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Global Commodity Chains

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					    Global Commodity Chains and Labor
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    Outline
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       Economic integration of “Greater China”
        (China-Hong Kong-Taiwan)
        and China in East Asia
       Concept of “global commodity chains”
       Experience of labor in low-wage mfg’ing
       Actors affecting labor rights
    Economic Integration of “Greater China”:
    A Player in Global Commodity Chains
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       How did China become a player?
         enabled by certain political initiatives
         driven by economic complementarities
               Geographic proximity
               Exchange rates
                     1980s appreciation of New Taiwan Dollar
               Stricter environmental regulations in democratizing Taiwan
                     Ex: electro-platingarsenic in ground water
               Land values increase in Taiwan in 1980s
               Upward pressure on wages in Taiwan in 1980s
         facilitated by linguistic and cultural affinities
         Question: Where were the first special economic zones
          located? Why?
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    Economic Integration of “Greater China”:
    A Player in Global Commodity Chains
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       Chinese government policies to attract foreign direct
        investment in export-processing zones strategially
        located near Hong Kong and Taiwan
         “Special  economic zones”
         Tax breaks for exporters

         Duty-free import of inputs

         Infrastructure development
    Sources of Direct Foreign Investment




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    Global Commodity Chain Analysis:
    Roots in Dependency and World Systems Theory
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    Dependency              World Systems
    Core                    Core
    Periphery               Semi-periphery
                            Periphery

    Global commodity chain studies draw on the insights
     of dependency/world systems theory
    Global Commodity Chains
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       Distinguish
         Producer-driven   commodity chains
           Capital, technology intensive
           Exs: automobiles (GM, Toyota), aircraft (Boeing, Airbus),
            electrical equipment
           Core multinational corporations invest directly
    Global Commodity Chains
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       Distinguish
         Buyer-driven   commodity chains
           Labor  intensive, low technology
           Exs: apparel (Gap, Levi), shoes (Geoxx), toys (Brio, Disney)
           Core corporations own trademarks, engage in sub-
            contracting
               “Just-in-time” inventory control
                   Very short production lead-times

               Low barriers to entry in manufacturing
               High barriers to entry in design and marketing
     Global Commodity Chains
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        What functions take place in the
          Core?

          Semi-periphery?

          Periphery?
            Where is power located in the buyer-driven
                       commodity chains?

     location           function                            division of profits
     core               design/marketing                              $$$$$$
                         orders, contracts
                        ex’s: Reebok, Nike

     semi-periphery     higher-end mfg’ing                              $$$
                        trade intermediary for low-end mfg’ing
                        quality control, financing, shipping
                        (middle-man role)
                         direct foreign investment
                        ex: Yue Yuen

     periphery          low-end mfg’ing                                  $
                        (paid by middle-man)
                        ex: Lili (working sister 打工妹)
                        Dongguan 2007 wages now ~$3/day


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     What is “triangle manufacturing”?

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                                        Products
                                           from
                  Orders
                                        periphery
                from core
                                         (China,
                   (US)
                                        SE Asia,
                                      Latin America)




                             Contracts
                             from semi-
                              periphery
                            (Hong Kong,
                               Taiwan)
     Sample industry breakdown
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        75 billion dollar industry
         36 billion  brands/stores              48%
         25 billion  transportation logistics   33%
         14 billion  factory oversees           19%
     “Sweatshop Labor”
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        Objective and subjective interpretations
          Video
            http://video.google.com/videosearch?hl=en&q=labor%20c
             hina&um=1&ie=UTF-8&sa=N&tab=wv#
            5:20-10:33; 20:11-24:00

          Why  might “sweatshop labor” seem desirable to
           workers?
     Discussion Topic
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        Identify several pro’s and con’s associated with
         “sweatshop labor.”
        This question relates to the debate about whether
         low-wage labor in export processing industries is
          “a route out of poverty” or
          “a race to the bottom”
     Competing Theories about Impact of Global
     Commodity Chains
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        Dependency vs. Neo-liberalism vs. Statism Debate
        Is low-wage labor in export-processing factories a
             “route out of poverty”?
                 Driven by market forces (neo-liberal)
                 Does a developmental state promote
                       Labor protection
                       Policies toward higher-tech, higher-wage jobs (statist)?
         or
             “race to the bottom”?
                 Driven by multi-national corporations (dependency)
                 Driven by predatory state (statism)
                       Lack labor protection, etc.
       Is low-wage labor in export-processing factories a…

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    “route out of poverty”?
      Higher   paying job oppor-
       tunities for rural surplus labor
      Labor remittances important
       source of capital
        “China Blue” & “Working Sister”
            Open small business
            Help pay for sibling
             education
            Dowry—more
             independence in choice of
             marriage partner
     Is low-wage labor in export-processing factories a…
     route out of poverty”?
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        “Race to the bottom?”
          Low  or unpaid wages
          Wages for unskilled workers rising very slowly (in part
           due to intense competition both locally and
           internationally),
            while wages for skilled workers rising dramatically (note: not
             a level playing field in terms of access to education for
             children in remote, rural areas)
          Abusive   working conditions
New Developments in Labor Politics:
Strikes Hit Honda Parts Factories
Publicity over Rash of Suicides Drives
Changes at Taiwan-Owned Foxcomm

