Let's make the global playing field level

The new international economy requires a worldwide code of ethics, argues Denis MacShane

The new international economy has become the most important reference point in modern politics. Argument rages over two questions: has the economy become global and left behind all connections with national economic systems? Or are economic relations reverting to a classic capitalism such as existed before 1914, when capital, goods and people flowed backwards and forwards across frontiers without much let or hindrance? What is undisputed is the monumental impact the new global multinational economy is having on workers and their communities around the world.

It is not only the classic proletarian or peasant who is threatened. Robert Reich, the US Labor Secretary, whose writings have been so influential with new Labour, has written of a new caste of workers - the "symbolic analysts" - whose education and training makes them top dogs in the post- national labour market. Yet these degree- and diploma-stuffed workers are suffering from the crisis of job losses and financial insecurity. Even top managers who appear sleek and powerful as they sit in the business- class airline lounges of the world look anxiously over their shoulder, worrying about relentless competition that can wipe out their salaries and family hopes at a stroke.

These pressure have given rise to the politics of "new protectionism". This is advanced mainly from the right by figures such as Sir James Goldsmith who want Britain to be detached from Europe. In the US, Pat Buchanan and Ross Perot offer their vivid metaphor about the "giant sucking sound" of Mexico pulling jobs out of America under the North American Free Trade Agreement (Nafta). In France, Jean Marie Le Pen has replaced the faded French Communist Party's slogan "Achetez francais" with his ranting against Brussels and Hollywood culture.

The "new protectionists" represent a challenge to the modern left. Some on the left have argued, notably starting from an environmental position, that decoupling from the new international economy is needed to restore national and local economies and civil society. But the trouble with protectionism is that it is a string easy to begin pulling but hard to stop unravelling.

What does one protect? French car companies would love to be protected against Nissans, Toyotas and Hondas made in Britain. The UK steel industry exports pounds 3bn worth of steel each year to Europe - six times the value of beef exports. European steel companies and their governments would like nothing better than to slow down those exports from South Wales and South Yorkshire.

There is an alternative to inward-looking protectionism and that is outward- looking solidarity. Banks and businesses are busy creating new rules for the international economy. Whether at the global level of the World Trade Organisation (WTO) or at a regional level in the European single market, business needs rules and laws, enforced by tribunals and courts, to guarantee the rights of capital and property as both move off-shore.

But homo economicus lives in society and works with other employees in a complex set of local, national and transnational relationships. In parallel with the post-national, commercial law-making to be seen at the WTO, in Europe or under the Nafta agreement there is a need for global action to enhance social and environmental rights.

These can take various forms. The most obvious is the discussion of a social clause in international trade agreements. This has the backing of President Clinton and President Chirac, although it is opposed by the Conservative government. The core of a social clause is simple enough. There are a handful of workplace rights laid down by longstanding international conventions agreed by governments, employers and unions working in the tripartite International Labour Organisation. Respect for these should be a condition for full access to the world trading system.

It is not a question of imposing wages or norms from the North, but of allowing workers in Asia, Africa and Latin America to represent themselves and seek to earn enough to buy the goods they make.

Business ethics is now an increasingly discussed theme, as company executives face invitations to corruption or to sanction pollution in order to cut a deal. Codes of ethical and environmental conduct for multinational companies could create a level paying field so that firms could compete on quality and price, not by indulging in dubious practices.

The scandal of child labour - not children helping on family farms or delivering papers, but full-scale, adult-level work - needs to abolished with the same fervour as the campaign against slavery. The global economy is seeing an increase, not a decrease, in child labour and only an outright ban will work.

A new FLAT tax - or Forced Labour Added Tax - would be a tariff on goods produced with forced, slave or prison labour. A tax on international currency speculation is now accepted by mainstream economists as desirable and workable. Banks will scream; but since money is now a commodity to be bought and sold at a profit, it can carry a modest sales tax.

Trade unions also need a prod to step up their international work by putting substantial resources into developing a labour response to the international economy. Help to widen labour's approach to the global economy could be spurred by seconding union officers to work in embassies overseas.

There is not a single, simple, off-the-shelf proposal that would create an international social response to the new post-national economy. This effort will require concerted work by government, because the final paradox of the new world economy is that it is more and more dependent on government co-operation to make it work. Governments are not powerless in the face of world economic development. A good start to prove the point would be for Britain to line up with other nations to promote world social rights and rules.

The writer is Labour MP for Rotherham. His pamphlet 'Global Business : Global Rights' is published this week by the Fabian Society.