to the agreement, have been able to call on the brands.

One of the reasons for organizing in the factory has been actually having a say and improving fire and building and safety conditions. There has been that leverage of the accord to call the brands to the table, and the brands have engaged with the suppliers to help try to mediate or resolve an issue. Having that extra weight of the brand engagement has helped to resolve issues that have been both tied to fire and building safety as well as freedom of association and collective bargaining. So I think we have seen cases where this has worked well. I don’t think it would be an impossible thing to look at. I think that there’s a lot of space to have that discussion. As a side note to what Judy was mentioning about the Labor Law Reform, it might seem like if the Ministry of Labor no long has to give the employer a list of all of the workers who have signed up for the union, then that would be a positive development, but what we’ve actually seen is in practice because that is not an official part of the process, it doesn’t mean that that list still isn’t handed over. Now it’s just a lot harder to prove that workers have been targeted for their union engagement and union involvement. So that’s been one of the downsides. You’d think that on paper it is a positive thing, but it’s not actually worked out that way. I think there some are some changes to labor law like that that have made organizing harder, and it’s been harder to access justice, and even if workers want to try to access justice through the labor ports, we’re talking about three or four years down the line, and at this point that job is long gone. So there have been some additional challenges.

Bruce: Judy, you wanted to add something in on this issue? Judy: It was great to have Dan agree with me on a lot of points, but the

distinction I want to make is we’re looking at, “Do we have the union voice at the table in the governance and the implementation?” I think I didn’t get to unpack earlier why that matters. I think when you go to your factories and say, “We strongly support the right to freedom of association and collective bargaining,” as I know your codes of conduct do, and I know that all the brands in Alliance and the Accord are standing behind





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codes like that, but when you go into a country and tell that to your factories, and then at the same time you enter an agreement that’s not negotiated, that walks away from negotiating with the unions, I think it’s beyond implicit.

There’s a pretty strong message that gets sent to the factories, and for me that’s been my biggest concern about the global brands modeling this behavior of we don’t talk to unions. We want you to respect their rights to organize, but we don’t have a relationship with unions either. I think this is a particular struggle that US brands have, because they’re not able to really point back to experiences in the US with Bruce’s friends. I think that’s really a problem, and I think that’s given a wrong message. Just to go back a little bit to the transparency, I think having more transparency with the Accord gave us the ability to actually go in and look at factory compliance reports in a more detailed way. That was also very helpful, but I didn’t want to get into this as Accord versus Alliance. I think you’re right. I think we need to move beyond, and we need to look at what are those elements of solution. How do we get to transparent? How do we get to binding agreements? Because again, if the brand isn’t gonna stay with the factory through the compliance process, then the workers won’t speak up, because they’re afraid the brand will leave. There’s this cut and run problem, and that’s why we’re looking for where’s the contractual commitment. Given the way supply chain monitoring and supply compliance initiatives have basically substituted industrial relations in a lot of countries, I think Rob Wayss is absolutely right. We need to look at what’s the new age industrial relations model of collective bargaining. I think that’s what we were trying to point to with the Accord.

Sharon: I just want to pick up on Judy’s last point. From my perspective

it’s not binary. At the FLA we view our role as one part of a much bigger ecosystem. We absolutely need to as an industry, NGOs, and universities, and brands, and suppliers defend the right to freedom of association and collective bargaining for people to be apart of a union of their choice and to know their rights. At the same time we’re very mindful that that’s not always possible, even though it is desired in many cases, and to really work to make sure that workers know their rights and that at the factory level management is very sensitive to not firing people because they’re





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not trying to form a union. We’ve had cases brought to us through a third party complaint

mechanism where we’ve challenged factories and succeeded in reinstating workers who have lost their jobs because they’re trying to unionize. It’s not a problem that’s going away over night. It’s really a difficult challenge, but we’re gonna keep pushing it as one part of a very complex ecosystem.

Bruce: The next question I would ask the panelists to comment on is what

Judy mentioned. Where do we go from here? What are the vehicles? What’s interesting about the Accord and the Alliance is that they released the potential power to do something about it, because you’ve got a lot of brands at the table. Between the two you’ve got all the major brands at the table, and I would just preface that with a comment about atmosphere and law when it comes to worker organization. I went to work for the textiles workers union in December of 1972, and there was one labor law for garment and textile workers organization in the United States in the 1970s, but organizing in Maine, New Hampshire, upstate New York was night and day to organizing in Alabama, and Mississippi, and South Carolina then.

Doing it looked like you were doing two different things completely. In one case it was employers under that same set of law freely firing workers who stood up to organize. In other places they would maybe harass them, but they wouldn’t fire them. There was much more use of racial, ethnic, and religious divisions amongst the workforce, openly in one case in the South. So part of it is what behavior is acceptable when there’s a set of laws. So one of the things that I think is an important component is how do we change the atmosphere. Part of it is the legal framework, and part of it is what’s permissible. How do the players conduct themselves? So the question is where do we go from here after the Accord and Alliance to make progress to change conditions on the ground and deal with the issue of worker voices whether it’s through collective bargaining or some other mechanism?

Judy: We’re very much actively looking for opportunities where we can

bring together either multiple employers, or multiple brands, or even a brand with multiple suppliers in a given country. Whatever the context is, we’re looking at where can we bring trade unions





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both global and national together to negotiate something that’s contractual, a contractual commitment, a binding commitment with the brands and/or employers to ensure compliance. The question is what shape and form does that take?

I think one of the strengths of working in Bangladesh on such a

specific set of issues is that really focused everybody. There was a concrete goal around building and fire safety, but it also stymied the ability to look at the whole picture of core labor rights. So there’s a balancing act. I think if you’re going to negotiate something, it should definitely include wages, and freedom of association, and collective bargaining rights. I think that element of can you afford — are you starving and therefore you can’t afford to lose your job? That wage piece has to be there. Do you have the ability to speak up without fear of being fired? Can you organize without fear of being fired? Those elements are central to all the other rights if we’re talking about the forced labor, or the child labor, or the discrimination, anything. Those are central to it.

However this gets negotiated, I think the industrials pursuing this

act model, a lot of us are studying deeply the Fruit of the Loom model, which is the precursor to the Accord. Fruit of the Loom is negotiated agreement, has a steering committee that’s both union, and industry, and some academics that are guiding it in a bit of a similar fashion to the Accord, but again how do we pull in contractual, binding commitments so that there’s not this cut and run factor? How do you create the transparency that we need?

Jill, you failed to mention IRLF is a co-publisher along with Clean

Clothes Campaign of the HRW report. Just for full transparency and full warning, because we will campaigning and pushing that out. We want to see what are brands, supply chains — getting that list of suppliers is absolutely crucial to being able to enable workers to speak up. Confidentiality excludes workers. You can’t really talk about worker voices if you keep that confidentiality going. I can give two really quick examples.

If your workers are organizing a union, and they file a complaint,

the auditor may come in and say, “Oh yeah, there’s a problem.” They may talk to the managers about the fact that they’re discriminating against trade unions, but when they walk away, and they never tell those workers that it was validated, that organizing drive could be dead in the next six months before the auditors get back. Given the timing I’ll skip the second example. I think that





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lays out why it’s problematic to have all these audits and reports being confidential.

Daniel: I do think these co-governance models as they’re being called now

— which ACT is one, this initiative from industrial that’s seeking sectorial collective bargaining agreements — is interesting. Obviously, the Accord is a model that exists, and then the Fruit example, I think, is also interesting. The difference, and in important one, is that the Fruit model is based on them actually owning the facility, and it’s a fundamentally different mode of economics and contracts when you’re talking about an owned and operate facility versus a contractually engaged one.

If we put those things under the banner of co-governance, I think they are very interesting. You’re not going to see a lot of US companies running to sign up to be apart of them all, and I’m sure, Judy, you know that well. So I think the question is what is the socialization, the training, the capability building that may get brands and retailers to ultimately look at these things in a different light. If the lessons from the Accord and the Alliance are anything, and I mean the political hangover of it, it’s that simply saying this is the only way and these are the terms we’ll accept, I don’t know how successful that’s gonna be. Even if that does play out publicly, my hope is that if IRLF campaigns against GAP tomorrow for now signing ACT, I certainly hope that doesn’t preclude us from working on factory specific issues that require our influence and your expertise to make gains in the smaller areas that we still need to make gains on. I hope we’re not going to sacrifice where we can work together, because we have a difference opinion on what these massive agreements should look like. I do think there are more nimble ways of working together on an ongoing basis that don’t preclude us from talking about these co-governance models, but it shouldn’t just be a one or the other approach. I think the absolute nature of that is not helpful, and so I hope those aren’t the terms of the invitation.

Judy: That’s not next up on the plate, but we’ll talk later about what is. Sonia: I think one of the challenges of not talking about binding and

enforceable agreements that include freedom of association and collective bargaining is that without the ability to actually organize a union, which is the only legally protected organization of





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workers. It’s the only real protection that workers have with legal backing to be able to stand up for their rights in a factory. They’ll still have the fear of getting fired, but at least there is a legal mechanism behind them. Anything less than that is still not full worker protection. It’s a nice discussion. It may lead to some progress, but if you’re really talking about sustained progress, workers are in factories every single day.

Auditors can only show up every so often. They’re not the ones who are in the factory floor every single day. They’re not the ones who can verify every single day that suppliers aren’t keeping goods in the stairwells, or that they’re not locking the doors that have been installed. There are all of these other elements of keeping factories safe that workers have an important role to play in being able to ensure that all of the progress that has been made continues to be sustained and improved upon. I agree with everything that Judy said. I think it’s really important to look at a whole supply approach and not just a country by country approach, but from the perspective of someone who works for a technical capacity building organization, it’s also really important to emphasize that unions in a lot of the countries that we’re talking about have been trying to operate in environments that are extremely repressive. If they do not have the space and the technical capacity to actually be able to organize, how do you organize? How do you bargain? What are the labor laws? How do you actually engage in industrial relations? Without being able to also build up the capacity of unions to be able to do these fundamental functions and to represent workers, we’re not really talking about a functional, tri-part type system at all. So just to add the conversation that there does need to be constant support for building up the labor movement in every country that is part of the global garment supply chain, I think that’s absolutely fundamental, and any place where brands can actually help to facilitate a tri-part type process where there is an opportunity to actually engage workers, bring them to the table in a discussion with suppliers, where you’re already having meetings and where workers can also be part of that engagement, it also is capacity building for workers to be able to have that seat at the table.

Sharon: I would agree. Co-governance models can be a very, very effective

method of ensuring worker voice. That said, they’re difficult to negotiate, and there are not a lot of them. If we can get them,





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fantastic. Unions, also, I couldn’t agree more, and I would maybe invite my colleagues from IRLF and Solidarity Center to think about joining the FLA Civil Society Caucus where you would actually have a seat at the table and could represent the worker voice right in the same room with the brands and the suppliers.

I think on a more serious note, although the invitation is always

open, I would say this really more to me where the transparency component comes in. I do think it‘s really important. I’m very encouraged by this commitment to transparency, and people can say one thing at a government level, or a brand level, or a supply level, or a union level, but what really matters is what you see on the factory floor. There’s nothing like transparency to really shine a light on all the good that’s happening and the not so good things that are happening.

So I would encourage all of us to really stay focused on the

transparency component of this conversation, particularly when it comes to worker rights, and be very discerning about what we’re looking for with transparency. It’s one thing to put your supply chain up on a website. That’s all good. It’s another thing to be transparent in your reporting, but to me the most important thing is transparency in what’s happening on the factory floor and mostly importantly where progress is being made.

Bruce: Why don’t we open it up and see if there are questions from the

floor? Attendee 1: My name is Achmed Louie. I come from Germany, and I

represent a retailer with 3.5 billion euro sales. I think we all have the same opinion I would say. We need more speed to implement, and in looking back to 25 years of working for social compliance in the supply chains, I think it is a shame that we are at this stage and are still thinking about what is the value of audits versus the value of capacity building and so on. I believe what we need is much more pressure that we should give ourselves.

In Europe we are talking about regulating this implantation by a due diligence law that enforces all the companies to make a risk analysis about their supply chains, including all the social standards, environmental standards, and then to think about measures to implement, and then publicly disclose the information to inform the public on what’s going on.





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This is a discussion at the moment. It’s not implemented. What we have under EU regulation already for big enterprises is reporting law on what you are doing. Unfortunately, this does not count for companies like my company with three billion, because big companies really means big companies, and capital market orientated, not private, listed companies. My question to the audience would — perhaps one after the other — what do you think about creating an equal level playing field for businesses when it comes to the shared reasonability of businesses with regard to due diligence regulation?

Judy: I don’t know if it would lead to that much actual change on the

ground. I feel like what we need less of is more, very high level frameworks that ask us to either report or disclose how we fit and how we’re in compliance with the UN Guiding Principals. I think we’ve been through that, not in a regulated way, but in a voluntary disclosure type of way, and I don’t want to be cynical, but I feel like that’s led to marginal changes and how existing programs operate but not substantive ones that are gonna actually get us the gains that I think we all want.

If we’re talking about legislation and regulation, I would probably

sooner like to see us focus on something more specific than this broad thing about due diligence. I feel like a lot of companies can argue that auditing is a due diligence mechanism. That’s what we’re doing. We’re assessing our human rights risks, and then we’re reporting out on them in our sustainability reports, and that’s where we are now and where we all agree is insufficient.

The more recent examples of legislation, which Sharon already

listed, are helpful, and unless this piece of legislation would be absolutely transformative and so smartly written that it would really get to the heart of the issue, I feel like asking us to disclose our due diligence processes is maybe not what I would say is the next best step, because it will also lead to us us spending a lot of time, resource, and hiring a bunch of consultants to making sure that we’re all in accordance with it. I feel like that time and energy would be better spent on investing in factory related programs rather than corporate centered stuff, which it sounds like this might be.

Without more information or having read the draft legislation, I

should also preface that with I don’t know, because I haven’t seen





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it. Judy: You have a point. With all this auditing and compliance initiatives,

there’s been this due diligence element to it, but we haven’t gotten it right, because I think we’re often not looking at this other level. So going back to something Sonia was saying earlier, we’re up against some tremendous pressure of closing civil society space in a lot of the major apparel industry countries. It’s not just the 35 worker organizers who we were jailed between December and February in Bangladesh. Thailand and Cambodia, they’re proposing new labor law reforms that will further restrict worker rights in civil society space in those countries. Honduras, Guatemala, the numbers of union organizers who are getting killed, it’s ridiculous.

I do think with the compliance initiatives, we haven’t been able to

get to that level of due diligence, because a lot of the brands are in it for the risk management effect, or they’re really looking at how do I check out my factors. You’re not looking at what’s the context of the country and how do we get to this other space in the way that Sonia looks at a country and the risks that the workers are confronting that Solidary Center works with day in and day out on the ground. So how do we redefine due diligence? I think it’s certainly an important area, and I’ll point you later on the break to Julia Ormander or Kelly Anne Moot who are experts on the California Supply Chain Transparency Act. They can speak to some of the details on that whole deep dive debate on what we’ve tried to do here and how it might translate into US national law. I can’t speak to it the way Julia can, but can we get to the deeper level.

I have to respond Sharon’s comment earlier. Thank you for the invitation to the seat at the table. I think that we’re looking for a table of equals. Rob Wayss said it really well. If you want to think about it as a collective bargaining concept, it’s gotta be a coming together of a table of equals, not a group of labor experts who are coming in as stakeholders. This whole concept of let’s just increase the amount of stakeholder engagement and things will get better, I think we need to rethink stakeholder engagement now that I’m at an organization that gets tapped a lot as a stakeholder. I’m like, “Woaw, I don’t have that much time.”

Bruce: Let’s take another question. Yeah, Harry?





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Attendee 2: I want to first remind you a little lesson from US labor history in the public sector. Before there were unions representing teachers and many other public employees, there were associations, a teachers association, police benevolent associations, and then many of them grew into unions. So I’d encourage you, and I gather some researchers are doing this, is to pay attention to the rights groups that may well be forming or we hear a bit about in these countries. This has been articulated.

There’s a lot of women rights issues, immigrant rights issues just as there are in the US. There are those issues in those other countries, and those rights groups may either eventually coalesce and form into unions, or maybe they’ll be a different kind of union where they’re not just pressing about wage issues. Hopefully they might grow into that, but maybe they’ll be a different form of unionism. which the rights aspects of workers’ conditions become prevalent.

I’d ask whether you see any of that occurring as well as

encouraging others to look at that as a potential venue for collective action.

Sonia: I think in the export processing zones this is partly what the hope

was, that even if workers couldn’t unionize from the get go, at least if they had worker welfare associations, they could start to function like representative organizations of workers that could eventually become unions, and that’s partly where the push behind having the Bangladesh Labor Act actually expand to include workers in the export processing zones. That is really the hope and the intent, but that has not happened yet.

In the EPZs, the worker welfare associations to the best of their

abilities when they have been able to function as democratically elected organizations of the workers have done their best to try to negotiate some changes in the workplace, but there are real limitations on what they can negotiate over. In Bangladesh in a sector where the garment sector really is the major formal sector employment that workers have in the country, in this case I think we really can talk about actual unionization up front, whereas I think if we were talking about a more informal garment sector, then talking about worker associations or other kinds of rights groups, that absolutely has evolved over time into stronger worker protections and worker organizing.





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I think in the context of a country like Bangladesh we actually could be talking about real worker organizing into unions straight away. There really shouldn’t be any barriers to that except for the complete lack of enforcement of the laws.

Attendee 3: Hi, thanks. I’m Mike Tofal from Harvard Business School, a

researcher in this space. There hasn’t been as much talk this morning or even earlier this afternoon yet about the role of factory owners and factory managers. I want to bring their voice into the conversation. I’m trying to understand the theory of why they’re not included explicitly in the remarks. I teach business school students and hang out more with managers than with unions or government folks, and so I’m trying to postulate a theory in my head as to what you might be thinking about them.

