Opinion of the European Economic and Social Committee on The Social Dimension of Globalisation — the EU's policy contribution on extending the benefits to all (COM(2004) 383 final)
Date: 2005-03-09
Institutions: European Economic and Social Committee
Subjects: EU policy, cooperation policy, economic and social cohesion, globalisation, social development, social impact, the EU's international role

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Official Journal of the European Union

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Opinion of the European Economic and Social Committee on The Social Dimension of Globalisa-
tion — the EU's policy contribution on extending the benefits to all

(COM(2004) 383 final)

(2005/C 234/10)

On 26 May 2004 the Commission decided to consult the European Economic and Social Committee,
under Article 262 of the Treaty establishing the European Community, on The Social Dimension of Globa-
lisation — the EU's policy contribution on extending the benefits to all.

The Section for External Relations, which was responsible for preparing the Committee's work on the
subject, adopted its opinion on 15 February 2005. The rapporteurs were Mr Tom Etty and
Ms Renate Hornung-Draus.

At its 415th plenary session of 9 and 10 March 2005 (meeting of 9 March), the European Economic and
Social Committee adopted the following opinion by 59 votes to 15, with 2 abstentions.

1. General comments

— solid institutional structures,

The European Economic and Social Committee

— effective public services and services of general interest,

welcomes the Commission's Communication on Social
1.1
Dimension of Globalisation COM (2004) 383 final — the EU's
policy contribution on extending the benefits to all — elabor-
ating on the specific role that the European Union can play in
making globalisation a fair process for all;

— strong social and civil dialogue,

— investment in human capital, and

1.2
believes that the European Union can make a significant
contribution to shape the social dimension of globalisation due
to its own history and experience of substantial and successful
the latter
regional
provides for a model which can be followed worldwide in all
details;

integration, while not

suggesting that

1.3
takes into account the outcomes of a special hearing
organised on 17 December 2004. Experts from the ILO, the
World Bank and the IMF were present, to give their perspec-
tives on the role of their respective organisations with regard to
the social dimension of globalisation (1). A report from this
special sitting as well as the presentations from the speakers
will be published by the EESC;

— quality of employment;

1.5
agrees with the European Commission that the global
market economy has generated many significant benefits and
has great productive potential in terms of economic, political
and social development and has created more and better jobs;
accepting also the findings of the World Commission on the
Social Dimension of Globalisation (WCSDG)
that market-
opening measures and financial and economic considerations
have predominated, neglecting their social consequences so far
and that these rules and policies are the outcome of a system
of global governance insufficiently responsive to the interests
and needs of the less powerful players;

1.4
underlines the importance of a values-based approach to
globalisation in terms of those concepts that constitute the
essence of a social market economy. Such aspects are individual
responsibility, respect for the rule of law, respect for the indivi-
integrity, human dignity,
dual and property,
equality and freedom, fundamental trade union and workers
rights, sound industrial relations, general access to education
and training, irrespective of gender and a high level of social
the EU
protection. These underpin the key elements of
approach to globalisation:

transparency,

(1) The following experts participated in the hearing :
— Mr Gerry Rodgers, Director Integration, ILO
— Mr Dominique Peccoud, Special Adviser , External relations and

Partnerships, ILO

— Ms Haleh Bridi, Special representative to the European Institu-

tions, World Bank Office

refers to the recent study of the World Bank (2) which
1.6
shows that the opening of markets and economic integration
have contributed to substantial economic progress for devel-
oping countries that have managed to enter global manufacture
and service markets. In combination with another World Bank
study of February 2003, which relates the reduction of income
inequalities and wage discrimination as well as improved
economic performance to high unionisation rates and sound
industrial relations (3),
this study underlines the case for a
balance between economic and social values which the
WCSDG is making when addressing the issue of poverty in a
globalising world;

(2) Globalisation, Growth and Poverty: Building an Inclusive World

Economy, World Bank, Washington, 2002

(3) Unions and Collective Bargaining. Economic effects in a global

— Mr Pierre Dhonte, Special representative to the EU, IMF

environment, World Bank, Washington, 2003

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1.7
states that although globalisation has generated many
positive effects, poverty which can be directly linked with the
increase of the informal economy both as a cause and a result
of it, remains one of the most serious challenges in the world;

in employment, education and health, and to growing inequi-
ties in all countries,
If the EU
wants to play that role effectively, however, the Commission as
well as the Member States will have to look carefully at their
own policy coherence in relevant areas.

