Decent Work in Global Supply Chains

For developing countries, the gsc-related trade constituted approx. 30% of their GDP. However these gains have been largely appropriated by a handful of economic actors, while the majority of workers have not seen any significant benefits.

‘East Asian miracle’ – Japan, South Korea and Taiwan. w/ a strong role of the state + focus on ‘export-oriented industrialization’. Also radical redistributive land reforms + substantial government investment in infrastructure for agricultural market and robust phase of labor absorption (?)

Most developing countries were not able to follow this model – as such levels of surplus labor continue to remain very high which makes it very hard for workers at large to gain significant benefits from integrating into gsc

The global labor scenario shows that the world of work for the majority consists of fragile and vulnerable conditions – 40% of of the world’s workers struggle in the informal economy w/ no minimum wage, no social protection and no labor rights

Impact of NAFTA on workers:

• Sped up globalization in North America and increased outsourcing
• There was a weak labor side agreement … no remedies for violations of workers rights
• Existence of a labor clause that is enforceable is something that can be used by workers to pressure governments and corporations to pay attention
• Corporations are motivated by the threat of losing access to their consumer markets
• Investor-State Dispute Settlement (ISDS) - The AFL-CIO is opposed and has been so for decades. ISDS has given corporations and foreign investors extraordinary rights to sue governments. ISDS is a part of NAFTA.

Global Wealth Chains – linked forms of capital that seek to avoid accountability (fiscal claims, legal obligations, regulatory oversight) during processes of pecuniary wealth creation. GWCs are often located in offshore jurisdictions. This paper suggests that Global Values Chains co-exist with GWCs.

Value chains have had profound impact on transnational policy development but there is also a link between value chains and financial and legal innovation.

Understanding the dynamics behind MNCs global strategies and the opportunities they may provide for developing countries is incomplete if the legal and financial aspects that condition these dynamics and opportunities are neglected.

Corporations are looking for innovations in design and production but are also looking for ways to avoid taxes and hide capital. As such we have “commercializing sovereignty” by designing regulation and legal systems with the specific purpose of attracting disproportionate volumes of mobile capital and ‘optimize’ tax exposure.

Intangible assets (i.e. patents + knowledge economy) pose a series of valuation and conceptual problems. The most valuable corporate assets are shifted to jurisdictions where they are subject to little or no tax.

How firms use wealth chains to avoid fiscal claims as part of a strategy to maintain market dominance

The WTO, IMF and the WB are involved in promoting value chains as a concept and policy area

MNCs have transcended the institutional complex of the Fordist era. Need to understand how financial and legal innovations are articulated through wealth chains in ways that harm value chains and development objectives