Neither of them are very complimentary, so these are just me

speculating. Are we thinking that factory managers and owners are mistakenly not bringing worker voices to bear because those worker voices would improve health and safety, unleash productivity at maybe no cost because the productivity gains might offset the minimal additional health and safety, and if you pay them better wages they’ll be more productive? There’s a lot of theory about that. I haven’t seen evidence about that as much, but I think there’s theories. So one theory is that factor managers are just living in the dark ages. If only they understood the potential of workers, not only would be the workers would be better, but the businesses would be better off. So that’s one theory.

Another theory is maybe these factory managers are being overly

risk averse, that they’re worried that empowering these workers might lead to greater wages, more wages than their productivity could support, and that not only will they then be too expensive as a factory to attract business, but actually businesses and the orders will leave places like Bangladesh, and go to Africa. There’s a theory that maybe they’re being too risk averse. Maybe they’re wrong about that, or maybe they’re right. We don’t know.

Or is there something? I’m trying to understand. To what do you

attribute the reluctance of factory managers and owners to get on board with the agendas that being described today?

Bruce: Let me try to answer that myself in two ways. The next panel has

two factory owners on it, so you could ask them, but what I would say is I’ve never met a factory owner in this country or anywhere





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in the world — I’m sure there’s one out there, but I’ve been doing this a while — who wanted the union just because they thought it would make the factory run better. I know that’s something we say. I’ve said it. I could make a speech about it, but it’s bullshit. The factory owners believe they know how to run it better, and if they don’t have to talk to somebody else, especially a union representative or really a worker, that they have their supervisors, and they known how to manufacture stuff, and they don’t want a union.

We can make all the arguments about how it’s better when workers

are treated better. They’re more productive. Again, I’ve made days of making those arguments, weeks, and I’m gonna tell you one story. I sat with the president of the UAW in a meeting for two hours with the head of the largest financial firm in the world, which owned a bunch of factories, and the UAW president made an eloquent case for safety, and efficiency, and workers’ motivation, and all this stuff, and I won’t say his name. It was a confidential meeting, but the head of the financial firm said, “Yeah, but the only thing I care about is how much money it makes, and it’s gonna make more money without a union than with a union. So I’m always against a union unless there’s something that forces me to act differently.” I would argue that, but feel free to weight in.

Attendee 4: I’ve asked Suneel from TATA, which is not in the garment

industry, but they have factories of tens of thousands of people with active unions, and I think he values the union voice. I wondered if it would be all right if he spoke to that.

Bruce: Sure, absolutely. Attendee 5: Thanks, Alice. My name is Suneel Buzkrin. I’m from TATA

Steel. It’s part of the TATA group out of India. Our experience with unions has now been 80 years. We really value the partnership of dialogue with the unions, and actually having different tiers of cooperation across the organization right from the operating level of the departments to the top level with the top management and the top union really helps with implementing safety, health, and related practices of getting used bottom up. Without that we feel that much of the effectiveness of getting these processes in place doesn’t really work.

In terms of safety and health, I think the realization has been more





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over the last 15, 20 years, but the impact of improvement significantly improved with getting the unions on board and letting them have a voice in the entire practice. We have been implementing SA-8000, both in the factory and some of our supply chain over the last now ten, twelve years, and that’s been one more platform, which has really helped us improve on these practices by having the union and all the employees on board. So that’s our perspective, maybe a little different, but that’s our.

Bruce: We can debate this. You are already unionized. Lots of companies

that are unionized have a perspective of getting along with the unions they have. We’re talking about an industry that’s not unionized and becoming unionized. That’s really the question. I have a lot of respects for lots of industries that have unions that get along with them, and there are loads of steel, and auto, and many others, textiles in some countries.

Judy: The apparel industry eats its young. It’s really, literally shaving the

margins so close. These factory managers, yeah, of course, they don’t want anything that costs them more. How do we overcome that? I can hear what you’re saying, but we’re supposed to be talking about solutions. Anna told me my job our here was to talk about what are the solutions. Earlier Dan said, “Well, if you don’t ask for everything, maybe we can think about some of the pieces,” and well, okay. Let’s talk about freedom of association and collective bargaining. How do we get more factories to agree to sit down at the table and agree to access agreements for the unions so the unions can actually talk to the workers? How do you undo this fear? I’m passing it to you. Is there a way that we can overcome some of this stress?

Bruce: One question is other forms of organization other than simply

collective bargaining. Judy: That’s a slippery slope. Bruce: The US unions have been exploring some of those forms of

organization. Judy: You mean worker centers? For example, Rock United. Bruce: Yeah, worker centers— Judy: Domestic Workers Alliance?





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Bruce: Yeah, Immokalee Workers Alliance, non-collective bargaining

unions. Sonia: I wanted to speak to the issue of collective bargaining agreements

if I could. I agree with Judy. She makes a really good point about the thin margins that we’re talking about in the garment sector, and the competition for the lowest cost, and Bangladesh being one of the lowest cost countries to produce from, but I also wanted to just note that out of nearly 900 unions that applied for registration, only 50 percent have been registered to date.

So we’re only talking about of those only 424 unions have been registered, and of those on a good day if you’re not counting the factory closures, only 37 collective bargaining agreements exist in the sector, and most of those collective bargaining agreements, do you know what people are negotiating over? Please actually implement the labor law. That’s what’s in the collective bargaining agreements. We’d like clean water, a clean place to eat our lunch, and we’d like you to actually pay us the minimum wage, abide by the labor law. We’d like to be able to take our kid to the doctor when they’re sick without being fired. We’d like to be able to take maternity leave as per the law. That’s what’s in the collective bargaining agreements. These are not things that are above and beyond the labor law. We’re not talking about bargaining over living wages. We’re just talking about the implementation of the poverty wages. This is what we’re really talking about. So I think you can’t talk about why is this happening without talking about power dynamics, and the discussion of are we looking at workers as human beings is a really important piece of this. It’s not something that can be completely left out, because it’s a really important dynamic.

Sharon: If I could just jump in on that to respond in part to what you’re

saying and our colleague from Germany, I do think it terms of government regulation or intervention, there’s clearly a role for government on wage setting. If this is the kind of regulatory framework that’s being discussed in terms of seeing greater activity and participation from the German government and the EU, I think that would be very helpful. The wages are set high. The bar is high. Industry needs to meet that bar.

Second, I agree on the comments on the unions, and I would also





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just add that I do think there really is an important space for a dialogue on this question between brands and suppliers. Price rules, and the suppliers have very legitimate concerns about squeezed by brands. Tammy will probably talk to this in the next panel, but there are some suppliers who have 13 different brands, 14 different requirements, and the brands are pushing suppliers harder and harder to produce more faster, and all of this has an impact on the lives of the folks on the factory line. They’re working longer hours for less pay.

So I do think in addition to the union conversation, there really is

an important place for a conversation about responsible purchasing and sourcing.

Bruce: I think we’ve reached unanimity of opinion on all these issues. Daniel: I think what I tried to allude to earlier was that similarly with

compliance doesn’t work. It’s not a helpful starting point for an actual conversation, and I think another hope I have that comes out of this project is a deep end understanding of the complexity and nuance of how our business actually works versus our suppliers. I think this narrative that we work with these small mom and pop shop factories and we only care about margin and cost, cost is absolutely important, and it is paramount, but there are other considerations.

We have 48 factories that we work with in Bangladesh. I think it’s

our sixth or seventh largest sourcing country, and we don’t only chase low cost. It matters, but it’s not everything. I also think that our vendors — and some of them are in this room — we work with vendors that are $2, $3, $4 billion companies in their own right. I don’t know if this goes to your question, the gentleman from Harvard, but I feel like we need to bring the supplier voice much more into this, because they know their business better than we do as GAP do, better than Judy does, better than anyone. They’re not these small businesses. These are massive multinationals that have operations in some cases across more than a dozen countries.

I do feel like they would be a nice fact checker for both the brands

and labor organizations. I think we need to invite them into the conversation, because Sean’s here and Katherine from Crystal, and they’re two of our best vendors, but not everyone is at that level, so what’s the training and capacity building that we can do with our vendors while Bruce, you and all the labor folks in the room, work





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with your affiliates in the countries from which we source? Because we do need to bridge this gap, and we can bring to the table our vendors. We can invest in them, and their capability, and their ability to handle complex collective bargaining agreements, and all that, but the same needs to happen on the other side.

Then the last point I’ll make is I think we need to recognize where

things are right now in some countries, and it’s not where we want them to be, but there’s gonna be this organ rejection if we try and run before we can walk, and unfortunately I think there’s more work that needs to go on quietly before we move into saying, “The only thing we’ll do are CBAs right now,” because that can be the aspiration, but there’s a lot of steps between here and realizing that.

Bruce: So just to conclude, thank you very much. I think the panel

members did a great job. This is one of the core subjects of controversy, and as we’re trying to figure this out we’re not going to solve it today, but the whole idea is to engage in a dialogue to try and look at how do we move forward in a positive way and accomplish something that we’ve failed to accomplish. One of the things that’s important to that dialogue in my opinion is people putting forward forthrightly and strongly their views to push the parties to move a distance.

The other thing I would say is sometimes in this conversation I fear

that we look around and we say all the brands are equal. There are a lot of brands, and some we’ve brought up. I’ll piss off a couple more people here in a moment — I hate ESG — but someone brought up that there are many brands that get involved in these efforts only defensively, only because they fear being attacked, not because they actually want to do anything. Then there are lots of them that years ago and more so now that actually see a value in accomplishing some things. We and all the other different parties can’t throw them in the same basket. Somehow we’ve got to differentiate, and not be dragged back by the ones that don’t want to actually do anything, and move forward with the most progressive companies that actually want to achieve something.

So that would be a way to conclude this session, because Anna

tells me we’re out of time, and Anna’s the boss. So time for the next session. Thank you very much.

Moderator: The old panel gets de-mic’d and the new panel gets mic’d.





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Tammy, we need you over here, and Sean, we need you over here. I just want to point out a couple of things. Our last panel was really about trying to figure out workers’ voice. The next panel is really to talk about suppliers, and brands, and other business entities, and how they can work collaboratively together to try to change things. I think we’re gonna get a chance to hear other perspectives now. So if you can quickly grab your coffee, if that’s what you’re doing, and get back to your seat, we’ll get the next panel going.

Rick: If everyone could take their seats, I think there’s a break after us.

So the faster we’re done, the quicker the break. We’re gonna get started, guys. We are running about 15 minutes late. Hey, Nate. I really am not a labor organizer. I need Bruce up here to bring some sense to this group.

We’re gonna get started. This is gonna be a different kind of Panel.

I’m Rick Darling from Li & Fung. I know many of you guys, and I’m gonna try to moderate the panel, but I want to set a different ground rule. I’m gonna ask a couple questions of the group, and set the tone, but go right to questions and answers. We’ve got the only panel that actually has two real suppliers on it. I must say based on the comment — I think Dan made the comment earlier —I’m on the board of the association, but if I were disappointed in anything today is that I think we have maybe three suppliers, maybe two or three brands, and about four retailers in the room.

A bit part of what we’re talking about is how does the industry

collaborate, and the brands and retailers very clearly are a big part of that. So on the panel today we have Shawn Islam. I think you have heard from Shawn before. He’s the CEO of Amba ur-Sparrow, probably one of the most respected manufacturers in Bangladesh.

Timmy Rodriquez represents Esquel as the director of corporate responsibility, and prior to Esquel he was with Nike. So he has many, many years of this but is really representing it from a supplier perspective. Ian Spaulding is the CEO of ELEVATE, again one of the more respected advisory and audit firms and compliance experts. Ian has been very engaged in the industry and with a lot of groups, trying to talk about transformation and how we take some of the discussion away from audit and into capacity building, remediation, and other aspects. Then Jane Hwang from SAI, which





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is the one first standard setting organizations in the industry with SA-8000. So she brings a very different perspective as well.

I want to frame this a little bit, because a lot of the discussion we

have relating to how do we move the needle and how do we really move forward as an industry doesn’t always recognize the commercial reality of the industry, and I would say that today the commercial reality of the apparel and footwear industry is probably at its worst point in maybe the last 50 years, maybe more than that. It’s actually an existential problem that the industry is facing that I don’t think actually can be ignored in the context of what we’re talking about in terms of how does the industry begin to move as a group.

So I think it’s something we have to get into, and I just want to go

back a little bit. Unfortunately, I actually was in Hong Kong in 1979 — where’s Dan? — when I was sourcing with GAP, and GAP at that time was doing probably 75 percent of its offshore sourcing in Hong Kong. So the production was in Hong Kong, and when we went to the Hong Kong factories, and there were a lot of them — none of which are really in business today certainly as factories — you saw guys walking around denim machines with no shoes and shorts and no eye equipment. You saw dye flowing into the sewers in Hong Kong, coming right out of the factories and into the streets, and you saw a completely different perspective in the early days in the 70s and early 80s when outsourcing from the United States was really starting to take hold.

Many of you have obviously been to Hong Kong. Today when you

look at Hong Kong 30 or 40 years later, Hong Kong is an industrialized city. All of that is gone, and it progressed, but we didn’t think at the time it was going to progress. Walking into some of those factories was like walking into the belly of the beast at the time, and it was really frightening without even thinking about compliance, because that discussion hadn’t even started. Then from that production moved to the big three, Taiwan, Korea, and Hong Kong, and they went through the same process, and after that it was Thailand, Indonesia, Malaysia, the Philippines, Singapore, the concentric circles of how sourcing developed over time.

I will tell you that sourcing at that point in time was not being

developed for low price. It was being developed, and apparel in particular, because of quota. So we left countries, because they ran





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out of quota, and had to find another country that had quota. As it turned out, those concentric circles of sourcing led us to some very underdeveloped countries, and eventually that led to places like Bangladesh, and Pakistan, and at that Nepal, and places that were very, very underdeveloped in a point in time when people were really concentrating on quota, not necessarily just concentrating on price. So we were in some of these countries for a different reason actually in the beginning than maybe the industry is still in them today, and I think we need to keep that in context.

The second thing we need to talk about is where we’re at today. I

can tell you that we believe that the apparel industry and footwear industry in the United States and Europe is at a tipping point, and it’s existential. Over 6,000 stores in the United States were closed this year. Doors were closed this year. Bankruptcies will be higher than they have ever been. Last year 4,000 doors closed. The year before that 1,300 doors closed. The actual apparel share of wallet is down from 2005 from 7 percent to 3 percent. So people spend now 3 percent of their disposable income on apparel.

Stores are closing. Stores are challenged. Ecommerce, an

interesting statistic, has completely changed the way CEOs are viewing their role in the market. Amazon today is worth $460 billion. Here’s an interesting number. The top 20 retailers in America, public companies, market cap is down $360 billion during the same period that Amazon went to $460 billion. So while Amazon is taking market share and now represents about $22 billion in apparel, it’s also wiping out traditional market equity.

So we are at an existential time, and the only reason I bring it up is that this panel is gonna talk about collaboration. How do we take what we’ve done in Bangladesh, which is really what the new conversation is all about, and using brands and retailer position, supplier and factory position, NGO, and government position, how do you take that collaboration to the next step in an environment where the industry is being shaken to its core? While we have been very concerned about many of the issues that we talk about in this room over the last five or ten years, I can tell you that the C-Suite today of American retailers and brands and European retailers and brands is worrying about whether they’re gonna have a company in the next three years, let alone what their volume level is in Bangladesh. I think that’s way down on their list today. So while all of this going on, and we talk about





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commitments to factories to stick with them, and don’t pull out of Bangladesh, or whatever, there are other forces beyond the theory of what we’re talking about that are creating people making decisions that may not be as conducive to what we’d like to think. So I want to throw out a couple of questions to the group, and then we want to open this up for questions. So maybe what we can do is we’re not going to wait until the end. If you have a question — somebody says something that sparks a thought — ask for a microphone. I think they’re out here still. Ask for a mic, and let’s just make this as interactive as we possibly can. First question, since RANA the focus has been on brands and retailers collaborating together through the Alliance and the Accord to really do something quite different, but more forward how do you see the real role of brands and retailers versus factories and suppliers versus the Bangladesh government? Realistically, if you look out the next two or three years, what are the roles in each of the parties? Anyone can start.

Shawn: So first of all, Alliance and Accord has done a tremendous job.

Everybody knows about it. Yes, we are still behind. The factories have to make a lot more progress very quickly, and you will see that as a lot of these factories — I think they’re at 80, 90 percent compliance ratio — within four or five months you will see a huge surge of the number of the factories that completes 100 percent of their thing, but at the same time we cannot really from the perspective of overall in the social compliance perspective depend on Alliance and Accord only, because Alliance and Accord is already overburdened to take care of a lot of the things.

What would be really good is if we could take the model of Better

Work, which has really looked at the social aspects of the laborers and their labor rights up to the lowest level in a very tall manner, and they’re very well equipped to do that kind of audit, and if there’s more brands that could support Better Work, then that would really help out. First of all, they could guarantee that all the SA-8000 type of things are taken care of. If the brands are behind them, then automatically they could have the negotiation power in the government. So they could go back and negotiate with BGAE and the government as well to overall include the basic labor rights, which is fairly good in Bangladesh. They’re fairly good.

If that part is addressed, the first part, then we are basically





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walking, and then we can start running. At that point the trainings are done at the workers. The trainings are done at the mid-management. The management also sees the benefit, and the labor unions can then come into the picture. So I think that will be the first step that a lot of brands go behind something like a Better Works, just like they’ve gone—

Rick: Coalesce around one group as opposed to two separate groups. Shawn: Exactly. Right now only 130 factories are under Better Works, and

only few American brands are behind Better Works. There is not much European brands that have Better Works. I’m a lucky one. All the American brands that I work for happen to Better Works factories, so my audit has come down tremendously. We are working in a collaborative manner, but the similar thing needs to happen through Better Works. All the European brands need to come in, and that will help tremendously.

