Rising Powers, Labour Standards and the Governance of Global Production Networks

China, India and Brazil are amongst the leading economies on the world stage today. China is known as the 'factory of the world'. Brazil has grown rapidly in recent years with its exports of primary commodities while Indian firms have acquired some of our best known British brands (from Tetley tea to Jaguar and Land Rover cars). The continuing dynamism and resilience of these emerging economies, or Rising Powers, is underlined by their sustained growth rates during the current, and on-going, global recession. These countries are now seen by many as the new engines of global growth. As they continue to flex their economic muscle, China, India and Brazil are challenging existing forms of global economic governance and power. This has important consequences for us in the UK, in our ability to compete in the global economy, and in terms of the welfare and wellbeing of our workers and consumers. This project is interested in understanding whether, and how, these Rising Powers are changing the 'rules of the game' and with what consequences.

We focus on one particular set of 'rules' that have become increasingly important to global trade relations over the past two decades - global labour and social standards. Western, and especially British, consumers are increasingly made aware of how the foods they eat, the clothes they wear and the goods they consume are produced, and under what conditions workers produce such goods. For many leading Western brands ensuring that their widely dispersed global suppliers conform to accepted norms on good working conditions, such as the exclusion of child workers, not using forced labour, and providing a safe working environment, is important for protecting the integrity and image of their brands and avoiding consumer boycotts. Meeting such globally recognised labour standards has become an important agenda in the world of global production relations. However, with the growth of leading manufacturing firms from the Rising Powers and the rapid expansion of middle class consumption within these economies there is a persistent fear that there will be a 'race to the bottom', marked in particular by declining global labour standards and diminishing concerns with working conditions in global production. We intend to examine this. Our hunch is that rather than a race to the bottom, we are likely to observe a new era of more differentiated labour and social standards as the Rising Powers take an increasingly more active role in the global economy. This will have consequences not only for Rising Power states, workers and consumers, but also for us in the UK and OECD economies.

We aim to study this through research undertaken in Brazil, China, India, the UK and the EU. We focus our attention on a range of actors. First, we will study the ways in which large firms (including the new multinationals) as well as small and medium enterprises from the Rising Powers engage with, and shape, labour and social standards in their systems of globalised production arrangements. Second, we will investigate how civil society bodies in these countries affect this process and if and how they shape local attitudes and norms on working conditions. Third, we will examine the ways in which governments in the Rising Powers define and implement labour standards within the domestic economy as well as how they interact in leading global institutions where many such international standards are formulated. Fourth, we will identify what these developments imply for the ways in which globalised production arrangements will most likely be organised in the future and how subsequent generations of global labour and social standards are likely to be shaped. Finally, we will consider what the implications are of the dynamism of the Rising Powers, and the ways in which they interact with global labour and social standards, for other developing countries, and in particular for us in the UK and for the competitiveness of UK and EU firms.

This project fits within the ESRC's strategic objective of understanding how changing global dynamics will affect 'economic performance, sustainable growth and a fair society for the UK'. It also falls within the wider, and growing, policy and academic concerns in the UK on how the Rising Powers, especially China, India and Brazil, are impacting on the governance of global trade and the consequences of the associated shifts in global power that arise from this.

Through the earlier ESRC funded Rising Powers and Global Standards Research Network we have already begun to systematically explore this agenda. In doing so we have undertaken preparatory activities through the network grant process leading up to this ESRC stage two application. We mounted regional workshops in China (Hong Kong), Brazil (Rio), India (Delhi) and UK (Manchester) involving constituents such as labour unionists, activists, academics, industry leaders and government representatives. Our proposal is thus strongly influenced by the close scrutiny of key beneficiary groups and target audiences and is considerably refined. Building on successful outcomes from these workshops (scoping papers, case studies and industry feedback) we will further strengthen academic and practical payoffs of our research agenda.

We identify three distinct categories of beneficiaries from this research. These are: First, the academic community - in the UK, within the Rising Powers and also internationally. This includes in particular academics working in the cognate disciplines of development studies, business studies, economic geography and international politics. The PI and CoIs have already developed extensive links with networks of researchers through the Just Supply Chains research network organised by MIT and Stanford, the Capturing the Gains network run out of Manchester and Duke Universities and through the network activities undertaken by the RPGS.

Second, the policy community - in international organisations (such as the OECD, ILO, UNIDO, World Bank, and the WTO), in international, regional and national NGOs, trade unions and civil society organisations (including bodies such as OXFAM, the ETI, the Clean Clothes Campaign, the Asia Monitor Resources Centre), in key UK policy departments (DFiD, BIS, FCO), and governments in the Rising Power states as well as in OECD countries. Through the earlier workshops of the RPGS we have already canvassed a great deal of interest in our proposed research from a range on international agencies (such as ILO, UNIDO and the World Bank) and from NGOs (such as the AMRC and CCC).

Third, private sector firms - including emerging MNCs and SMEs from the Rising Power states as well as large firms from the UK, EU and other OECD economies. This project will seek to build links through the research team's extensive contacts within UK, international and RP firms to inform and involve them in the research and its findings.

The beneficiaries of this research will gain in a number of ways. They will benefit from the empirical research and insights into the workings of global production networks led by Rising Power large lead firms, the implications for SMEs, the role of civil society organisations within the RPs and the nature of international, national and regional levels of state regulation on labour and social standards in production. They will also be informed by the implications of these developments for the competitiveness and organisation of OECD led GPNs and for the future evolution of global labour and social standards. Finally, the academic community, in particular, will gain from the conceptual and methodological advances that the project will provide through its integration of the international business (IB) and GPN frameworks and the associated teaching resources that will be generated from this conceptual advance.