including the industrialised.

states that problems in regard to poverty remain particu-
1.8
larly present where countries are excluded from globalisation:
the two billion people below the poverty line worldwide live
mainly in countries that do not participate actively in globalisa-
tion and risk remaining marginalised from the world economy;

1.9
affirms that also developing countries which can be clas-
sified as emerging market economies with high economic
growth have problems and that poverty can only be combated,
when inequalities are reduced and a competitive formal
economy and effective social policies are put in place;

endorses one of

the key messages of

1.10
the WCSDG
report, that the starting point for change is the national level:
social development must be a bottom-up approach and all
institutions — national and local — have an extremely impor-
tant function in facilitating integration and ensuring that more
people can share the benefits of globalisation and will be
protected from its negative effects. It is of crucial importance
for a fair sharing of the fruits of globalisation that social and
civil dialogue based on strong, representative, independent and
responsible actors is developed in all countries and regions;

good local, national, regional, and global governance,
1.11
based on the Universal Declaration of Human Rights, and the
ILO Core labour standards as well as the Declaration on funda-
mental principles and rights at work is an important basis for
trade liberalisation, global growth and development. The EESC
supports the EU in encouraging a discussion at the interna-
tional
level on establishing a basis for world wide environ-
mental standards.

2.2
The European Commission has developed a number of
tools which are in the view of the EESC suitable to achieve
progress in the social dimension of globalisation. Such tools are
the bilateral and regional agreements, development and external
cooperation, trade policy, market access for developing coun-
tries, promotion of private initiatives for social development,
and the promotion of governance at
level. The
Committee refers to the latest Opinions it has delivered on all
of these instruments (see appendix 2). While the Committee
shares the views of the Commission on the potential of these
instruments, it wishes to put on record its preference for multi-
the EU should
lateral agreements. The EESC stresses that
continue to put incentives in place to further promote south-
south trade.

the global

2.3
Bilateral and regional agreements can help to drive
development in the field of good governance, the rule of law,
human rights and democratisation. The EESC supports the
negotiation of bilateral/regional agreements between the EU
and its trading partners provided they are based on political
and economic, social and environmental considerations and
that they build on and/or complement the multilateral trading
system. Priority should be given to achievable agreements,
which promise a large volume of trade and significant market
access benefits (goods, services and investment). All such agree-
ments should comply fully with WTO provisions. The EESC
underlines the importance of discussing and monitoring these
agreements with regard to their impact on the social dimension
and welcomes the idea of inviting international organisations
such as the ILO to participate in such a process.

2. Specific comments: the EU-policy contribution

2.1
The EESC believes that the EU can play a key role in
supporting and promoting the social dimension of globalisa-
tion. It can actively engage in and pursue a policy which can
convince governments of the necessity of an equitable legal and
judicial framework, of respect for property rights, of cost-effec-
tive dispute resolution and contract enforcement, of access to
education and training, of appropriately regulated financial
institutions and access to them, of an equitable tax system and
of the recognition of the central role of human development.
The pursuit of these goals should, however, not lead to growth
of trade with no impact (or even a negative impact) on sustain-
able development, to liberalisation of
financial markets not
accompanied by balanced fiscal and social regulation, to unfair
conditions governing structural adjustments and restructuring

Instruments

In this connection the Committee notes with interest
2.3.1
the Commission's intention to set up new joint mechanisms in
bilateral agreements to discuss and monitor relevant aspects for
the social dimension of globalisation in which other interna-
tional organisations could be invited to participate (‘Joint bilat-
eral observatories’).
like these can effectively
demonstrate the responsible role of free and independent social
partners as well as other relevant civil society organisations,
like farmers' organisations, consumers and environmental asso-
ciations etc. and the EESC which is incorporating them sees a
role for itself in them, drawing on its experience in organising
civil society partnerships across borders including in developing
countries, particularly in the context of Mercosur, ACP and
Euromed (4).

(4) The EESC has a structure of follow-up groups, Joint consultative
committees, a Round Table and contact groups with different
geographical regions of the world.