Ian: I’ll just add. I’m Ian Spaulding with ELEVATE. We are project

manager who runs the Alliance in Bangladesh. So we have a unique perspective on the work there. I would say the Better Work program has done a great work around the world. I question the scalability of it in Bangladesh. One of the unique things that happened with the Accord and the Alliance is mobilize forces, get them out there incredibly fast, bring up the competency, etc. So far I haven’t seen Better Work be able to mobilize quickly.

Under the UN agency and given the security situation, some of these guys can’t even visit the factories because of the hard tells that can go on, whereas we’ve been much nibbler. The Accord and us have been able to visit factories even with some of the security challenges that we struggled with.

Rick: Correct me if I’m wrong, but the Accord and Alliance collective

budget is probably 10 times bigger than the Better Work budget — something like that, total spent over that period of time.

Ian: That’s right, although I think their cost structure is totally different,

because under the UN agency I think their cost structure is much higher than the cost structure. The budget that Rob talked about, 230 staff, if you look at their spend on an average per person, it’s much lower than the equivalent would be within the UN agency. So I think if you tried to get the ILO Better Work program to do the exact same thing, you would need triple the budget that the





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Accord has, and that’s not sustainable from my perspective. Although I love the program, it’s just that we’ve got to deal with that issue, and I think Jill raised that earlier today.

Shawn: Just to add to that, the factories pay a fee to Better Work as well,

and the other audit that we have to do in European countries, for example, there’s a separate certification you have to get to work for the European companies. There you also pay a fee, so all those fees can be increased if the number of audits goes down, and Better Work is the only authority that does the audit and development. So there is a solution. We’re talking about solutions. So this could be one of the solutions that I could think of.

Rick: But what you’re pointing to, and Tammy, maybe you could speak

to this also, is how do you collaborate outside of the umbrellas? There’s no great appetite, although the Accord has certainly more appetite to go forward than maybe the Alliance does. There’s not great appetite, though, to either governance models, and everyone, I think, is thinking about how could you do this differently but still collaboratively. I know Esquel collaborates and is involved in a lot of these issues. How do see that taking place?

Tammy: Esquel does not have operations in Bangladesh, so I’ll comment

just from a global perspective on the Better Work program and its potential. We have been part of that program in Vietnam and believe it has brought great benefits. There are certainly limitations and things that could and should be tweaked, but I would have to agree fully with Shawn. There’s a lack of collaboration in the industry or agreement about one approach and one effort. I believe a lot of that goes back to the history of campaign groups pressuring brands on different issues. So those brands have to respond to those issues.

So it’s a little bit more difficult for all brands to come together and say, “Okay, we’ll go in this direction,” because I still have pressure on this issue, or that issue, or this issue, and I’ve gotta respond to my stakeholders. So I think we continue to see a lack of agreement about how to provide oversight for a factory, and it pulls a factory in 10 or 20 different directions. Frankly speaking, it becomes something that is written off and brushed aside. Ah, just another brand audit, just another audit, and it’s not just the brands. There’s SAI — no disrespect — but there’s the SAI. There’s the FLA. There’s RAP. There’s SEDEX. The list goes on and on, so from a factory manager’s perspective, it doesn’t get the traction that it





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needs. So if there was one program, we would not look so schizophrenic and coming from different directions.

Rick: So the toy industry and the electronics industry have coalesced

around a set of standards, for the most part a common set of standards, that they use across all of their supply base. SA-8000 was one of the early standards being used by the apparel industry, and as you said now there’s a dozen of them. None wrong, none right, but no agreement on how to set standards. Jane, from your perspective is that even a possibility at this stage to be able to get the industry? Because I think the first step in collaborating is to agree on a set of standards and a set of processes, and then everyone coalesces around it.

Jane: It’s interesting. I look for [inaudible] [01:39:40] in the financial

industry. So if you look at the financial industry, there’s a set set of of auditing standards supposedly that everybody adheres to. Does than then guarantee financial health of every company? Does it guarantee that investors, and finance community, and consumers are all looking at the right things? Yes, I believe convergence around standards is important, but when I look today — and I think we’ve come a long way since SA-8000 was formed 20 years ago — if you look at the letter of the standards, the requirements, they’re all quite similar.

What we need more convergence around is the underlying

processes. So at the factory level, truly everything we’ve been talking about today when we talk about management systems, worker empowerment, the solutions that actually have been proven work, that are proven to deliver not just more effective labor standards, but also business benefits, really empowering works and managers at the factory floor. Then the other piece of it is even if you converge around implementation at the supplier level, there needs to be convergence at the brand, retailer, licensee, all along the value chain of what it is acceptable.

That was the problem with SA-8000. Many of the standards, it was

the most rigorous, and if you didn’t show a stepping stone approach, the brands would pick and choose what was accepting or not. I think today you bring up this context of an apparel industry in crisis, and I think the interesting thing for us is it’s an opportunity. When times are lean, it makes you really think about where you are spending your money. So I heard a back of the envelope calculation yesterday from one of our FTA partners. The





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sustainability industry right now is $245 billion. So as expensive as Better Work and all that seem, we’re spending collectively a lot more money than we would think, and it’s about being maybe a little bit smarter about convergence around collaboration.

Ian: Just to be clear, it’s not $245 billion. I’m telling you our industry is

not that big, people. The entire spend is ridiculously small compared to what people think it is. The entire outsource auditing industry is a $245 million industry.

Jane: That was the point that actually the spend in terms of in house,

grants programs, all of that, and actually auditing is a tiny percentage of that.

Ian: It’s a small percentage of the total, and the interesting thing today

we had two conversations happen. So Bruce came up, and he said, “Auditing doesn’t work,” and then we saw academic research earlier that said, “Actually, auditing does have some positive benefit.” I think we need to recognize that the conversation we’ve had, the new conversation is let’s understand the tools that we can deploy and where we can’t. I totally agree about when times are lean — to your point we’re at existential crisis here — it does force companies to rethink some things.

What Walmart has done recently is a big deal. They stopped their

internal auditing program, and they now are accepting the six or eight different schemes that are out there. SA-8000 is one of them. ICTY is another, EICC, RAPT, etc.—

Rick: Equivalence. Ian: Equivalency, they’ve accepted it, and that is foreseen. Hopefully, it

will lead to better, fewer audits. So we’re not actually doing the duplication efforts in a scale, and Shawn, your factory, but hopefully we’re also learning from Bangladesh that the way we did audits ten years ago, twenty years ago was inadequate. We need to improve the competency of auditors, improve the way in which we collect data, putting more focus on management systems, and then being in the position that we can help factories become better.

Rick: This is an aside, and Alice has a question. We went to equivalency

as well. As you well know we’re going back now about a year and a half ago. Out of the 11,000 factories that we manage active orders in, 7,000 had them audits that were acceptable that we could





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run through our system and take the data from. So 70 percent of the factories, we didn’t actually have to go back in and do a new audit. So that is one move that gets people into that direction.

Attendee 4: I want to talk a little bit more about allocation of resources. You’ve

pointed how subsidized Better Work is. We’ve talked about how much money is being spent in Bangladesh, and that’s wonderful for Bangladesh, but it’s a very large portion of what’s being spent worldwide, and I wonder at this panel if we could broaden the discussion beyond Bangladesh to what are some of the practical things that are actually working between buyers and suppliers on the ground, between workers and managers, but not restrict that to Bangladesh, because unless another country has another — God forbid — disaster, all those resources are not gonna go to another country. We’re not gonna have Bangladesh happening again elsewhere.

I don’t think anyone thinks we’re gonna be able to find that the resources will be made available to replicate around the world what’s happened in Bangladesh. So I just ask for a broadening to successful things that have been happening recently in other countries or that can be moved from country to country.

Ian: There’s a lot of good things that have come out in the industry, and

lots of pockets of good practices. I love the fact that a number of companies have begun to look at the metrics they use for their overall program, which is number of audit findings and severity of audit findings, and to move it towards worker well-being metrics. So, actually, how are workers answering perception surveys? Are we seeing satisfaction rates improve? Is there a correlation between satisfaction rates and worker turnover, and is that actually driving interventions that are different from when you come from a compliance orientation?

Those front runner companies, Nike, Adidas, are experimenting

with that and are moving away from the compliance audit policing model towards a worker well-being or worker engagement model that at least collects new data set to measure impact. That’s interesting tools that are being deployed to enable worker voice with technology. With WeChat as a massive platform in China, that’s really giving workers an opportunity to bypass management when management is ineffective to go directly to brands. That experimentation, using WeChat, and potentially IVR surveys that Labor Link and Labor Voices have done, that’s interesting and





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could lead to new ways of collecting data that auditing alone couldn’t do before.

Rick: The only thing I would comment is it’s non-collaborative right

now. So other than Bangladesh, and the reason I think we keep looking at Bangladesh, it is the only model I’m aware of in any country in the world for the apparel industry to have actually had multiple retailers and brands converge on one set of standards, collectively pay for it, and agree to how they were gonna operate, albeit maybe a little differently according to the Alliance. So there is no initiative like that in play anywhere else yet.

I think what we’re talking about, what the new conversation is, how do we get there? The Bangladesh becomes the model. It was the first experiment of how all that got put together, but how do you take that model out and roll it out to Vietnam, and Cambodia, and China, and other big sourcing markets, and that’s really the key issue.

Shawn: Absolutely, I agree. Jane: Yeah, but I would also come back to Alice’s point that unless

there’s a massive tragedy in every single country, we’re not gonna see that level of resources. So then we come back to the discussion we started with, which is the Better Work program, and possibly charging factories higher prices, or getting brands involved in that to resource that project. I think there’s a lot of agreement on the model itself, to what extent it’s worked in some countries better than others. I think that’s one opportunity for us to look at.

Rick: Christian? Attendee 5: Thank you. Christian Nesbit, Foreign Trade Association in

Brussels, the mother organization of BSEI. I think when I listen to you I find one, that our dollars are very limited when it goes all around our topic here. While Ian is not particularly with us, it’s because we save our collective 2,000 members about $53 million this year by avoiding duplicative audits. That’s a very strong motivation for us on the other side, but some of you may have been in London when Jonathan from SEDEX made his speech in the annual conference, and he was talking about consolidation. I think consolidation is a form of collaboration, and I think fitting very much with the topic that we are discussing.





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We accept as BSEI SA-8000, [inaudible] [01:49:31] Care, and we are working on expanding this pool. Better Work in Bangladesh is one of the partners we are currently finalizing in MOU. I think this is a direction that we have to take to really not reinvent the meal. We have 2,085 standards around the world. We will not arrive at one common standard, but we have to identify in which areas we can really agree in order to minimize the spend there, and then really invest more in capacity building, and this is really the success of Better Work if you ask me. They’re really on the ground. They really take the factories by the hand. This is the only sustainable model that we’re also trying to pursue to a limited extent.

So I think the question would be, how do we arrive at a more

collaborative approach from your point of view? Shawn: Very, very good point, actually. BSEI as well Better Work

collaborating Bangladesh [inaudible] MOU is a great relief, because at the moment we have to do three audits, Better Work for US market, and BSEI, and CEDEX, because each European company has a different one. So that kind of collaboration, if you cannot converge to one standard, at least have a collaborative model, so that the factory does not suffer from audit fatigue, and the factory can actually implement, and the factory staff, HR, and compliance, and CSRT focuses more on an improvement plan to improve the workers’ overall lifestyle.

Jane: When I first started maybe 12 or so years again at SAI, one of the

key KPIs I saw in brand programs was 100 percent of your first tiers [inaudible] audited. So I think moving away from that as a key KPI towards — ELEVATE is working a lot as is SAI — a supply chain segmentation. So really looking at the maturity, especially of the bigger suppliers, the licensees that have invested, that are able to work in partnership on the supply chain, converging some of these programs, allocating the resources to more capacity building where they can, and then really focusing resources on further down in the chain, or where the highest risk, and not risk just from a business risk perspective, but from an impact perspective.

I think that looking at the whole ecosystem and saying, “It’s not

just about getting more resources. It’s smarter,” and really than that top down approach of the brand going to the supplier and saying, “I don’t care. It’s my risk, and I just need to have an audit.” It’s





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saying, “You’re a partner with me on this, and let’s work together to identify where in the chain we need to focus together.”

Attendee 6: Hi, Amy Hall and Eileen Fischer. That’s a great segue, Jane, into

the question. I have two unrelated questions. So the first one was related to what Sharon had mentioned in the earlier panel about purchasing practices. We’ve done a lot of internal study on the route cause of so many issues in our supply chain, and constantly the answer comes back to us how we’re placing orders, and repeating those orders, and changing the orders, and running out of timing, and forcing the supplier to do all kinds of wrong things.

So we’re now trying to tease that apart internally. So one is do you

see that as a viable study and an area of focus for brands going forward? Couldn’t that actually have a huge impact on the wider system of apparel purchasing manufacturing?

The second thing is I’m just curious if anybody on the panel has

any opinion about the Sustainable Apparel Coalition. Talking about collaboration, that seems to be where a lot of energy is right now. So I’m curious what y’all think.

Rick: The SSE, the Sustainable [inaudible] [01:53:45] Consortium, that

is a web based model, and you can do self-verification and self-audit. You can submit the result, and people could actual come, and the auditor could check the results, and see if all your documents is in line, and they certify you online, and then other people could come in, and subscribe, and if you give permission they could see your entire result publicly. So it’s a collaborative platform, and it’s excellent, and it’s very well in that [inaudible] sector, at least, in that [inaudible] sector for sustainability. Yes, those types of models is a very workable model.

Tammy: I’ll comment on the Sustainable Apparel Coalition. We are a

founding member of that organization, and I respect a lot of the work that’s been done there. I think it’s worth noting, though, that the bulk of that work has been around environmental issues, and I also think it’s worth noting that there’s been a massive move in the conversation to sustainability. We hear more and more about that. It’s a lot easier to talk about sustainability. Energy savings is a win-win for a factory owner, and a brand, and those interested.

My plea here is that some of us stay connected to the topic of human rights and labor rights in the supply chain, because the





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movement is big. I can tell you from sitting on the supplier side, the majority of our brands and customers are talking about sustainability, and that generally translates as environmental issues. The social side has lost traction, and so it’s important that we stay engaged on that topic. The SAC, I think, has done tremendous work on the environmental side, and I think that should be recognized. They have an effort around the labor piece, although that’s still being discussed. I think there’s a lot of complexities in getting people to agree on these more difficult topics. It’s a lot to agree on the environmental piece. So that piece is up and running, and it’s good, but I think there’s a lot more work that needs to be done, and maybe if there’s somebody that’s more directly involved in the SAC here, they can also comment. I’ve been a little bit out of the loop, because frankly I’m a little tired of that conversation of trying to convert for the last 20 years.

Rick: Maybe I can just do a little bit on the first question, because that

was more of a commercial question. I actually think there’s another commercial issue that we all have to deal with in our industry, and that is very clearly that some of the historical purchasing patterns of moving quickly, and changing orders at the last minute, and moving orders out when they were planned for a particular time, all those things put a tremendous pressure on any factory or any supplier that’s trying to do that.

However, all that being said, if you look at the market in terms of what’s being driven by the consumer, both through ecommerce and not the destocking of brick and mortar stores, the trend is gonna be more difficult, because it is many, many more skews in much smaller quantities. So, Amazon as an example, a lot of talk about their private label business, their private label business operates on about 250 pieces per style exclusively produced in their own private brands. There’s not a supply chain in the world that I’m aware of that is geared to make 250 pieces of 120 styles in a 30 day period of time. So while we’re looking at trying to figure out what purchase commitment could become, I think we have to start to almost say, “Okay, that was historical purchasing. How is purchasing going to be done over the next ten years?” It’s going to be done very, very differently, I think, putting even more pressure on the supply chain to try to react to it.





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Jane: It’s also a new opportunity to bring those disrupters to the table. I

think part of the problem has been the same brands, sometimes the most impressive ones, in the same circle all the time, and at the fringe is most of the business. The practices are being driven by companies that are new, and disrupting, and not at the table, and not being called to the table. Amazon is an example of a company that values its supply chain. It knew how to make money out of supply chain, and if we can as an industry — this what fascinates me about Cornell and the research opportunities there — start to quantify the true cost of labor, and environmental conditions, and supply chain, and turn it into not a cost, but something that’s sourcing professionals the business can truly value, something that I think we all know as practitioners, but we haven’t been able to prove on a large scale. I think that’s the optimist in.

Also, to the extent that things go online, you have that opportunity

— somebody mentioned consumers before — to engage them in a different way, and not with this huge number of standards and technical differentiations that we’ve approached it before. Shawn, maybe you can talk about Fairphone and how it’s made people think differently about the cell phone sector. Sometimes we sit here and think in the apparel sector that this happened to us, that the low margins, the seasonality, the supply chains we have just were imposed upon us. I think with this disruption there’s an opportunity to rethink. Can we change the behaviors?

Attendee 7: I have a point in that. My name is [inaudible] [01:59:38]. I come

from India, and I’m a supplier via the [inaudible] textile mill in India. So apart from the number of audits that we face, which has become a routine, and we’ve adapted to them, one of the biggest challenges that we see is that the buyer and the brand is not in sync with the HR head of that brand. The HR head wants compliance to the maximum level. The buyer wants a $2 product. Now the $2 product, if you see why things are happening in Bangladesh and not anywhere else, because the cheapest products come out of Bangladesh. We ourselves need to look inside that if you want cheap, we think Bangladesh.

In the costing model if you look at it again, there are three models:

fixed cost, variable cost, and the profits. You take out the fixed costs. You take out the profits. There remains the variable cost. Within this geographical region, the variable cost has to stay the same. If the buyer drives this cost even further done, the first





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impact happens on the workers. That is the first, because they are the easiest to arm twist. It all starts from the top.