     Actors at Different Levels of Analysis
     Affecting Labor Rights in China
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        Supranational Level
            Global Compact
                United-Nations-sponsored initiative
                http://www.unglobalcompact.org/AboutTheGC/TheTenPrinciples/index.h
                 tml
            World Trade Organization
                “social clause”  failed
            International Labor Organization
                China signatories to more conventions than US
                But
                      “reservations” QUES: What’s a likely Chinese “reservation”?
                      No teeth
            Multi-national Corporations
                Corporate Codes of Conduct
            International Non-Governmental Organizations (NGOs)
                Global Exchange
                      http://www.globalexchange.org/campaigns/sweatshops/
     Actors at Different Levels of Analysis
     Affecting Labor Rights in China
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        State Level
            Developed Countries—U.S. example
                U.S. Department of State
                U.S. Congress
            Developing Countries
                China: Labor Law effective 1994
        Organizational Level
          Unions
          Other Interest Groups
                China Labor Watch—Li Qiang
                      http://www.chinalaborwatch.org/
                China Labour Bulletin--Han Dongfang
                      http://www.clb.org.hk/public/main
     Actors at Different Levels of Analysis
     Affecting Labor Rights in China
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        Individual Level
          Students

          LaborActivists
          Consumers
                    SLAP campaign wants
                    UW to be sweatshop-free
                    March 7, 2007

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        Senior Rod Palmquist, a representative for SLAP, emphasized the
         responsibilities of college students in particular to “take ownership of
         knowing where their clothes come from and that they are ethically made.”
        In order to ensure every article of clothing that bears the UW logo has been
         constructed ethically, SLAP has petitioned the University to adopt the
         Designated Suppliers Program (DSP), an agreement sponsored by the
         nationwide United Students Against Sweatshops (USAS).
        The program aims to secure at least 75 percent of all UW apparel from
         factories with workers’ rights, including living wages (salaries high enough to
         support the standards of living depending upon the country) and the right to
         unionize.
        Contracts with collegiate apparel generate huge profits for athletic apparel
         companies such as Nike and Reebok, Palmquist said.
     The Seattle Times
     November 17, 2000
     UW to join Worker Rights Consortium

     University will continue to monitor groups' involvement in issues related to
     sweatshops

     “The University of Washington will join the Worker Rights Consortium, despite
     earlier concerns about the fledgling anti-sweatshop group's refusal to allow
     garment-industry representatives on its policy-making board.

     “The school also will maintain its affiliation with the Fair Labor Association, a U.S.
     Department of Labor program that has been criticized by student activists for
     including corporate partners such as Reebok, Eddie Bauer, Nike, and Kathie Lee
     Gifford.




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       Wal-Mart Wins Ruling on Foreign Labor
       December 19, 2006

 “Wal-Mart Stores cannot be held liable under United States law for labor
 conditions at some of its overseas suppliers, a federal judge has ruled.

 A complaint filed last year in Los Angeles by the International Labor Rights Fund
 contended that employees of Wal-Mart suppliers in China, Bangladesh, Indonesia,
 Swaziland and Nicaragua were forced to work overtime without pay and in some
 cases were fired because they tried to organize unions.

 The complaint said that the contracts required suppliers in the five countries to
 comply with local labor standards and that what the plaintiffs deemed the
 company's failure to enforce those terms meant the employees were working
 under ''sweatshop'' conditions.

 ''This is basically a local wage and hours violations case and should be handled in
 those countries,'' said Beth Keck, a spokeswoman for Wal-Mart. ''It is very
 inappropriate that Wal-Mart should be made part of this.''
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China Drafts Law to Empower Unions and
End Labor Abuse, October 13, 2006
  “China is planning to adopt a new law that seeks to crack down on sweatshops and
  protect workers' rights by giving labor unions real power for the first time since it
  introduced market forces in the 1980's.

  The Chinese government proposal, for example, would make it more difficult to lay
  off workers, a condition that some companies contend would be so onerous that
  they might slow their investments in China.

  The skirmish has pitted the American Chamber of Commerce -- which represents
  corporations including Dell, Ford, General Electric, Microsoft and Nike -- against
  labor activists and the All-China Federation of Trade Unions, the Communist
  Party's official union organization.

   On Friday, Global Labor Strategies, a group that supports labor rights policies, is
   expected to release a report in New York and Boston denouncing American
27 corporations for opposing legislation that would give Chinese workers stronger
   rights.
     Who is responsible for sweatshop conditions?
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        Multinational corporation based in the core?
          Do corporate codes of conduct exist? Enforced?
          Pressure on price, delivery schedule, etc.

        Subcontracting middle man who owns/manages the
         factory in the periphery?
            Subvert codes of conduct?
        Government where the factory is located?
          Enforce local laws? China’s Labor Law passed 1994
          Note: independent trade unions--illegal

        Consumers based in the core?
            We are what we wear?

				
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