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2.4
The EESC is of the opinion that special emphasis should
be given to the ‘European Neighbourhood Policy’ — it believes
that this approach to enhance the relations with the eastern
and southern neighbouring countries of the EU can contribute
significantly to social development
if
regional development, employment and social policy are part
of such cooperation. Experience from cooperation with candi-
date Member States in pre-enlargement periods of the EU have
shown certain positive effects in accession countries.

in these countries,

2.5
The promotion of human rights (including employers' as
well as workers' and trade union rights as established in ILO
Conventions 87 and 98) and democratisation in third countries
are fundamental issues in order to bring forward development
and democracy. There exists a strong linkage between good
governance, including the fight against corruption, the rule of
law, the protection of human rights and fundamental freedoms
and the quality of justice. In this context the EESC recalls that
human rights' treaties are agreements between states. The obli-
gations they create lie with states in the first instance. The
European Commission should encourage Member States to
fully respect these obligations and engage within the interna-
tional dialogue to increase awareness of the duties of the states
and remind them of their respective responsibilities for social
development. Once implemented in national
legislation or
other relevant national regulations, international norms become
binding on private legal entities, i.e. on citizens and companies.

These priorities should also apply for external coopera-
2.6
tion and development assistance:
the
national level is one of the key messages of the WCSDG. The
EESC believes that it is important to focus on single issues
within a coherent overall development policy.

that change starts at

Such a priority issue could be decent work (5),which
2.6.1
should include the development of an integrated employment
policy to generate productive, sustainable employment,
to
match the skills of people to current and emerging job require-
ments and to improve working conditions, and raise living
standards. Such policies should lead to more productive and
better
jobs in the economy, move the unemployed into
employment, and focus public and private investment as well
as international assistance in the most productive areas.

2.6.3
Finally, the protection of social economy organisations
like e.g. cooperatives, which combine the market approach and
social considerations and which act as generators of both
economic and social wealth, should be a priority in cooperation
with and assistance to developing countries.

2.7 Migration policies which respond to changing patterns
and current realities in the labour market need to be devised, in
a rights-based multilateral framework, taking into consideration
the International Convention of the United Nations on the
Protection of the rights of all migrant workers and members of
their families, as well as the linkages between economic, social,
political, trade,
labour, health, cultural, security and foreign
policies and development aspects. The EESC shares the opinion
of
the United Nations secretary-general, who stated at a
meeting with the European Parliament in January 2004 that
‘only through cooperation –- bilateral, regional and global -–
can we build the partnerships between receiver and sender
countries that are in the interests of both; explore innovations
to make migration a driver of development; fight smugglers
and traffickers effectively; and agree on common standards for
the treatment of immigrants and the management of migra-
tion’.

trade is

International

increasingly important

2.8
to all
economies and can be key to alleviating poverty. The lesson
from some of those developing countries that have developed
competitiveness in manufacturing is that a pro-active export-
led strategy through developing comparative advantages on the
basis of quality and not of low wages is vital for building up
new export capabilities. However, in order to succeed there has
to be a parallel process of strategic integration into the world
economy geared to supporting national development priorities,
including local development initiatives which are particularly
important and which therefore should be promoted. This
process must have a social dimension. In this context, special
attention should be paid to cases of exploitation of (women)
workers in a majority of Export Processing Zones (EPZ). The
EESC thinks that a coordinated effort should be made by rele-
vant international organisations to put an end to the abuses of
workers' rights in these EPZ. The European Commission as well
as the EU member states should actively support such efforts.

another

Education should be

2.6.2
field of priority:
matching education to labour market needs and providing
people with the requisite basic knowledge and skills. Business
has a crucial role to play in helping to shape, in a setting that
involves social partners and governments, policies and to
provide insight into what are the probable skills requirements
of the economy in the short, medium and long term.

(5) Cf.: ‘Decent work’, ILO

(GSP) but

2.9
EU trade/investment and development policies should be
fully supportive of and integrated into EU global policy objec-
tives. The EESC is in favour of the objectives of the EU General-
raises the question
ised System of Preferences
whether the incentive arrangements (environmental, social and
anti-drug regime) included in it impose too much bureaucracy
on the importer and thus are not extensively used by those
poor countries and small companies which are supposed to be
the main beneficiaries. The EESC encourages the European
Commission to focus on the promotion of ratification as well
as implementation in law and practice of the ILO core labour
standards by the beneficiary countries and to include in the

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2005 review measures of how to maximise the benefits of this
to recipients. The review should be done with the full involve-
ment of the social partners and other relevant civil society
organisations.