I think the discussion we are having on how do we bring the

factories up, the buyers should also be equally responsible of how the fair value of the product should be. That is a discussion which we as a supplier really having a difficulty making the customer understand. If you go in the room where the customer is standing alone, the customer will actually say, “We don’t care,” and I work with the best of the brands in the world from Dolce & Gabbana to the [inaudible] [02:01:18] Group, everyone says the same. We can all sit here and talk about social compliance, but at the end of day when it comes to buying, price is the only king.

How do we touch the buyer? I’m sorry I’m being very upfront

about it, but this is the real matter of the fact. How do you change your buyer? I believe there are multiple brands sitting here, and I didn’t find a better opportunity to take it right on with you guys. How do you address this? Thank you.

Shawn: I’ll try to answer this question first, not on behalf of the buyer.

First of all, it’s a complete misconception that Bangladesh is the cheapest place to produce garments. We produce also for the top brands in the world, the brands you mentioned, as well as you wouldn’t believe 60 percent of the top seller of the UK — Marks and Spencer — was produced in Bangladesh last year. It’s not just women’s clothing. I’m talking about silk [inaudible], those type of things. So it’s not that Bangladesh is the cheapest producer.

The efficiency level of Bangladesh, factories in Bangladesh, India, Jordan, and the efficiency level of Bangladesh workers are fairly good. I just want to take that away, that yes, maybe Bangladesh is not just the cheapest product. We also make the top brands in the world nowadays, because the maturity level has gone tremendously up.

Now we are also operating in a fierce competitive environment.

We are competing with the rest of the world. It’s a global market. So buyers at the same time nowadays, even though the compliance standards are going up, the social responsibility standards are going up, taking care of the workers is going up, all aspects, are also having a price pressure, because of this competing model, [inaudible] fast fashion. The lead time is cutting down. Your margin is coming down, and the pressure on the prices are coming





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down. So can we tell Inditex to give me more money for something? We ask for it, but we don’t get it, and if we cannot provide it, they will go to somewhere else where they are willing to give that price.

Attendee 7: That’s exactly my point. So the social compliance and the buyers

are totally different. The minute company goes from privately held company to a publicly held company, the perception of the company within itself changes. You are not looking at fashion anymore. You are looking at numbers. Your buyer has suddenly changed into a mathematical formula where you look at profit, profit, and profit. Your multiple of your product conversions are not gonna go down. They will want more. Let’s say customer was buying at $10. Now the customer is buying at $8. The multiple of that company, which is the profit multiple, is gonna stay the same. It’s the manufacturer that pays out from his pocket.

So on top of one thing, we keep on investing in our manufacturing

facility. US brands also are enlisting manufacturing facilities, but it is the buyer who keeps shifting from one facility to the another, to another, and you keep on fixing that.

Ian: I’ll just say in my experience, and maybe I work with a different

sort of group of companies, one of the legacies of Bangladesh is that we do need more consolidation, that companies had had so much in basket — in this case with Bangladesh, so many factories and different ways — so there has been a fair bit of consolidation where companies were buying more from fewer factories. Partly, it was driven by a concern that they might actually enforce that article in the Accord agreement that said you are financially obligated, so that had a lot of companies look at how we can reduce, but I’ve also seen those practices go outside of the Accord and also outside of Bangladesh.

If you look at the total supply chain, for example, H&M is $28, $30 billion in 1,800 factories. That’s a fair bit of production in 1,800 factories. Compare that to other companies in terms of the total spend. So there is a movement amongst some brands to try and do more. Now how does that fly in the face of what you just said, which is that may work for some of them, but others who are having financial challenges, they may have to actually increase the number of factories in order to compete, because their actual business is at risk, and so they have to chase pricing even more than they did before.





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Rick: At the risk of being a little bit more provocative, I would also say

to you that much of what we all deal with in compliance and labor relations has nothing to do with the price that the buyers pay. So locking doors, and blocking fire exits, and all those things that we’ve seen over the years, we’ve not talking about putting in sprinkler systems in Bangladesh. That’s a big financial commitment, but many of the issues that we see in terms of safety and certainly in terms of labor relations has nothing to do with the price that the buyer pays.

So the idea that Bangladesh can’t improve its labor relations issue without being paid more money is just not true. That’s just a social and obligation issue that the owners of the factories have to ultimately come to grips with in their society, and brands have to encourage it. I think that dying practices play a part. I’m not suggesting that, but I think that we have to be careful that a lot of what it is happening on the ground has nothing to do with the price of the product. It has to do with how businesses were built. In the case of Bangladesh if you pointed this out before, it’s the country in the world that built six, seven, eight story garment factories in a downtown urban area. So it was unique from that perspective. So the problems that took place were pretty unique to Bangladesh. I think we have to be cautious about that.

Attendee 8: Thanks. Colleen Vien, I’m with Timberland, and if I could just fill

in the gaps a little bit in terms of the question that was asked and the answers on the panel about the Sustainable Apparel Coalition. Tammy’s absolutely right. That group was originally started — Timberland was one of the founding members as well — with an environmental only focus, and then we quickly as CSR and more broader sustainability professionals got that organization to recognize that they can’t have a sustainability conversation with just one side of the coin. So they did embark down a road of trying to incorporate or develop a similar tool that they have today for the environmental module on the social labor side.

That was three attempts within that organization, and I co-chaired

two and a half of those attempts. So I can speak quite intimately about the challenges that that group experienced in terms of trying to come together as an industry and align on not even a standard but an assessment tool that was a way of measuring basic compliance all the way to aspirational. That was challenging, but I do believe we got there. What ended up happening from there was





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that within the group, everybody recognized — differently than the environmental frameworks and industry, those issues — there was no tool like that for the environmental work. There were multiple different schemes, and multiple different tools, and multiple different brand proprietary tools that are already existing. So why was the SAC then trying to create and duplicate yet another tool?

That’s why at the SAC level you’ll find that there is less

conversation about the social labor work, but that doesn’t mean that it has gone away. I want to make sure that the group here is aware of what is happening, and that is that conversation was moved off of the SAC’s agenda, and a new organization was created called the Social Labor Convergence Project, and that group is right now very close to launching — it’s piloting their tool right now — a public tool very similar to what the SAC has created with the environmental framework.

So similarly as they described it, it’s an online tool. It’s a self-

assessment. It can be independently verified. It can lead to those who participate, and accept the results, and understand what its strength and weaknesses area, it can lead to less audits for our suppliers on the social labor side. That then means that there needs to be the tools and the means for investing what now is always invested in the auditing and reinvested into the capacity building and remediation. That’s where I think this group is not endeavoring down a path of duplicating again that effort but yet influencing that effort in terms of how do we make that auditing tool different, and more meaningful, and can lead to as the new convergence calls it the auditor as a coach as opposed to a police.

That’s important, but I think the work here in this room is more

about what happens after that. Audits are only an absolutely baseline, a point in time. It’s what happens in between and after that it’s important, and I think that’s what I’m hoping this conversation here with this group and this project is gonna be about. Let the auditing tool and convergence process happen over there with that group that has gotten that momentum.

Jane: SAI has been participating in the working groups of the Social

Labor Convergence Project. We still have a lot of questions about where it will go, but I think we agree with the vision. What we have been trying to drive is that even if the premise is this is just the beginning, this is just the audit tool, that it should measure the right things. We talked a lot today about worker participation,





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worker-manager engagement. Those things need to be measured from the beginning. They should be embedded. I think the positive is that the group is doing this. So rather than the mistakes of the past, which have been to focus on the compliance criteria themselves, versus underneath it in an audit are we measuring that there are proper grievance mechanism?

In SA-8000, for example, in the last version we have embedded the concept of worker-manager social performance teams. These are cross-functional teams, not just one representative, but peer elected teams that are responsible for everything from internal risk assessments all the way to implementation. So those are the types of things that if you measure correctly from the beginning, you already set the stage for the capacity building and the proper implementations. I think this is the promise here of this particular effort. It’s not focusing on the letter of the criteria, the standard, whose in better, but what are the common underlying processes that we can all agree with.

Attendee 9: I was gonna say what Colleen was gonna say in part, but the idea

here is that we talk about the audits, and as we discussed earlier today, audits are necessary but not sufficient. You guys talked a lot about the costs involved and that the money is not necessarily being spent in the right place. So we need to increase collaboration on the audits so that we can have more resources to spend beyond auditing, moving to co-governance model, or what Colleen was talking about in terms of remediation, dealing with the root causes of the things that pop up repeatedly in the audits as opposed to just remarking on them every audit every year.

So the Social Network Convergence Project is part of that. You

can’t collaborate unless you have trust, and so the SNCP is trying to build that trust, trying to create a standard audit protocol so that everybody knows no matter who’s doing the audit that the audit’s covering the same thing. Now you might have your own opinion on whether the results are good or bad, but you know the results cover the same issues.

Another effort similar to this that we’re working on in

collaborating, since we can’t get to where EICC is with the electronics or toy industry, it’s something called APSCA, the Association of Professional Social Compliance Auditors. Again, this is a trust so that you can collaborate. A lot of people say, “Oh, we can’t trust your audit, because we don’t know who your auditor





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is. We don’t know if it’s just somebody who came off the street,” and that’s a common excuse not to collaborate in the industry. So what APSCA is trying to do is what’s done in the accounting industry and many professional industries, which create standards for the auditors, so that there’s so base level standards that auditors can aspire to even higher at some point so that they can collaborate.

Again, what these will do is hopefully create more collaboration on

the auditing so that we can move to the next level, which the purpose of this conference, I think, is about. What is that next level, and how do we accomplish it? We can’t do that until we get this first part right.

Ian: I was just going to comment as a guy who gets hired often to do

audits in the supply chain. There’s a lot of noise out there. If you look at the SMEDIS system, the CEDEX system, which uploads any audit irrespective of the type of audit, you will see that there are fundamental differences. There’s a QC auditor who goes in and checks product and looks for children, and they call that an audit, even though he’s there for 20 minutes in the factory, and that’s uploaded. So sometimes the audit fatigue conversation stems from actually us talking about apple and oranges here. It gets confused or conflated to see the same thing when they’re sometimes fundamentally different.

Same thing with a social labor audit compared to what the Accord and the Alliance do in Bangladesh, that’s totally different. That’s a technical audit of building and safety with farrow scan, etc. and you can’t compare that to a social audit on child labor or other types.

Attendee 10: I just want to say that Rick made a really compelling case for retail

is changing, and brick and mortar stores are not going to be there like they were in the past, but if you talk to the people in sustainability at Amazon, they’re doing the same thing with auditing, and if we are dealing with our build a better mousetrap, build a better tool, we’re gonna be left behind. Amazon are building brick and mortar stores, and these brick and mortar stores don’t have any check out. You go in. You swipe your credit card, and then you go to the counter, and if you take something off the counter, you bought it. If you pick it back, you returned it.

They’re doing the same thing with auditing. They’re





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experimenting now with the internet of things. They’re putting sensors in the factories that they’re using for apparel in China. If an aisle is blocked, they know it. If a door is open at any time, especially when the auditor isn’t there, they know it, or if it’s closed, they know it. Now there are certain things they even admit they’re not going to be able to get at with sensors and technology, whether there’s child labor in the factory or whether there’s actual real unions and freedom of association, but they’re thinking about these things, too.

They went to one of the mobile phone companies that we all know that has programs working with workers. They couldn’t get them to deliver the worker communication system that they wanted, so they had their own Amazon people build it in two weeks, and now in the factories in China they can check in with every worker in those apparel factories where they’re producing every morning. So if we’re talking about how we’re going to do auditing better five years from now, we’re all going to be without jobs. We have to really be thinking about what’s next, and I don’t hear that right now, talking about what’s next, and how we’re going to do differently, not just better.

Rick: Jill, I think those are really good points, and to your point on

Amazon, even their audit approach, and what they’re willing to accept, and whether they will accept a factory prior to remediation, all of the rules that they’re putting in place when you talk to them say, “That’s not the way the industry actually works. You’re putting yourself at a disadvantage.” They will up front tell you, “We don’t care. This is how Amazon is going to work,” and the one thing I think we have to stop betting is betting against Amazon.

Two weeks ago they came out with a patent on a factory that’s going to be able to produce the 250 pieces I was talking about in 10 days with 3D printing and 3D capabilities, and they actually patented the process of how to do this in a factory. So if we’re not careful, ten years from today they’ll be beating our manufacturers. I think it’s a really good point.

Jane: I do want to raise one point, though, about technology, because

you keep hearing about how technology is going to change and solve a lot of the issues that we have today. That without the fundamental trust building, the dialogue that we’ve talked about





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throughout the day between workers, and managers, and unions, and buyers’ transparency, it’s just another piece of technology. We just ran out tent squared worker-manager engagement program. One of the examples is steel plants in Turkey, a 6,000 person operation. They’re very sophisticated, plenty of technology. They had been going around with gas leak sensors for years. It would go off, and the workers would be like, “Meh, what’s going to happen anyway?”

Rick: Like our fire alarm. Jane: Yeah, and it was only by us going and building these peer elected

worker-manager teams, helping them, orchestrating them through a 100 day challenge where they go to identify the risks, where they go to mobilize the rest of the workforce, working together with the union — essentially we were just there as facilitators — they got to actually set the challenge and create their own work plans. It was only then that the workers trusted the system, started reporting, started believing like there was something going to happen, that they then came up with their own solutions.

The company at the end of the day told us that they’re probably going to save millions and millions of dollars in just wastage of gas. It was just something they hadn’t been able to unlock before, and that’s not say we work with a lot with Labor Link and all these technologies, and I think there’s a real promise of it, but I just want to caution that these are all just surface level solutions unless we really tackle the deeper collaborations we’ve been talking about.

Rick: Any other questions? Attendee 1: Once, Achmed Louie from Treebourne Germany, I think when we

are talking about what’s next, I think this is the question we have to discuss now, because we are talking about 20, 25 years, and I’m within these talks of all these 20, 25 years. Therefore, we have to raise the base. When I look at the program, or the self-understanding, or the philosophy of this new conversation project, I did not know it before — sorry for that — but I think everything is in what is necessary. It starts with a buyer-supplier relationship. We have to rethink our relationship to our suppliers. What we need to have is an equal eye level and not like Amazon is doing it, repeating the faults others did already for 20 years. I think the stable buyer-supplier relationships are very decisive.





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What we did, H&M did it, we made really great experience with that. We came down with our 3 billion euro business from 4,000 suppliers in former times to 600. If you run innovative programs, you can only do it with less suppliers, which have a better potential. Otherwise, it’s not manageable. This is the one, and if you pull out of those suppliers, you have to think about how to do it. You can’t just leave the suppliers with whom you’ve worked with perhaps for years one time a year or less than one time a year. This is what we did. We waited so long. Since another international retailer was interested in our supplier, and surprisingly those were a lot of American retailers, Australia, and Japanese retailers who don’t care about what’s happening. In those cases perhaps not the Americans, but some of those Americans were not interested in what happened in those companies.

The next thing is purchasing practices. I think it’s to avoid finger pointing to the buyer, or the supplier, or the managers, or whatever. This doesn’t bring us further. What we have to do is we have to think about purchasing practices and buying policies together with our suppliers, and one thing is to have an open calculation. We just talked about this disclosure of information. The same applies, not public disclosure, but disclosure of information in the relationship of a buyer and a supplier. What we are doing is we open our calculation towards the supplier and say, “What is our flexibility in calculation of the project? What can we afford in raising our purchasing prices? What can’t we afford with regard to our competition?” We expect the same in our strategic supplier relation from the suppliers. We see that is there any potential to raise the productivity with regard to our capacity building programs and so on. The next is to stop these discussions on how to improve auditing. This is a snapshot. Auditing is necessary, of course, because normally you get the information after the audit what you already knew before. That is infringements of the ILO conventions, but on the other hand I think auditing is in different situations still necessary, but more important as part of the program as well is capacity building. I think it’s easy if you have stable relations to your suppliers to really set in place those capacity building systems. Then comes the fifth point, you cannot do it for your own. I think we tried it over all of the years, because we thought it’s part of our competition. This is part of our differentiation of our brand, and so





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we did it alone. It’s not possible to do it alone. You have to build collaboration and cooperation even more than we had it before. This is why we decided to step into the Accord. This is why we decided to step into the Act and into the detox thing of Greenpeace when it comes to environmental protection, why those things are produced. I would then perhaps add one point, which is not in this program which I had at the beginning of our session here, that is what we need to have an equal level playing ground, especially with regard to Amazon and those who repeat the faults. We need a legal framework for business, which makes it easier for us as well, because what we are doing is already part of competition and competition disadvantages, because we invest a lot of money in our supplier base. Others don’t do that, but we have to compete with the prices, and therefore we need some sort of equal playing round. Therefore, I really applaud this program here. I did not know it before, but I think this is my program, what we already run in Germany with my company.

Rick: Sean, last question. Attendee 11: I’ll try to be brief, only since Jane mentioned Fairphone. Difficult

comparison, fundamentally we have a very different brand promise to consumers, those who have purchased the phone and actually participated in the funding of the company. We’re private. We crowdfunded through a purchase of the first phone, so inherently we have a different brand promise, and we’re tiny, a very tiny company today, but we did want to build this on some of the learnings — my personal learnings as well many of you here over the last 20 years, labor rights, value chains, and so forth — and focus on transparency.

Often times we see reporting on number of audits, yet we don’t

actually disclose what happened in those factories. We focused on other metrics instead of what are the actual outcomes. What actually changed in that workplace over time? Also, transparency in our pricing and so forth, so looking at it in a different we can debate what transparency is, but that’s what it means to us. We couldn’t do anything without deep, deep work with stakeholders. We have a deep relationship with Iggy Mattel Union in Germany and other labor rights groups that give us a new perspective in





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those areas. One quick comment: investors are key, and I’m glad that there are

some in the room. I think Transila’s study was actually better work auditing, which may be very different from other types of social auditing model. There’s a lot of bad data going in and a lot of bad data going out, and this is also pushed by investors. If we’re still focused on the number of audits rather than the outcomes of programs in factories, we’re stuck in this cycle. That’s a really important conversation we need to have going forward. It’s very easy for a general counsel to say I do my due diligence. I’ve checked these boxes. That’s what they accept from me in reporting, so let’s change that conversation about what we’re looking at and how we evaluate companies.

Rick: Thanks, Shawn. I think we’re going to have to wrap up, and I

believe we go on a break. Is there anyone in the room that controls the rules? We do a coffee break, right? Just real quickly, I think a couple things as summary snapshots, not everything that was said, but there’s two things that dawned on me after listening to the discussion.

One is almost everyone in this room, most of us, are pretty

traditional garments or footwear guys meaning we’ve all been around a long time. I consider us the brick and mortar for the most part of the industry. I don’t mean that in a bad way. It’s just a fact. What I hear just now is in startup companies and big players like Amazon who aren’t playing by any of the rules, they don’t play by the profit rules, the equity rules. They don’t play by any of the rules that we play by. They’re actually getting more innovative that we are in this discussion. We need them in the room. We need to find out what they’re doing, and what they’re thinking, and how they can join the industry, and maybe even startups leading the industry.

The second thing is we need to stop concentrating as much on what

we’ve been doing. We’re talking it to death. For the last five years of these conferences, it’s not new conversations, but the various conferences I’ve been going to — to some degree, I don’t know how you guys feel about it — we’re talking about the same issues for the last years of what we’ve been doing for the last 20 years. We know it’s not where we want it to be now, and we almost have to maybe as an industry start thinking about zero basing. Just put the past behind us, and sit back and say if you were starting your





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business today, and you wanted to address these issues, what would you do? That’s what Amazon does.

Amazon doesn’t care what we do. They’re sitting in a room saying,

“This is what we’re gonna do.” It might be completely different with sensors, and technology, and using other kinds of firms to advise them, or whatever the case is. So I would encourage us at the next go around to maybe park the past a little bit, and come into a room, and just sit back and say, “What should we be doing? What’s it look like five years from today?” instead of trying to figure out what it looks like six months from today.

Anyway, thank you. Thank the panel. Moderator: We have a great panel on the future of trade in a Trump

administration and what the potential could be. So please come back in 15 minutes.

[End of Audio] Duration: 152 minutes


75508_Cornell 3 Will Milberg, Eric Biel, Jon Jacoby, Katrin Kuhlmann, Molly McCoy, Anna Burger, Participants


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Will: Will Milberg. I’m dean at the New School for Social Research down the street. I’m also a professor of economics – of international economics in particular – and have done lots of research on global value chains and labor standards. I think we’re in an interesting moment, both in this day and historically, in terms of trade policy.

In a sense – as my friend Todd Tucker wrote in a recent Roosevelt Institute piece on the election – Trump won on trade, and I think clearly, the Trump candidacy was built around the plight of a certain part of the working class in America and the threat to that segment of the working class – and to American workers generally – from globalization, from immigration, and specifically, from the policies that molded those. So, Trump won on trade, and yet, what was interesting about that is that Trump and candidate Bernie Sanders had a lot of agreement on the issue of trade, particularly around the Trans-Pacific Partnership, of course, but I think broadly around the detrimental consequences of globalization in the United States. So, in a sense, this notion of the future of trade in a Trump administration and its implications for workers is maybe broader than just that, because I think we’re at a moment where maybe some new coalitions are possible – as with many issues in the Trump administration, of course, there’s uncertainty about what, exactly, the policy is, and I think trade is no different from that. We’ve seen both bold statements and backing away from bold statements, and claims and counterclaims, but something is emerging. Clearly, the TPP was nixed very early on. Clearly, the position on NAFTA is going through some rethinking, as on currency misalignment, and the question on worker rights and the relation between labor relations and trade agreements, both within the U.S. and overseas, is really up in the air. And, given the Trump/Sanders agreement on some aspects of this agenda, I think we should be here in a very creative mode – a way of thinking about some of the possible coalitions, about thinking of some of the ways that globalization really should be rethought, and in particular, around issues of environmental and labor standards, it seems to me. So, we have a chance to start thinking about – this is certainly a silver lining – new models of globalization beyond just trade and into areas generally on – as I say – social standards and, as you’ve




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been talking about all day, on supply chain management. So, there’s clearly a void of some sort in the policy debate on trade for all the fireworks that we hear, and we have a moment – a couple hours now – to try to fill that void. I think we have a great panel. So, what – I’d like to very quickly introduce the panel, and I’m going to do it out of order from where you’re sitting, so if you could just raise your hand – Eric Biel, formerly with the Department of Labor. He left the Labor Department in January, and he has since been teaching at Georgetown University. Katrin Kuhlmann, president and founder of the New Markets Lab, who is a lecturer at Harvard, also teaches at Georgetown University Law Center, and has worked both six years as a trade negotiator at the USTR and on the advisory committee on Africa in the office of the USTR. Molly McCoy, who is the policy director at the Solidarity Center, which she joined in 2009 and became the policy director in 2015. She transferred from the solidarity center to serve as director of the newly launched Democracy Rights and Governance Initiative of the nongovernmental alliance InterAction, and she was previously the Latin American director at Solidarity Center. And, our fourth panelist is Jon Jacoby, program officer at Open Society Foundation, where Jon is focused on business and human rights, and he previously was very engaged in trade policy debates from a human rights perspective, both at Oxfam and previously at Center for American Progress, where he was very engaged in U.S. trade policy issues. So, we’ve really got a terrific panel, and we’ve got people focused on government policy, but with deep knowledge of trade issues and labor issues. So, I think we can shift the focus there, and I guess I’ll ask each of the panelists if they would just make a brief opening statement. Then, we’ll have a little discussion on some of the issues that need a little bit of deeper drilling, and then we’ll turn it to a general discussion. So, why don’t we start with Eric.

Eric: Thanks, Will. I’m really delighted to be here with my friends, Jon,

Katrin, and Molly. I’m going to be brief, as all of us will, and then we’ll get into further discussion. It’s been a fascinating day. As mentioned, we’re shifting gears to talk about trade and the implications for workers. Just so none of you came here expecting me to have some bold predictions on exactly how the Trump administration trade policy would evolve, my crystal ball is a little




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bit cloudy still, but Bob Leitheiser has just been – finally is moving through, so we’ll have the USTR in place and we’ll know more soon.

But, what I would like to do is talk – outline what hopefully we’ll get into in more detail in three parts. First, in terms of figuring out the implications under this administration for workers as the administration moves into its second 100 days. First, the approach to addressing worker rights issues globally, worker rights issues abroad, through trade agreements, and other trade programs – trade preference programs that Katrin will also be talking about, such as GSP and AGOA. I know we’re going to throw around some trade lingo, but I will elaborate on all of that – second, how that approach impacts on the rights of workers here at home, how the implications for workers in the U.S. relates to that agenda abroad, and third, what this means for what I would call responsible business conduct. I prefer that term to “corporate social responsibility.” It’s a somewhat broader term than “business and human rights.” It’s the term used in the National Action Plan on Responsible Business Conduct that the Obama administration issued on December 16th, about a month before the end. So, just one minute on each of those, and then we’ll get into more detail, I’m sure. In terms of the situation with regard to worker rights and trade agreements and trade preference programs, perhaps not surprisingly for someone who spent five years in the previous administration, I want to offer a modest defense of the arc of progress made in terms of greater integrational worker rights and trade agreements and trade preference programs, including the now apparently defunct TPP. This isn’t a commentary on TPP as a whole. It’s about the labor chapter and the so-called consistency plans tied to the labor chapter. I think it provided a good foundation, and perhaps, out of the ashes of TPP, there will be some opportunities to build from that. We can talk more about that. Similarly, on the trade preference program front, we’ve heard a lot about Bangladesh, but in the case of both GSP with Bangladesh and AGOA in the case of Swaziland, some overdue efforts to address and treat seriously worker-rights language in those programs through the suspension of benefits, but also figuring out ways to use those programs as carrots. Secondly, what does that mean for workers at home? I would really urge everyone who’s interested in this subject to take a look




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at a recent book by a good friend of mine, Ted Alden at the Council on Foreign Relations, called Failure to Adjust: How Americans Got Left Behind in the Global Economy. He tries to answer the question that was posed about why Trump won on trade. I just had a chance to review his foreword to his paperback edition. It’s really superb in thinking about workers in places like Monessen, Pennsylvania, south of Pittsburg, and why they turned and all came out and voted for Trump. A coalition had been built for the Democrats going back to the JFK years. Part of it is the feeling they’ve been left behind because of a lack of attention to their concerns in trade policy. The issue that’s ultimately going to come up is what’s going to happen to the kind of policies and programs that have been put in place to address vulnerable workers. The problem that I have, looking ahead, is based at least on the first skinny budget and so forth from the new administration, notwithstanding what happens in terms of what Congress just negotiated. It looks like, in terms of the attention to the needs of those workers who’ve been dislocated by trade, by automation, by other factors, that there’s very little real interest in addressing their needs, and I’m happy to elaborate in terms of specific programs and what all that means moving forward. Lastly, what does that mean in terms of the role of businesses in light of this change? What we’ve got is really an apparent pulling back in terms of the governmental role in addressing some of these issues? The question is how do companies step in and, in a way, take the framework of what was in the National Action Plan, which we can talk more about – a document that rightfully was criticized by many in civil society as a bit weak when it came to laying out an agenda for how government and civil society and businesses would work together, but at least laid out the programs, policies, initiatives over the last eight years. Where do we move from there in terms of how companies and other stakeholders work together in light of the fact there probably will be less of a government overlay than what is laid out on that document. I think that’s going to be a challenge, but also has indicated an opportunity for companies working with other stakeholders to really influence things moving forward, so let me stop there, and we can – I hope I didn’t go too far beyond my opening, and we’ll get into more after the other presentations. Thanks.




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Will: Katrin, can we turn to you? Katrin: Absolutely. Well, thank you for having me here, and I have to say

I’ve been on a lot of panels on trade – never one with this title yet, so this is very exciting. I did, in fact, work in trade policy, as you heard from my bio, but what you didn’t hear in my bio was when I did that – because I usually don’t put dates in my bio – but I will disclose that because I think it’s relevant to the conversation.

I started working – I started my career as a lawyer, and then I went into USTR as a trade policy person in 1999, and stayed there for six years, and what was significant about 1999 – for those of you who remember – is that this is when trade and development really hit the global agenda, and all of a sudden, we were talking about trade’s impact on other countries, and whether or not it was really delivering to those who are more vulnerable in economies around the world. I think that it’s that same thing that we need to figure out now, but I think that one thing that I certainly take from these recent political events is that we really do need to also look here at what’s going on with trade in the U.S. So, how is trade impacting workers here? How is it impacting those who are having a difficult time dealing with the transitions of trade? What kind of models to we need to make trade work in a more balanced way? So, I would say that’s one of the things that we really need to talk about today. I think the second one that I would like to highlight is that trade, to me – and maybe this is just the lawyer in me – is a system. It’s a system of rules, it’s a system of mechanisms that are meant to do different things, and institutions, and I think that when we talk about these issues, we really do need to think about the whole system a bit. My organization – I started an organization to take a more bottom-up approach to trade and rule of law, because that’s one of the other things that I think – somebody mentioned in an earlier panel that we’re talking very top-down sometimes about issues, and trade tends to be very top-down. If you look at the way that we have even talked about trade in this last election cycle, it’s TTP, and TTIP, and all of these acronyms. I’m from Omaha, Nebraska. People are not talking about TPP in the same way that they are in Washington. We need to have a different dialogue on trade if we really want to get to some results. So, the work that my organization does is –I would say it’s not all




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focused on the issues we’re talking about today. We really do approach the whole system. We do a lot of work in agriculture. I was glad that that was mentioned earlier because I think there are some lessons to draw from different areas. We look at supply chains, how they’re governed, how they’re regulated, different sectors, how they’re regulated, and we spend a lot of time working with partners – mostly in other countries, but I think we need to do more work in the U.S., too – to try to come up with these bottom-up approaches to how to make legal systems work. Again, at the end of the day, to me, trade is a giant legal system for its faults and flaws in some areas, but if we can really think about how to make it work in practice, which I feel like has been something that’s permeated over all of the conversations, then I think we can maybe touch on something a little bit different. I think that one of the other things, too, in my teaching – I taught class in early November, and my students all said, “What happens now to all of this? What does this mean?” I’m sure this panel will have all the answers. I think we’re all still trying to figure this out, but I think one of the things that I said then, which I really believe, is that one of the things that we’ve done over many years is build institutions. When we want thing to happen quickly, the bureaucracy is something that can slow that down. When we want things to not happen too quickly, the bureaucracy maybe can save things a little bit. So, I think we need to really think about this whole conversation on trade policy from both perspectives. Where can we forge ahead in a new way, and where do we have some safeguards and checks in the system that might keep things from unraveling in a way that could be difficult to cope with? So, I would say those are just some kind of general points of observation, and then, I think we need to talk here a little bit about the “what” and the how we’re going to do this. And, just to briefly add to what Eric said, and then we can go back to some of these things, I think on the “what,” one thing that really strikes me is that there is a trade program – and, we’ll probably talk about a whole range of trade tools, and trade does tend to work through tools, whether it’s a trade agreement, or a trade preference program, or something attached to one of those things – that have some ability to be enforceable and create incentives, and I think that we have a bit of urgency because one of the trade preference




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programs – the Generalized System of Preferences program, or GSP, to go back into the acronym soup – is expiring next year. So, we have a real opportunity – if we’re going to start thinking about some new pathways – to do that through the discussion on trade preferences, and I’ll say much more about that. I know we’ll be talking about capacity-building, which I think connects to everything, and I do also think that one of the challenges we’ve had on trade is we’ve taken this top-down approach, that we’ve looked at the agreements themselves, often, as the vehicle, without thinking sometimes about how they get implemented. So, that might be another thing we can really focus on. For me, that’s a lot about rule of law, too, and how you build these systems. That’s what I was talking about before. And, maybe some new things that we haven’t tried yet – new approaches. A new form of trade agreement, perhaps, or something. So, I’ll leave it with that, but I hope that we’ll have a good discussion. I hope that everybody will participate in the conversation. I’m looking forward to it. Thanks.

Will: Thank you, Katrin. Molly? Molly: Thanks. I think this is a really great setup already. I’m grateful to

be here on this panel with, as Eric said, so many friends and people who have worked on this for so long. I think we bring a lot of different perspectives that are really complementary. I think what I’d like to start with is – as Solidarity Center, as a worker rights organization, our fundamental model and understanding of trade is that it is not going to work for workers; it’s not going to trickle down unless the institutions and systems are in place that enable inclusive growth.

So, you can add more and more factories to your export processing zone, but if you don’t have functional labor relations systems like freedom of association, collective bargaining, social dialogue, some form of wage-setting mechanism that actually reflects the economic reality of workers as well as manufacturers – if you don’t have a system of monitoring and inspections – and, as Katrin just said, a rule-of-law system, a way for workers to access justice, people don’t have the means to access the benefits of trade. It’ll stay very concentrated, and I think that fueled – certainly in the U.S., what Eric alluded to – both the frustration of where – “This isn’t working for me; this isn’t speaking to me.” The flip side of the coin is that it’s not working for workers in the




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countries that we’re trading with as well. What I think is reassuring is sitting here with you all today, we heard a lot about capacity-building. For me, that’s one of the major missing links. I will say it’s been missing in the previous administration as well. We’ll talk about the new administration too, but I think we heard it, Raymond, in your presentation in the morning when you were talking about human rights – human resources systems as a technological input. We heard it from the representative from Timberland in the previous question-and-answers about transferring some of the funds going to audits towards actual capacity-building. So, I think there is an understanding of needing to build up systems that work, needing to build institutions that work for businesses, but also for workers, and that’s where I see a major public role and a major public deficit. When we’re talking about buyers and suppliers, there’s money on the table. We’re talking about garment workers who are often making less than minimum wage, to expect them to be able to develop their side of a functional industrial relations system when they don’t have offices, when they don’t have free time, when they’re not necessarily even getting four days off free a month, there’s not a lot of space for them to develop the capacity. That’s where U.S. trade policy has to be supported by development policy and it has to be backed by diplomacy that supports these things. It’s good that we’ve been talking about Bangladesh all day today because you have all of these factors in place. You certainly have the alliance. You have the accord. You also have a U.S. ambassador who’s very outspoken – still have – on worker rights, backing up those programs. And, you have the USAID program that’s funding worker rights, funding trade union capacity-building in Bangladesh. So, all of these systems on the table, working to build capacity, and I think that’s what makes something work, is not just evolving the labor chapter and writing better and better things on paper, but making sure that there is the capacity to implement it. If there’s not, it doesn’t matter how sharp the stick is that you’re chasing them down the road is or how delicious the carrot is at the end if there’s no means of moving. If there’s no capacity, you’re not going to see that progress. Like Eric said, I don’t have a crystal ball to say what the new administration is doing, and I left my phone on the table, so I can’t even read the President’s Twitter feed right now, but on –on the




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new administration’s trade agenda and the bigger picture, there are some things that we see that I think are really disturbing. If you’re talking about caring about workers – not just the domestic-side programs, but the things that influence working conditions for workers overseas – we’re not seeing the funding for those programs. We saw – and Eric didn’t mention this – the Bureau of International Labor Affairs at the Department of Labor – in the administration’s skinny budget, they zeroed out the funding for that. They also want to cut funding for USAID and shift the U.S.’s diplomacy from some of the development perspectives to a very security-focused approach. So, if you’re saying you’re caring about workers and trade policy, it’s not just what you write down in your trade agreements. It’s the entire infrastructure to support the institutions that make trade work that you have to be concerned about. If the budget proposal is the only indication of policy so far, it doesn’t look good.