3. Conclusions and recommendations: The way forward

2.10 With regard to the OECD Guidelines for Multinational
Enterprises the EESC recommends that the European Commis-
sion initiate an awareness-raising campaign in order to make
this important and useful instrument better known to compa-
nies and their European Works Councils. Its non-binding char-
acter should be maintained, but governments which are party
to it should continue to promote the Guidelines and the adher-
ence of multinational companies to them. Efforts should be
made to prevent that a linkage to trade agreements with third
states might be interpreted as a new form of protectionism.
The Commission should support OECD efforts to promote the
respect by non-OECD members of the Guidelines. The same
considerations apply to the ILO Tripartite Declaration of Princi-
ples concerning Multinational Enterprises and Social Policy.

2.11 With regard to the promotion of private and voluntary
initiatives for social development, the EESC believes that busi-
ness can play a supporting role in bringing social development
forward. Corporate Social Responsibility (CSR) as a concept
describes how national and multinational companies transpose
the concept of sustainability into their business practices. The
EESC in this context refers to its opinion on the Green Paper
Promoting a European framework for Corporate Social Respon-
sibility (CES 355/2002). Corporate Social Responsibility is not
just about creating and safeguarding employment; it is about
developing better jobs with adequate health and safety at work,
taking needs of people with disabilities into account and
promoting a culture of lifelong learning. Socially responsible
behaviour means companies applying existing social rules in a
committed way and endeavouring to build up a spirit of part-
nership with relevant stakeholders.

2.12
The improvement of governance at the national and at
global level is another key message of the WCSDG-report. As
regards the global level, the EESC agrees that it is of crucial
importance to strengthen the multilateral system of interna-
tional organisations. The key to governance at global level is
greater and more policy coordination between the organisa-
tions. It needs to be more effective, better resourced, more reac-
tive and responsive, avoiding duplication and mismanagement.
Within the decision-making bodies of the international organi-
sations the Member States of the EU should urgently insist on
bringing this process forward. It should be observed that, if it
comes to coordination and coherence, the role of the Member
least as important as the Commission's. More
States is at
recommendations in this respect in the Communication would
have been welcome. The interplay between Commission and
Member States should receive adequate attention in the devel-
opment of policies in the relevant
is
crucial that the EU pulls its full weight in international govern-
ance. The member states must strengthen cooperation, improve
the preparation of their proposals and activities in international
institutions, and coordinate their positions.

international

fora.

It

The EESC believes that

3.1
there is an internal and an
external dimension for the EU in bringing forward the social
dimension of globalisation.

3.2
The internal dimension lies in the ability of the EU to
deal with structural reforms: the EESC believes that the success
of the Lisbon Strategy is key for the success of a specific EU-
policy contribution to the social dimension of globalisation.
Only when the Member States succeed in implementing the
necessary structural reforms by mutually reinforcing economic
development, employment and social policy, as well as in
realising economic and social cohesion, can the European
Union serve as a benchmark for the global level. The EU must
continue its efforts to overcome protectionist tendencies in
today's EU trade policy in particular, but non-exclusively, as
regards agriculture, especially processed products, and should
generally pave the way for a trade policy without export subsi-
dies. Furthermore the European Union and its Member States
must take an active stance with decisive reforms on the chal-
lenges of demographic ageing and persistent high unemploy-
ment. In order to stimulate a sustainable increase in the level of
employment,
in social protection and insurance
systems are essential to increase the incentive to work and
reduce non-wage labour costs. Flexible working arrangements
are just as
important as adequate protection for people
working under those arrangements and as investments in
human capital. Furthermore, new active economic migration
policies should be drawn up, as called for at the Thessaloniki
European Council and proposed by the Commission and the
EESC. All these reforms have to be worked out carefully in
cooperation with employers and trade unions.

reforms

The EESC refers to the recent Global Competitiveness
3.3
Report 2003–2004 of
the World Economic Forum, which
states a notable good performance by the Scandinavian coun-
tries. These are countries which on the one hand have a strong
tradition in social market economy but which at the same time
have succeeded in implementing the structural reforms, which
are vital for maintaining the basic principles of social market
economy. This proves that
the European social model can
provide a basis for successful structural reforms.

3.4
The external dimension is that the EU should play a
leading role in underlining the importance of multilateralism
and global governance. The key issues are to strengthen the
system of international organisations within the UN-system and
to push for a more coherent policy between these organisations
and with the Bretton Woods' institutions and the WTO. The
EU should especially engage in strengthening the existing stan-
dards for social development, such as the ILO core labour stan-
dards, decent work as a global goal, and the UN human rights'
Covenants. It should work towards the implementation of these
standards in the UN-member states, in law as well as in prac-
tice. It should secure better integration of the social dimension
and decent work in its programmes for external cooperation.
EU Member States should increase their development assis-
tance.