Will: Thank you, Molly. Jon? Jon: First, I’m really pleased to be part of this gathering, but also, the

Cornell Conversations Project itself. The pride there was seeing a new conversation emerge and taking a leap with colleagues around the table, not knowing if we would indeed have a new conversation because I’ve been at so many familiar conversations. So, it feels new in a slightly more macro sense in this room as it does around that table.

So, the idea is to bring together enough strange bedfellows that, over time, they become something of fellow travelers. I think it’s reflecting – there is some fatigue with the fact that we’ve been stuck. This is just the point I probably won’t have enough time to elaborate on, but we’ll get to it. To tee it up, we’ve really –you could put it in a trade investment policy track, and then say that in this era of globalization – let’s just track it from the end of the Cold War to the present – we’ve been talking about trade and investment policy, but really about trade agreements – free trade agreements – in a certain way. We’ve been talking about it in the NAFTA way in the United States since then, and we’ve just been stuck. I can elaborate more, but it shapes the policy discussions as common or esoteric, whether it sends the jobs abroad or whether you can fine-tune and determine which sectors are vulnerable and which sectors are favored, and so on.




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But, we’ve been in that debate, and then the politics take the same shape. You have major multinational companies here, major labor unions, civil society groups’ concerns, human rights, and of course, labor rights closely associated with the union position, environmental groups, and so on. It’s just that trench warfare, politically. That’s what plays out in Washington each time, and it’s happened, whether it was NAFTA or smaller free trade agreements. And, even to the Trans-Pacific Partnership where it was a big trade agreement with major geoeconomic and geopolitical significance, but it was still stuck. Even if the Obama administration said, “This is new, we’ve really invested in labor standards,” the mistrust that had been built over a generation was really too much to overcome. So, we’ve been stuck there, and this is the debate about globalization with a policy lens – public policy lens – because trade is the lever. That’s how we’re going to ensure worker rights and standards improving. Trade is how we get around the fact that developing country governments won’t invest in this; they’ll take the low road of a certain type of investment and a certain type of trade in goods and services, and it won’t do right by workers. But, trade will be our lever, and it’s worth trying because it’s a lever available to those who otherwise couldn’t change what the Bangladeshi government was doing. Parallel to this in this same era of globalization is an era of corporate social responsibility. What does that mean? It means there are private voluntary efforts toward addressing these challenges. We’re going to globalize operations in our supply chains if we’re a major multinational company, especially in the industry we’ve talked most about, apparel. How do we reckon with these governance gaps? If we’re supposed to be doing right by our responsibilities to the rights of the workers, to the livelihoods of the workers, or even if it’s just because student activists in the mid-‘90s and onwards were telling us we needed to, then we’ve got to come up with a scheme to essentially govern globalization. But, it was never going to be sufficient, and it was bound to be inefficient. If you reach for a tool that – primarily auditing as the tool – and say, “This is what’s going to enable company by company; we’re going to go factory by factory or in some sampled fashion,” we’re bound to get stuck in something the private sector would really not




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want to sign onto, which is inefficiency, and lack of scale, and all of the things that we’d never think the private sector would be emblematic of. So, these two things – trade is the lever, corporate social responsibility as the model – in a certain fashion, it’s all run its course. For the latter, it was Rana Plaza in 2013. It’s why we’re here, in essence. We’re talking about Bangladesh and what we learned because something had to shake us in the industry to show that business as usual was unacceptable, and the scale of that tragedy was also unacceptable, and we needed to then reckon with some other model that we’re trying to work through today. On trade, I don’t think we got unstuck, frankly, until Trump – and also Bernie Sanders – essentially took the debate. They took the mantle and took the conversation, and somehow, it was hitting the chord because the grassroots politics of trade had been building over the period from NAFTA onward to where you finally had a rejection of trade policy and business as usual within that realm, to the point where Hillary Clinton and some Republican candidates were also going to say they’re opposed to the Trans-Pacific Partnership, even if that was bound to be particularly awkward with the Obama administration trying to advance it. So, with these two moments, all of the policy and the politics of the enterprises are thrown up in the air. It is disarray. So, in the first hundred days of Trump, we’ve seen the New York Times editorial board – even if it’s fake news, I think they’re accurate on this one – it’s in disarray. The Trump policy, even if there was strong rhetoric, is not clear on where it’s going, and I imagine it at least presents an opportunity for us to look fresh at both of these projects, towards globalization that’s going to do right by workers – and, by the way, for the environment – and we’ll have to really think hard about the intersections between what has worked to try and innovate in microcosm or in specific countries and industries – maybe beyond the apparel industry – to get us to scalable models, and soon, before others fill the vacuum that is left by the rejection of business as usual.

Will: Thank you very much. Great introductory comments. Lots of

overlap and lots of issues to be understood in more depth. Just a couple of comments, and then maybe a question to throw it open to the panel, which is that there is something real going on in the Trump/Sanders position vis-à-vis globalization. We are at historic




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levels of inequality, we are at decades-long stagnation of incomes and wages in the U.S., and there’s something real going on.

When the unemployment rate is almost at full employment, and yet the employment-to-population ratio is stagnant down around where it was in 2008, there’s something real going on. So, it’s important to recognize the reality of the moment, and it’s – if you read somebody like Danny Roger – really, one of the visionaries on the issue of globalization and its limits – as he writes, “It is the end of the era of trade agreements.” It’s a moment to think about – as I think all the panelists have hinted – new models, new tools, new approaches. In my own research, I will just say, when we’ve looked at surveys of people’s feelings about globalization across the OECD, we’ve found that there is a much more positive view of the impact of globalization in countries – typically northern European; German and Scandinavian countries – where there is a very strong social protection underpinning the impacts of globalization, and a very negative view of globalization in the U.S., U.K., et cetera, and you can see how the election correlates with that. I would just say that I want to pick up – in light of that reality and of that impression – on some of the points both Molly and Jon made around the need to think beyond trade policy, that we’ve run the course on some of the tools, and we need to think about how to refine some of the levers – Katrin has some comments, I think, to add about that – but also, how to speak in new ways around the relationship between government policy and labor issues, and how to speak about trade policy tools versus broader policy tools. I guess what I’d like to ask you to go further on, if you would – and, feel free to question each other as well – on this question of how do we get beyond the – as Jon put it – the old model? In precise terms, are there particular ways that you would focus a new agenda? Who wants to pick up on that? Molly – a number of you have already made some gestures towards that.

Eric: I’ll start. The last thing probably most of you in the room want us

to do is dissect how trade policy is made, but I promise this won’t get too dull or too long. One of the problems is that trade policy has been made almost in a vacuum, and this is not a critique of the office of the U.S. trade representative, which is part of the executive office of the President, and has always been viewed as this group of elite trade negotiators, this inner sanctum.




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There are about 240 people in the entire office, and that’s double the size it was – The problem is it’s become an end to itself, and in the course of trade negotiations, there’s very little interaction between the trade negotiators and what they’re doing vis-à-vis trading partners and the implications tied to broader domestic policy. The only time – I can say this from the perspective of having worked on trade for five years on the Hill in the 1990s and later in the executive branch later in the 1990s – the only time the issues of “What’s this going to mean for the workforce back here at home,” other than in the context of tradeoffs between different sectors and so forth is very late in the course of trade negotiations, when people start thinking about a final agreement coming back, and deals that will have to be struck with the Hill, and so on and so forth. So, part of the new model that Jon mentioned and others, including Molly – everyone has mentioned – is really a rethinking of how things work in the course of trade negotiations. What that means for worker rights specifically is – notwithstanding what I said in the first third of my quick presentation about the arc being very much upward – when you look at NAFTA in 1992, 1993, through the Jordan agreement at the end of the Clinton administration, then down a little bit less in terms of attention to this during the Bush administration, particularly with CAFTA, and then moving back upward with agreements negotiated later on, culminating in TPP – sure, the worker rights provisions themselves in the trade agreement are stronger. You finally get to the point of tying them to binding dispute settlement, being on equal terms in that regard, if still a little bit less in terms of the rights of workers, vis-à-vis the rights of investors to be sure. But, the problem is it’s still not unified with what that all means for those who are feeling the economic insecurity at home. So, that gets into questions of how you structure the whole policy and process of trade negotiations, but it also goes to what I think all the panelists are talking about, the need to think about trade in this broader context, whether in terms of development, strategies – and, that’s my last point; sorry to go on so long – that’s what’s most worrisome, as Molly mentioned, about the budget. How can you talk about doing this – how can you talk about a




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game plan for tough trade enforcement – at least with regard to companies with which we have bilateral trade deficits like China, South Korea, and so forth – and think about that vis-à-vis worker rights when you’re basically saying no money for Labor Department grants, dismantling of the traditional structure of USAID, and meanwhile at home, cutting out Job Corps funding, cutting out funding for initiatives focusing on displaced older workers, cutting back on OSHA regulations, cutting back on wage an hour –it doesn’t add up, and that’s the most frustrating thing when you think about the big picture. Sorry to go on so long.

Will: Anyone else want to jump in? Please, Katrin. Katrin: Did you want to go first? Molly: Whatever. I’ll go after. Katrin: Well, just to build on what Eric was saying, I think this is true,

although maybe I would point out that some of that is just systemic a little bit to how policy is done. So, I don’t think it’s only true here in the U.S. I do remember, when I was working in a trade position, thinking about these things constantly and wondering where I could find information on how to do things differently.

It’s not –at USTR, it’s true. There are not that many people doing trade negotiations, and we did not have the capacity ourselves to really understand every angle. Some of us – I did – asked a lot of questions. But, I think that it’s one of the challenges that governments have, that they just don’t know sometimes. One of the things that I was struck by, too – that’s not an excuse, but I just think it means that maybe we need to think about policy from the perspective of all of the stakeholders. I think that’s one of the things that has come out in the conversation today, that the approaches are very cross-cutting. I think we need to think about policy as something cross-cutting as well. Instead of thinking the government is going to do something or not do something – and, I think particularly right now, because we are in such a state of transition, maybe there is an opportunity to shape things differently by virtue of how we approach it, but also how we all come together around some of these issues. So, I do think government is going to be at the center of policy anywhere, but I really was very struck by that from my personal experience, and was struck by the fact that most of the governments that we were negotiating with also didn’t know a lot




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of the things. So, if you asked them – and, if you think that we have a lot of capacity challenges when it comes to trade policy, most governments hardly have anybody. They have maybe one person who is covering everything, from labor, to environment, to intellectual property, to supply chain regulation, trade facilitation, customs – everything, which is virtually impossible to do. So, if we really want to get the system to work differently, I think we’re going to have to push it more from the outside and more from the bottom up, like I think we’ve all said, in different ways. I do think that one of the things that we could also consider is whether or not we could take some of the tools that we have and use them differently, and perhaps whether we need new things. I think this point about trade agreements – this being the end of the era of trade agreements – is interesting. It’s hard for me, though, to see us not having trade agreements, and if we were really to look at the sheer number of trade agreements that exist, it’s almost impossible to think about that being completely dismantled. Even looking at this whole debate over NAFTA now, how things have shifted around to – we’re not doing away with NAFTA, we’re going to renegotiate NAFTA – these things are not easy to undo. There might be an escape clause in a trade agreement, but most trade agreements also require changing a lot of other laws. So, it’s not that easy to just take the system and dismantle it. I think that maybe what we’re looking at, though, is how we could use these agreements differently, how we could use trade preference programs differently, which I do want to talk about. I’m happy to do that a little bit later. But, these are tools that we could use, and they have worked. I think the others have pointed this out today. They may not have always worked as well as we wanted them to or done everything that they could do, but they have had some effect. So, maybe this is a matter of thinking about how we could change the composition in some of these things, and then again, maybe there are things that we haven’t even tried yet. So, to me, when I think about trade policy, I don’t think of it just as the agreement either. I think of it as all of these pieces together – capacity-building, plus the agreements, plus having a different approach to how they’re negotiated, and then the implementation, which I think I said before.




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We have so many agreements that don’t ever get implemented properly. Instead of focusing on the agreements themselves, I think we need to be focusing a lot more on what actually happens once you have an agreement and you try to get real life to move to change with that agreement. So, maybe I’ll stop there for now, but I would love to go back to a couple of the specific trade policy tools, and how we could take this approach and use it in that context.

Molly: To pick up on your point, Katrin, about pushing from outside on

making changes in some of this, it’s apparent to me and apparent to all of us up here – and probably a lot of you – that if you’re talking about what does the administration’s trade policy look like, how do we make it work for workers, that going to – whether it’s people here in the U.S. or it’s workers in other countries – and saying that the answer is increasing public funding for trade capacity-building, and tying that to trade agreements, or defending the USAID budget – those are not necessarily the talking points that resonate with the public.

It’s kind of specific; it’s very much this Washington vacuum. I know that; I work as a part of the labor movement, I’ve always worked for unions, and I know that I can’t make a case for labor rights or a case for the USAID budget and connect those two. That said, I think we have already – we’ve heard it here in this room today, but we’ve been hearing it increasingly in the new administration – all of us trying to figure out how to make these arguments from different perspectives. So, we’re here talking about new conversations. I think this is one of the ways that we have it. And so, I don’t know how closely folks are following it, but the FY ’17 budget agreement came out – hasn’t been voted on – on Monday. One of the things that we were really worried about was funding, again, for the Bureau of International Labor Affairs and whether they would be able to continue doing this work. We were pretty – and, I say “we” as Solidarity Center, but probably “we” as a number of us here – were pretty nervous about it. What we did see this time around was hearing that nervousness reflected back and spoken about in a bunch of different ways from different actors. So, we did hear from companies in the U.S. saying, “If you cut this program, it’s a tiny drop in the bucket, but it’s what we need to rely on to make sure we’re functioning in a stable business environment to know that we are not the sole entity responsible for ensuring that there’s not forced labor or child labor




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in our supply chain, that there’s actually programs that are monitoring this, that are enforcing this, that are working with governments to correct it.” We heard from faith-based groups. We had a bishop – an archbishop, I guess – write to one of the majority appropriators and say –this is someone who’s not pro-union in any particular way, but very concerned about child labor and human trafficking – again, saying, “These are concerns to us, and these are things that need to be priorities.” Absolutely, you heard from unions, you heard from workers saying if the way we’re talking about this is a level playing field for American workers, and that’s the concern domestically, then you have to look at worker rights overseas. You have to look at that as a part of the trade agenda, and not just write these requirements on paper, but make sure that they’re backed up with real capacity-building programs, real monitoring, rule of law, access to justice – And so, I think we’re starting to see that. That may be one of these – it’s not a hard tool, but the fact that we are all here having these conversations and looking at different – perhaps strange – bedfellows, but alliances to make these points about how essential it is to have these conversations to support these programs – it’s a start. So, I’m really reassured to hear these different pieces from you all today, and looking forward to hearing more questions about them.

Will: Do you want to add anything? Please. Jon: Yeah, I would love to – quick points, but a few of them –that

resonates with what each of you have touched on. Ten years ago, I had a chance to work on – the last deep dive I’ve been able to do as a trade wonk who’s now in recovery. I don’t do as much as these guys do day to day anymore, but the idea was let’s just – for a moment – take seriously the international worker rights agenda, rather than just see it as a byproduct that we’ve got to get some trade capacity-building to get the deal done.

What if we also – on the domestic side – took trade adjustment assistance seriously and held the whole question of the social contract and the social safety net, the social fabric –rather than just the afterthought and what you need to get the trade deal done. Well before there was Trump, there was trade, and it was dollmaking, and it still very much is. It’s in a legal context, and they’re trading off – it’s an incredibly complex set of negotiations that go on, but




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it’s in that frame. So, what we were trying to do at the Center for American Progress was just to take the freight off of the trade train a little bit. There’s too much on it. It was already too politicized ten years ago, let alone now, but there are all these other tools, and there’s all these other ways to think about it. There’s monetary policy. There’s development policy, and maybe more than development, the institution building. Wouldn’t China need a strong EPA? Wouldn’t Bangladesh need a strong labor ministry? Didn’t we already do those things at home 100 years ago, even though in the U.S., we know these agencies have frayed, or they were created and rolled back, or as in the current Trump budget, they’re zeroed out? So, we call it the “Roosevelt consensus” because FDR and Teddy agreed on a lot of these investments you make in both institutions – like the New Deal ones – and in protections – like the ones Teddy Roosevelt put in place. China and Bangladesh – they’re a lot, in their industrial relations, where we were 100 years ago. In other respects, they’re already well ahead of us, even in 2017. So, that was the thought then. Now, in a different organization, I don’t work on trade per se, but what we do is try to enable civil society groups to at least look at the governance of trade, especially the policymaking apparatus, and what we’re then supporting are civil society groups that are helping trade policymaking itself become more democratic, more transparent, and more accountable. That was speaking to what Eric was saying about the inner sanctum, especially in relation to a certain subset of businesses who get to influence disproportionately how trade policy is written versus democratizing the process. Maybe we wouldn’t have such wrenching, heaving political swings, like we’ve just had, if this were more democratically owned. You wouldn’t have seen anti-TPP signs at both the Democratic and Republican national conventions. So, there’s this question of what’s the “what,” then? What are we going towards? I can’t speak to it because we don’t have any of the answers yet, but in terms of the “what” of new policy alternatives, at least there’s that space, and there is fresh thinking to fill that space about what alternative trade policy looks like. I agree – I don’t think we’re suddenly scrapping the existing agreements that




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are there. I think that the evidence is already there with Trump having already said, “We’re going to work around NAFTA,” and we’re with it, even after so much rhetoric to the contrary. So, I think it’s more just understanding that there are viable ideas on – that can be pulled off the shelf, and other ones that need to actually be co-created in spaces like this, where you have multisectoral new consensus-building going on, that would consciously avoid the old trade politics and trench warfare that it usually is in Washington. I’ll save a bit of what I was – for later.

Will: Okay. So, it’s getting late in the day, and I think we should put our

panel in the hot seat here for a minute, which is that – So, I want to ask you for some specifics. Jon, I think you started to go there in a really interesting, important way. It seems that the Trump policy is a little bit – it’s uncertain. What’s unclear is even the awareness of how the existing governance structure has helped business, much less labor, because you’re seeing – clearly, the rise of imports in the U.S. has been a driver of profitability and growth, but to many of the companies in this room, and what’s lacked has been this compensation of losers in the process.

So, it’s not even clear where the administration stands on the business side, much less on the labor side, and we’re hearing about U.S. procurement policy being more nationalistic, stricter enforcement of anti-dumping, countervailing duty – Fair trade has emerged from the Republican party for the first time. A weak dollar is now the position of the party, or of the administration, and it’s amazing to hear a Republican administration talk about the value of having a weaker dollar. It’s not put that way; it’s put in terms of currency misalignment, and the policy towards China particularly, but we are seeing some new features of the trade regime emerge. So, I want to put you on the spot a little bit. If you could each comment on – and, we’ve got expertise from previous administrations, and we’ve got experts from the NGO world – on the rest of the world, one or two things that have worked in past trade policy – Eric referred to one when he spoke – and one or two things that clearly have not worked. So, I’m putting you a little on the spot, but I think we need to get specific before we open it up to questions so that people know exactly the kinds of ideas that we’re proposing. Eric, maybe you could start, if I could put you on the spot doubly, because you started already with some specifics about what had worked under Obama.




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Eric: Well, I’ll do this in two parts. What has the administration laid out so far? It said it’s going to – strict enforcement, as you mentioned, will be anti-dumping, countervailing duty laws administered by the Department of Commerce in conjunction with the International Trade Commission. That’s fine. There’s a debate about how the AD and CVD laws work. There is a new push to reinvigorate something called Section 232, which has been rarely used, dealing with aluminum and steel, and we’ll see about that.

You’re right – in terms of a populist agenda that blue-collar workers may embrace, that all sounds good. To pivot to what I know Katrin wants to talk about as well, I’d like to also see thinking about worker rights in trade preference programs like GSP, and not a word on that yet. In fairness, it’s still premature, so that’s not meant as a critique. We’ll have to see. I mentioned in passing that after a fair amount of benign neglect over many years of taking the worker rights language of those trade preference programs seriously, 2013, we had the invocation of the GSP worker rights language with Bangladesh; in 2015, the African Growth and Opportunity Act language with Swaziland. Those were more symbolic than anything else, as any of you who know the circumstances with Bangladesh know all too well. But, the point being that at least evidence that the language matters and it will be applied where there are persistent, egregious violations of worker rights and contravention of the statutory language. The thing is we can do more than that, and this may be a pivot to Katrin. One of the prouder achievements we had in the last year or two of Bureau of International Labor Affairs was figuring out a way to use the African Growth and Opportunity Act not just as a stick, but as a carrot, to begin to bring trade and labor ministers together for a serious dialogue across Africa in ways that would enhance worker rights there, and it’s still a work in progress, and some of the companies in this room have been active participants in that in different sectors, ranging from apparel to cocoa to other agricultural sectors, and so on and so forth. There are some real opportunities there. So, I could go on, but in a nutshell – sure, the traditional trade enforcement –let’s see how different it ultimately is from other announcements of tougher enforcement of trade remedy laws, but I think more promising in the long run would be to talk about how we use worker rights provisions, particularly under existing trade




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agreements, but also these trade preference programs, to lift, hopefully – use that leverage vis-à-vis workers abroad, and bring that back home in terms of one way to help begin to level the playing field. That’s a very quick overview, but it helps pivot to what I know Katrin has spent a lot of time thinking about.

Katrin: It does. It goes into that very nicely. So, just a quick comment –

and, I’m not going to talk so much about the enforcement of anti-dumping countervailing duty; I’m glad you mentioned that. I’d rather talk, though, a bit more about what I think – to answer your question, what has worked and where do we go from there? I’d like to do it around trade preference programs because I think we can kind of cover both of those in there, and maybe toss out a few ideas that would have application beyond the trade preference programs.

So, I think the trade preference programs – and, I’m talking now about the Generalized System of Preferences program, AGOA, the Caribbean Basin program – so, these are unilateral programs. These are not reciprocal in the sense that other countries don’t negotiate them with the United States. So, they’re not a free trade agreement. They’re not negotiated. They’re done through U.S. Congress, and they open the U.S. market to other countries based on a set of eligibility criteria. Everybody probably knows that, but I feel like I should say that anyway because sometimes, I see the lines between trade agreements and trade preferences getting a little bit fuzzy. I think that because they’re unilateral, it means that we can do certain things; because they’re not reciprocal, it means that we can’t do other things. So, what we can do is put labor conditions in them as eligibility criteria, and we’ve actually put labor in them as both mandatory and discretionary eligibility criteria. So, we can approach labor issues through those trade preference programs on any side, really, that we want. There is a process, also, for raising complaints under the programs, which has been used quite a bit, and I think used most on labor – it’s been used in other areas, too, like intellectual property – where there are petitions filed, there’s a whole process for hearing the petitions, there’s a process with the country, and I actually think that that could be improved, but I also think that it has worked. I think it has worked to bring those issues on the agenda. I think that it has worked as a mechanism. When I was at USTR, I worked on a number of these cases with




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countries, and it was a way of engaging in a real dialogue around critical issues, and it was – as a number of folks have pointed out – a stick/carrot approach, and I do think that that works. I think without that, it’s hard to have those conversations. I think that the Cambodia model that we’ve talked about so much today, too, is also an example of that. I think that worked well because there was a desire on the part of Cambodia to get a quota for apparel at a time where they didn’t have another mechanism for doing that. So, I think if we can think about trade a little bit in terms of that toolkit approach, what can we use it to do, and what can they do, then I think it can be very effective. Now, I think that one of the things that’s been a challenge sometimes with the trade preferences is that they don’t necessarily get at a lot of the issues in-country, even though they have those eligibility criteria. So, it’s hard to go into detail sometimes on some of the rule-of-law issues through a trade preference program, just because it is that one-way access to the U.S. market and doesn’t have the comprehensive framework that a trade agreement would. But, I think that –I would say at this point in time, what we could do is think in a fresh way about the trade preference programs and what they could be useful for. So, because GSP is expiring, this will push this conversation. We have to do something, or the program will lapse. That’s happened before, too, with not very great consequences for anybody because for the companies that use these preferences – and, there’s actually – So, one thing that I wanted to say, too, is that I think the way we talk about these things really is going to matter. We started a process last summer, working with companies – with Gap and Nike, for example – and with a range of business associations, with NGOs, with others, to try to start this thinking again. I’ve been tinkering around for a while about what a new model would look like, and we were looking at what could a new model in the trade preference programs look like. Then, the politics changed, and for me, it made me realize that I had to think about how I was even talking about these things. I’ve been working in trade and development for such a long time that I was naturally thinking from that context, but all of a sudden, I had to talk about it completely differently, and in doing so, I actually felt like it got stronger in some ways than before because what I’ve started thinking is, “How does this reflect back here? How does




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what’s in these programs matter to the United States and matter to other countries, and how do we balance them?” And, one thing that doesn’t get talked about very often is what the benefits are to U.S. jobs and to U.S. small companies in particular, but larger companies as well, of these programs. There’s a huge cost saving. They provide inputs that we do not produce. But, one of the things that has happened over the years is that we haven’t really looked at the programs again in the context of the market. So, there are some things – like footwear, for example – that are statutorily – am I going way too far into the weeds?

Will: Not “way too,” but a little too far. Katrin: Okay. But, footwear is excluded from these programs, and we

don’t really have much of a footwear industry in the United States anymore. So, apparel is largely excluded from the programs, and apparel is such a huge lever for development, like we’ve been talking about.

So, why aren’t we looking at them both in the context of what matters to our companies and what matters for development? Why aren’t we looking – I won’t go into this, but why aren’t we looking at some of the rules around them in the context of how markets work and how the supply chains work? Why aren’t we thinking about how to really bring these eligibility criteria to life? I’d like to say more on that, but I think I’ll stop with that. I think we could couple these programs, also, with some of the things that Molly talked about and others have talked about, some other programs that could really make them work in practice, but we’ve been – as a group – trying to think about this, and we welcome others into this conversation because there really is this opportunity, and doing nothing means probably not something very great. So, I’ll end with that. Sorry for going into the weeds.

Will: No, no. It’s okay. Specifics – Molly and Jon, if you want to add

specifics on what has worked and hasn’t worked? Be brief because we’d like to open it up.

Molly: Absolutely. And, I’ll use the same example for what worked and

what didn’t work. Will: No fair. Molly: It’s nuanced. It’s fair. But, to step out of the Bangladesh discussion




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for a minute and look at Colombia as an example where there was a tremendous amount of domestic opposition to that free trade agreement, in particular from the labor movement because of labor rights violations, because of murders of union leaders, so there’s a lot of interest in that trade agreement. I think what came out of that is really what we’re talking about when we talk about a comprehensive, or a cohesive approach, or a toolbox approach, taking all sorts – every tool that we have at our disposal, working together to address the problems.

So, what we had in Colombia that worked was –first of all, a labor action plan, which – for folks who aren’t familiar with it, in advance of ratification of the trade agreement in our congress, there was a labor action plan that was developed in very close coordination with the Colombian labor movement. So, every major problem in that labor market, every major problem in worker’s rights in Colombia, was essentially spelled out – not in a ton of detail, but on this labor action plan. Here are your problems with impunity. Here are your problems with freedom of association. Here are your problems in your five biggest export sectors, and the contractual agreements that you use to hire workers. So, there was that level of clarity that goes well beyond what’s in a labor chapter about the problems that need to be addressed, and that was done in advance, and in consultation. Then, in terms of the U.S. approach, what worked is that we had the diplomatic approach that I mentioned. So, we had a full-time labor attaché there, who was someone who was seconded from the Department of Labor to the Department of State, someone who’d been working on Colombia labor issues, who knew those issues in detail and was able to be in pretty high-level meetings with the ambassador so that labor wasn’t just a side thing that you do when you have your human rights report due at the end of the year, or a bilateral dialogue, but in discussions on the investment climate, in discussions on the peace process. Labor was a part of it every step of the way because we had someone working on it full-time. You had a Department of Labor program that was working with local legal actors – so, rule-of-law institutes and academics – making sure that as laws were changed in Colombia to comply with this labor action plan, that workers were actually cognizant of the changes, and that they had the means to demand their enforcement. So, they did a ton of strategic litigation, and test cases, and documentation, so it wasn’t just change all the laws on paper and then wish everybody the best of




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luck, but change all the laws on paper, see how that’s actually playing out in reality. And then, you had also – on the U.S. side – a USAID development focus that listed labor rights as one of the primary development challenges for the country. So, it wasn’t just improve the business climate, it wasn’t just increase investment, but it was explicitly in the USAID’s mission strategy for the country – labor rights. So, you had this really comprehensive approach to labor rights in Colombia and making that trade agreement more than just the labor chapter. So, what didn’t work in the same example? I think – just to mention this a little bit – a similar dynamic with Haiti. When you put all of these things out here as carrots, you get so frightened of them not working and having to pull them off the table that you’re not going to admit it when they don’t. So, the problem, for example, with the labor action plan is that it was timebound. It was essentially, “Here’s the labor action plan. It’s a massive and complete agenda, and we’re going to accomplish it in one year.” So, it’s sort of like you’re going to go into a boxing match and you’re going to tell your opponent, “I’m going to fight the first three rounds, and then I’ll get some water and stop.” So, obviously, you’re going to get your butt kicked in the fourth round. What happened was you had a lot of progress, a lot of momentum, and once that timeline had passed, you had a tremendous amount of backsliding. That’s the problem that we’re still in there, is that there’s a trade complaint from the AFL-CIO and from labor organizations in that country saying, “Look, these were all the things you needed to fix. You started to fix them, you changed the laws, you made some progress, and then you backed off a year later, and here we are, seeing many of the same things resurface.” So, I think that’s when you see this harder conditionality of trade agreements and the labor chapter coming into play. It could still be a success story, but I think in that one country, you have encapsulated both approaches that work, but also, things that are really problematic if they don’t.

Will: Jon, you want to add? Jon: I’m just going to take an instance of trade policy, but quickly take

it to the present, and out of the trade bucket to what we’ve been talking about all day, to just put a name and an example to an emerging model. You’ve heard already referenced, briefly, the




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U.S.-Cambodia garment and textile agreement. It was a sort of trade preference program in 1998. It is, in essence, the U.S. offering greater market access in exchange for measurable improvements in labor standards. It was an enlightened experiment at the time, and we’ve had years to assess how it’s doing.

These things are never perfect, but if you fast-forward, 1). We had our first Better Work program years after that. You had – even with the – this was Jill Tucker running the shows somewhere at Better Factories Cambodia. You had major brands staying with Cambodia as a sourcing destination, even after 1). The expiration of the multifiber agreement in 2005, and when China and Bangladesh and others, of course, were going to overwhelm Cambodia as a source. If you’re playing the low-cost road, those were roads better paved than Cambodia. You had massive proliferation of unions in a short amount of time, mostly women-led. Unions – at the risk of having too many, you already had this flourishing of the trade union movement in civil society in Cambodia. It’s a cautionary tale if you take it to the present, but think of it this way: In an instance where –unions – their leaders who are in the streets, challenging the fact that minimum wage was held too low by the Cambodian government, not exactly a democracy, and not exactly a transparent process to get to an evaluation of wages, then folks were in the streets, four union leaders were killed in the process as what you could call labor rights or human rights defenders, and at that point – and, maybe others would know this better in the room – of course, unions in the United States, worker’s rights NGOs, ILRF, for example, are appealing to brands to get involved, to have something to say if you’re sourcing from there. This is the catch – and I think this what this room enables – that brands were able to speak up. The Ethical Trade Initiative, Fair Labor Association, aggregations of multinational buyers then addressing this directly, publicly, privately, as appropriate, to the Cambodian government, in ways that even embassy said they weren’t having any luck. This is a pretty ruthless regime. But, there was a budge. Minimum wage did increase. Nowhere as much as workers wanted, and nothing to bring those four women back, but there’s something going on there about civil society, unions, and brands finding common cause to push on the government, whether it’s the U.S. government or the Cambodian




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government. What you’re seeing there is a recognition. We’re going back to – this was all a big workaround for the last 25 years. The nation-states have to take some responsibility. The labor ministries can’t have underpaid or corrupt inspectorates. We have to build those institutions, and that’s what Better Work has often been about. We’ll see if exit is enabled to the point where, then, ministries of labor – like in Bangladesh – could run with it responsibly. But otherwise, we’re all doing – we’re all trying to –duplicate what ministries of labor were there in the first part to do. At the same time, we know that we’ve learned a lot in this era of corporate social responsibility, and there is something to aspire to in the private realm. Don’t purely leave the state to it. It probably won’t do the whole thing. But, what about this private, enforceable co-governance that we’ve been talking about all day, about models where workers are actually at the center of some design and governance? You’ve heard about it in the Accord, you’ve heard about it with ACT in Cambodia, you’ve heard about in other industries, even, like Fair Food and the Olmofley Workers in the tomato fields of Florida. You’ve heard about it in Indonesia with the FOA protocol. There is a growing list of this new model of the private evolution of enforceable, transparent, co-governed contract to make sure labor rights are respected, and with that, bringing the government back into this – the labor ministry that shouldn’t be let off the hook, the institutions that need to be built, and I would think business in civil society and unions have a vested interest in seeing both of those people.

Will: So, we have a good half hour, and we have a lot of people in the

room, and hands are already going up. Just to get the blood flowing, let’s have a nice round of applause for our panel. [Applause] Really terrific. Thank you very much. You’ll be weighing in again, I promise you. I think you did great on that last round, of what has worked and what hasn’t worked. Surprisingly, the emphasis was on what has worked. I was surprised to hear that it was not just critique. So, I won’t repeat it, I won’t try to summarize it, we’ll turn right to you, and hands are up. Yes, Jennifer?

Participant: I’ve got the mic. [Laughter] This doesn’t have a question mark at

the end. I feel like we’re at a “what is old is new again” situation, that there were two fundamental errors made in the last 100 years in trade policy that leave us where we are today. The one is the




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original sin of the formation of the World Trade Organization, when labor rights and environment were left out.

And, that if we had – that happened because developing countries overplayed their hand, and now they’re living with the consequences, but if we had labor rights and environmental rights built into the WTO, we’d negotiated them on a multilateral basis, then grievances around those issues would be in the dispute resolution mechanism, which is a very – which is the only thing about the WTO that actually works well. That’s No. 1. The second is that at the beginning of the 20th century in Europe – and, it started in Belgium – they struck what was called the Labor Compact. The Labor Compact, basically, was a deal. It was an exchange of free international trade and goods in exchange for protections of labor. It’s this fundamental deal that was struck 100 years ago that made it possible for the Europeans to think that trade is great. And so, a lot of – and, it seems like what’s happened to us in the U.S. is because we never struck the labor compact. We never made this fundamental deal. So, all the concerns about trade that we have, and its consequences for a domestic labor market, get diverted onto developing country labor markets. So, those are the two – fix those two problems, and we’re back in business.

Will: Great points. Pass the mic over there. Yes – we’re going to just

collect a lot of comments. Go ahead. If you can, keep it brief, please.

Participant: This is a question for anybody who wants to answer it, but I

wanted to push a little bit on the distinction – I think Katrin made – between trade agreements and trade preference programs, and think about trade preference programs that are inside trade agreements.