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3.5
In this context the EU has a role to play in promoting
forms of formal representation and consultation of employers'
organisations, trade unions, and other relevant civil society
organisations in international financial and trade organisations
such as the IMF, the World Bank and the WTO. The OECD can
provide these institutions with an example, which has proven
its usefulness for many years.

The Commission and the Member States should, in close
3.6
cooperation, give serious consideration to the proposal of the
WCSDG of establishing an Economic and Social Security
Council. This is one of its major suggestions for providing real
leadership at the global level because it sees a need for balan-
cing economic and social policies in a coherent way in order to
achieve agreed objectives. They should also pay appropriate
attention to any serious efforts to reform and strengthen the
UN ECOSOC's potential, and yet not materialised, role in global
If
policy coordination in the economic and social
ECOSOC's position would indeed be upgraded, the EESC will
explore ways and means to make the voice of Europe's orga-
nised civil society better heard through ECOSOC within the
UN-system.

field.

The European Commission and the Council of Ministers
3.7
should take the message of the WCSDG that decent work is an
essential instrument to eradicate poverty. They should promote
decent work as a global goal to be considered by the United
Nations in its review of the Millennium Declaration and the
Millennium Development Goals.

3.8
One of strongest messages of the WCSDG is the urgent
appeal to Governments to coordinate and formulate coherent
policies in and between the international financial institutions
(IFIs), the WTO and the ILO. A pre-condition for such coopera-
tion and coherence is that the same exercise is undertaken by
governments at the national level. They should put an end to
the current practice that the representatives in the IMF receive
their instructions predominately from Finance ministries, in the
WTO from Trade or Economic Affairs ministries, and in the
ILO from the ministries of Labour, Social affairs and Employ-
ment. The EESC strongly suggests that the Commission, as well
as the Council of Ministers, consider the idea that governments
of Member States which have an Economic and Social Council,
request an opinion of their respective Councils on ways and
means to realise this cooperation and coherence at the national
level. Governments of Member States, which do not have an
Economic and Social Council, could solicit the views of the
most representative employers' organisations and trade unions

Brussels, 9 March 2005.

in their countries, or use existing consultation machinery in
which civil society participated in the preparation of the UN
Social Summit and the Social Summit +5 exercise.

3.9
The Commission, in close cooperation with the Member
States, might go a step further in the promotion of more effec-
tive dialogue between the ILO and the WTO (and, for that
matter, the ILO and the IMF, and the ILO and the World Bank)
than it proposes in sections 5.5 of the Communication. The
WTO (which has so far been very resistant to the idea to pay
attention to the social dimension of the policies within their
mandate), the IMF and the World Bank might, on the basis of a
mandate given by their Member States, establish coordination
bodies with the ILO in which the inclusion of a social dimen-
sion in their work, as well as the monitoring of the develop-
ment, could be secured. For instance with the expiration of the
WTO's Agreement on Textiles and Clothing (ATC) at the end
of 2004, many textiles exporting countries face acute adjust-
ment problems and major job losses. Given the cross-cutting
nature of the issue,
it provides an evident area for a Policy
Coherence Initiative to be undertaken, which should involve all
the agencies concerned — the WTO, World Bank, IMF, ILO
and other relevant UN agencies — in anticipating the social
and economic impact and recommending measures to be taken
by the governments that stand to be affected, backed by inter-
national assistance.

The EU should continue to encourage the inclusion of
3.10
core labour standards as a point of reference in the periodic
trade policy reviews of WTO Member States, based on its own
example of October 2004. The EESC thinks that it would be
appropriate to be represented on the Commission's delegation
to such a future trade policy review. The Commission could
also stimulate its main trading partners to engage in this sort of
trade policy reviews.

The EESC thinks that, while the idea of the WCSDG of
3.11
establishing a UN Globalisation Policy Forum comprising the
agencies of the multilateral system and other organisations,
groups and individuals concerned with the social dimension of
globalisation is interesting, it might be too ambitious a project
the prevailing conditions. When Governments have
under
seriously started to coordinate and increase the coherence of
their policies in the IFIs, the WTO and the ILO and when on
the basis of that a start has been made with better cooperation
between these international institutions, the time will be ripe to
consider this proposal seriously.

The President

of the European Economic and Social Committee

Anne-Marie SIGMUND