So, I’m thinking of two examples that are both relevant for the question of labor standards in apparel related to FTAs. One was the side agreement with Nicaragua in the context of the CAFTA. As you may know, Nicaragua got some trade preferences. Particularly, they got a TPL, which allowed them basically to have a carve-out to the rules of origin in the trade agreement. The other example is a similar mechanism in the U.S.-Bahrain free trade agreement. Now, I bring this up because brands build supply chains around those preferences, and so became very invested in their extension




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because they were basically timebound. And yet, when it came time to discuss a possible extension of those preferences, it didn’t seem like there was a conversation going on, even though at the time, Better Work was getting underway in Nicaragua and there were some issues about buy-in. So, my question is what would have made that possible, why didn’t it happen, and what kind of barriers might explain that apparent lack of communication?

Will: Over to here. Participant: Two quick questions. First, I’d like to ask the panelists to give their

sense of whether it’s good or bad for American workers when Mr. Trump decided to pull out entirely from TPP, and second, I’d like to ask you to look into your crystal ball. Will whatever President Trump does on NAFTA help American workers, or do you think it will merely be window dressing?

Will: Can you pass the mic three people down there, to this gentleman?

There you go. And then, you’re next. Participant: Hi. Quick question. We’re talking about carrot-and-stick approach

quite a bit. While I’m not very familiar with GSP Plus or GSP as far as the state is concerned, I’m quite familiar with it from a European context. If I just pick a country where I really think that the carrot approach is currently working well, it’s Sri Lanka. They came out of a terrible civil war, kind of a terrorist organization really, beating them. When I look at the development that the Sirisena administration has gone through after the departure of Rajapaksa, the outset of regaining it and – if everything goes well, in 18 days, they will have it again.

What can you learn from it? My specific question is why is GSP and the United States excluding garments and textiles, for example? They could really play an important role to further intensive such an approach, and really, it could make quite a difference. Sri Lanka really knows – the administration knows – if they screw up with the Europeans and do not stick to the human rights deliverables they clearly committed to, it will be quicker gone than they ever got it.

Will: Great question. You have a mic? Participant: I do. Let me preface my remarks by saying that we are as

supportive of free trade as probably any company would be on a global scale, and we’re very supportive of TPP and the other things that were done. That said, I feel like we’re ignoring the gorilla in




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the room.

Really, the gorilla in the room – and, the reason that we have the president that we have today – is because for the last 30 years, in trade negotiations, the discussion of the impact on the U.S. worker and the U.S. job market was a side thought, rarely done at the end of an agreement, and in many cases, known to be negative, but “not so bad.” And, that’s caused – I think you pointed out earlier – 40 years of stagnation of wages for working people in this country and a complete backlash, finally, of what the electorate is feeling, whether it was Sanders, and Clinton started to appeal to it, and Trump really won on it. So, my question is a lot of what we’re talking about is the details and the deeds that we’ve done over the last 30 years that worked or didn’t work, but the reality is from an American political perspective under this president, it didn’t work. We had legal framework. It’s called the WTO. China completely abused it. Those of us who do a lot of business there have to recognize it. So, no matter what the rules were, China was going to go around it. In, I believe, 15 of the 20 free trade agreements that we have, we went from a surplus to a big deficit in all 15 agreements of 20, and for the biggest trade agreements, the deficit is under the WTO rules. So, my question to the panel is what do we really do about it? Let’s not talk about whether we do Cambodia, or Nicaragua, or whatever. We have an electorate – an American public – and maybe some European portions – that don’t believe any longer that this stuff makes sense. How do you change that perception?

Will: We’re getting there. Any other comments? Let’s take one more

comment from the audience, then we’ll go back to the panel. Any other comments or questions? Okay. We have five fair – there you go. Thank you. No. 6, and then we’ll turn back to the panel.

Participant: Maybe just to add onto – one of the comments earlier made was

about the equal footing of investors versus workers in the international trade and investment infrastructure. I wonder if you could comment a little bit more – any of the panelists – about the investor/state dispute settlement mechanism, which does allow for investors to sue governments, and often has either a direct impact on law that protect workers or the environment – or at least has a chilling effect – and if, in your views, you think it’s better to make that system more accessible for workers or communities or get rid of it.




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This kind of relates to the point made earlier about leaving social and environmental aspects out of the WTO, which has its own dispute settlement system, but given we have the ISDS, is it wholly broken in terms of developing a sustainable model and should be gotten rid of, or do we use that to change it and make it accessible for workers and communities. Thanks.

Will: Terrific. May I ask you, Eric, to start again? I don’t know why.

Those are really six great comments. Eric: These are six amazing questions, and trying to organize responses

in a coherent way is going to be tough, but let me throw back at a few of them. I think the first wasn’t actually a question, but I think it’s worth a response. The original sin was actually two parts. It was 1994 when the WTO was back from negotiation, then it was 1999 with the Seattle Ministerial, where there was another attempt. I almost never get through a talk without invoking the fact that I worked for Pat Moynihan from 1993 to 1997, and a lot of that involved several of the issues that came into play here.

Why not worker rights? After all, the International Trade Organization, which is what was supposed to happen before it fell back to the GAT in the 1940s, had a worker rights component that largely went away because of opposition in the U.S. So, he was pushing very hard through just some hortatory language in 1994 that couldn’t even be included in implementing legislation. There’s a long and ugly history, but I couldn’t agree more that there was an opportunity missed that, in hindsight, when China’s entry was negotiated back-to-back with the Seattle Ministerial, it was a really a double whammy for that whole set of issues. That ties in a little with some of Rick’s indictment about trade failing to address workers here. We could talk all day about some of the issues of what’s gone wrong there, but I think the two tie together a bit. On a couple of the other points made about –I’ll save for Katrin to talk about the carrot and stick, GSP, and worker rights. On TPP pullout and NAFTA renegotiation, I kind of think about the two together. I’m not here to defend TPP as a whole. As I mentioned, I think the labor provisions that were negotiated in it were quite good, and so far an advancement of what had been there 25 years before in NAFTA. Perhaps one thing that might be done in terms of a renegotiation of NAFTA would be to take at least that remnant of TPP and




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recognize – look, Mexico was going to be part of TPP, and while there wasn’t a consistency plan with Mexico, unlike with Malaysia, Vietnam, and Brunei, Mexico has finally – after decades of effort – made some labor reforms with more to go, and so, there may be an opportunity to take the stronger provisions of the TPP labor chapter and build them into a renegotiated NAFTA, at least with respect to that part of NAFTA. I’m oversimplifying, but that’s the quick answer. Lastly on ISDS, and then I’ll stop. There are really a couple of options here. I have debated ISDS – investor/state dispute settlement – with my friends in the trade community for years. I was on the Hill in 1992, 1993, when it was a small part – almost an unnoticed part of NAFTA Chapter 11 that was slid in. No one ever anticipated it – there was no implementing legislation – no one ever anticipated it mushrooming into what’s happened in these later agreements. The choice, really, is do you ratchet up the rights of workers to an equal level so that workers would have their own private right of action like investors have? That would at least level the playing field for worker rights and investor rights. Or, do you say enough is enough in terms of the implications of ISDS, potentially, for domestic regulatory measures? That’s something that labor and civil society need to think about. Those are really the two options. I have my own thoughts, but I’ll stop with that.

Will: Jon. I’m going to ask Jon to go next because he’s been signaling to

me. Jon, and then Katrin. [Crosstalk] Katrin: You can answer all the hard questions. Jon: I’m going to take the last two, if I may. Will: Go ahead. The gorilla in the room and the ISDS. Jon: It’s a luxury to be selected. So, Rick, you’re absolutely right that

there was never an honest, full-fledged explanation of what was going on. I think the closest in the last 30 years that we had to it was President Clinton becoming a perceived explainer-in-chief about some of the forces of globalization, but looking back, it was too rosy a picture, and I don’t think it was clearly connected between dots of what was happening on Main Street, with factories gradually shuttering.




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With NAFTA, I think, it was, in the end, not a full picture of what was going on in communities, and I think –certainly in the President Bush era, and Obama, I think he – he had more opportunities. The era of inequality became clearer and more starkly focused following the financial crisis, and it was a lot about explaining that and pursuing Wall Street reform, and maybe less about finding a new way in the real economy, so to speak, to shore up a case for what’s really going on here, and yet to have been building a case for the Trans-Pacific Partnership in his second term. I think that was the slow-moving trouble, the gradual hollowing out of the middle class, and not enough tools, and an intransigent Republican Congress for much of that time, to enable the social contract to be put back in balance in the United States. On the international front, Rana Plaza wasn’t a slow-moving tragedy like you’d see on Main Street; it was an immediate one. That’s where I feel there was a tremendous missed opportunity in terms of leadership, and certainly not at the level of Obama administration officials like Eric and others, who were testing the art of the possible to see what could be done, a sustainability compact, GSP, revoking of certain preferences, trying to convene and – to some modest degree – enable the accord to come together, although not an easy enough preference for one of the other. But, wasn’t that time for a plan in the drawer to come out, to say that we actually need to explain what just happened there? Isn’t it the same – it’s a blight on globalization as an enterprise the same way there’s a slow-moving blight that’s happening all across America. And then, we have had something to talk about and maybe broken through, but it seemed like at that point, Bangladesh is not in the TPP, we’re going to deal with it this way, and it didn’t rise to the level of presidential leadership, speeches, et cetera. That was a moment where at least President Clinton convened to create multi-stakeholder conversations that would lead to something, and maybe President Hillary Clinton would have followed on this and we would have seen a re-energized cross-sector action agenda on this, but that’s just people’s dreams now. On the ISDS, very quickly, that’s as wonky as it gets, but investor/state dispute settlement mechanisms are a tremendous privileging of investor rights over not only worker’s rights, but the rights of communities that are affected by foreign direct investments. Think of the indigenous community where the mine




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will be placed or the dam will be built. These are all hotly contested zones on trade policy throughout the developing world wherever this mechanism is present. It’s the specific area where Open Society Foundations is funding groups to oppose the insertion of it. It’s that egregious because it actually unravels democratically enacted legislation and regulations in places like Mexico or Malaysia, and privileges the international investors’ rights over those public-interest regulations, including worker rights. So, other than that, we’ll just look for good ideas about other specifics, but that one, we feel confident on nonexistent future trade agreements.

Will: Katrin again, briefly, and Molly. Katrin: Of course. Just a couple of observations. 1). I think it is a shame

that labor is not included in the WTO, and I know that there have been attempts to put it back in. I do tend to think, though, if you look at the way that some of the environmental issues are getting more and more linked into the WTO, that we shouldn’t give up.

One of the other things that I think is kind of a shame about the system is the way it’s dealt with development. It was so heavily focused on market access that development almost became kind of a defensive position for developing countries and developed countries alike, that we didn’t really look at some of the institutional issues that are involved. So, that’s a much larger conversation, which I’m happy to have offline, but I think that would have been good, too, to have a different approach to how we think about development, and having these systems in place be integral to development rather than just being defensive on market access. On the trade preference programs – so, the United States doesn’t have GSP Plus, and I think that’s one of the things that we should think about, at least, at this stage. We have excluded these products, as I mentioned before, from most of our programs, except the ones that are more geographically limited, like – AGOA and Haiti do include a pair, but most of our programs don’t have that same kind of coverage. So, I think we could learn from what Europe has done, too, and it would be great if there were more of an exchange in that – I’ve seen it in Sri Lanka firsthand, the impact that this has, and I think that if we could tie, perhaps, some momentum on these things to greater preferences, it might really have an impact.




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ISDS, I think, has been covered quite a bit, but the two things that I’ll just mention briefly is that 1). There is some study of where those provisions have been used. Jon was good to point out why they’re an issue, but where they’ve been used to advance human rights concerns. Again, as we think about how to wade through all of this, and what should stay and what should go, we should also think about how we can use some of these things more effectively and differently. I’m happy to pass some of that on. One of my students this semester wrote a paper on the fact that small companies can’t use them. So, I think there are all kinds of issues inherent to some of these things, and really, making the process more democratic would be something that I would also advocate for. And then, to go to the question about the trade programs, it’s very interesting when you put it that way, too, and I guess just a couple of quick observations – again, some of this could be a much longer conversation, but I won’t do that, I promise. No. 1 is that you can customize some of these tools. That’s definitely an option. There are a lot of examples for that. We don’t talk about that enough. We tend to think that there’s one way of doing things. No. 2 is that I think it’s a different process to implement the agreements, like I said before, than it is to negotiate them, so we probably need some better tools for how to implement them. The work that my organization does is a lot of that, and we’ve got a lot of case studies and examples, and I won’t go into any of those, but I would love to have more of an exchange with others who are doing that kind of work because I think it’s a really good way of thinking through what has worked, and what hasn’t worked, and what we need to be looking at that we might not be thinking about. And then, I guess the last thing that I want to say, too, is on the elephant or gorilla in the room. I think you’re right, and I’m not sure that there’s a perfect answer to that, except that – maybe this is something that Molly can pick up on – we talk about trade adjustment assistance, but we’ve put hardly any money into it. We don’t do a good job of dealing with the adjustments on trade, and I think trade is this inherent tension between what is and what’s happening, and we just don’t do a good job of that. So, we have other tools in the U.S., too, like the Small Business Administration that helps entrepreneurs and small businesses, and we hardly link those things to trade. TPP started to go there, but in




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a very –tepid way. My last point on TPP is that if I were to read the tea leaves, I’d think some of what was in TPP is going to make its way into the conversation, even though TPP became this lightning rod for so many things. I’ll end with that.

Will: Good. Molly, last comment? Molly: Yes, last comment and last word. So, I will be very brief. On the

question of TPP withdrawal, whether that’s good or bad for workers, NAFTA renegotiation or whatever it is, whether it’s good or bad for workers – I think a lot of workers in the U.S. were very pleased to hear that and are expecting good things from it. I think that’s not what we’re looking at. We really have no idea what the alternative is going to look like, and I’d be very surprised if it’s better for workers.

I think the question about should we have parity between worker rights issues and investor rights – I’ll just say what Jonathan said; I agree with that completely, but I don’t see that coming out, and I certainly see no indication that that’s the direction we’re going to go on these trade agreements. And then, elephant or gorilla in the room, I think all of these – Eric mentioned it at the outset, Katrin just mentioned them then – the fact that U.S. workers have been an afterthought to U.S. trade debates, that we haven’t thought about the impacts on different types of workers in different sectors, except to just do a Band-Aid fix at the end and say, “We’re passing this; here’s something for you” – that’s part of the problem. Another big piece of the problem – and, I know this is not why we’re here today, but I’m a union organizer and always will be – is the question of sustained attacks on worker rights and worker voice in the U.S. over the last several decades. You cannot continue to attack labor movements, implement right-to-work laws, and expect the jobs at the end of the road to be good ones. Whether they’re an entirely new industry – maybe manufacturing has left, and maybe trade adjustment assistance and reeducation programs for those displaced workers would have been helpful, but if you’re looking at – we heard Amazon mentioned – if we’re looking at low-wage order fulfillment workers in a warehouse, if we’re looking at gig drivers in Ubers, the question of domestic labor policy – not the subject of this conference – has a huge impact.




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So, we can’t continue to attack worker’s voice, worker’s right to organize, and unions in the U.S. and say that we’re going to fix that with trade adjustment assistance. These are two sides of the same coin, and looking at the jobs that we have, looking at the evolution of our labor market, but making sure that those are decent jobs, that we have a social safety net, and that we have a voice at work for workers is the part of it that, while not on our agenda here, we absolutely can’t ignore.

Will: Thank you, Molly. I just wanted to say in closing – will Trump

help workers or no? I think the indications are that it’s going to be very difficult, for reasons Molly just laid out – immigration policy, health insurance policy, the tax – one-page tax proposal we saw is extremely regressive. So, that’s helped by the fact that we have full employment, and he may run an enormous budget deficit, and that’s from a Keynesian perspective, a stimulus to the economy. But, short of that, it’s going to be difficult.

I just didn’t want to leave out one group that’s been ignored. I’m so happy because the economists have been ignored. The economists have had some responsibility here, just to close – as an economist – we’ve advocated free trade for decades, if not centuries, and we’ve failed to advocate the part of the theorem of free trade that is required to make free trade really socially beneficial, which is compensating winners, compensating losers. As a number of the panelists have pointed out, this has not taken place in the U.S. political economy, and I think economists actually have some responsibility for that. We advocated for one part of the theorem without remembering the other part. On that very technical note, can we thank our panel again? Thank you very much.

Anna: So, thank you all, and thank you all. I think it’s been a fascinating

day, and I really appreciate not only all of the moderators, panelists, and presenters who have engaged with each other, but all of you who’ve engaged with us. This is our first conference; we certainly hope it’s not our last conference. We hope to hear from you suggestions about how you can engage with us because we really want this conversation to go on, and your voices have been really helpful in making us think about how we can address some of these things differently. So, I want to thank everybody who’s done that.

I want to just make a couple – we are going to share the PowerPoints on our website so that if you want the presentations,




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you can have them. We will reach out to all of you to see whether you’re willing to share your contact with others, and then we will share a list of contact information so that you can get connected with each other. My email address is [email protected]. If you want to send me direct comments, that would be great as well. I have a Gmail address – you can just come find me to do that. We have drinks out there, so anybody who needs a drink, that would be great. But, in the meantime, I wanted to thank a few people. Claire is here someplace, I hope. Claire, where are you? She’s back here someplace. She has been a mainstay – there you are. Come wave. Come up. [Applause] You’ve all heard from her many times. Without her, this conference would not have happened. I also wanted to – Kristin Kim is here as well. She’s a volunteer ILR grad who now works at Gap and volunteered when she heard the conference was going on because she wanted to be helpful, and has been here, too. And then, I wanted to thank all the panelists and all of you. So, please join us in a drink. Send us your comments, your suggestions for more collaborations, and ways that we could be more effective as we keep this conversation going in new kinds of ways. Thank you. [Applause] I forgot one thing: The terrific wait staff and the people who have been taking care of us all day long have been incredible for us. And, to the Prince George Ballroom, the people who have been putting something like this together so that we can not only learn together, but actually give something back to the community all at the same time. Bye!

[End of Audio] Duration: 95 minutes


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