Free trade hurts American workers

- Eshan Verma
HR activities affected by WTO
Joining WTO by a country is usually accompanied by economic and legal reforms to speed up the progress of
the country. During this phase of rapid change, there is a need to create effective HR systems in order to compete
both domestically and internationally. With opening up of the economy comes greater competitive pressure and
need for standardization to compete with others. The global practices which a company would want to follow
now, might affect the employees, if their adaptability is low.
The unprecedented competition it brings along requires efficiency to sustain oneself. Managing ones employee
by laying-off the underperforming and recruiting more capable ones becomes a challenge for the HR managers.
In certain cases this has led to employment contract system. Making the employees think about how to perform
the jobs to bring about a greater efficiency poses the biggest challenge in terms of their training and skill up
gradation.
High wages and employment security which earlier were the pillars for high commitment from employees dont
exist any longer, which might bring down their motivation levels. Keeping them motivated thus becomes
another great challenge. Also in order to sustain, the HRM practices should take cognizance of employee
flexibility, a risk taking and responsive corporate culture etc.
Negative perspective on WTO by some people
Some people from the developed economies are of the view that WTO causes reduction in wages as the workers
have to compete against each other globally. Although WTO operates with the intention of promoting free trade
for global harmony, they believe that the benefit of the policies is mostly reaped by the large MNCs by
lobbying. Also, people believe that the most favored nation clause in the WTO agreement reduces the
national sovereignty all the nations have to be treated equally irrespective of the bilateral ties they share at any
instance.
While the above concerns are raised by the developed economies, the developing ones also have their share of
criticism. The trend of top 20% using 80% of the resources has been enhanced as the companies nowadays tend
to setup plants where the labor is cheap and the operational costs are low. This has lead to an increasing
concern for the inequality as the remaining 20% resources for the 80% poor now deplete further.
Further, the developing nations believe the decisions are dominated by the developed nations who have greater
voting power. The people in developing countries also believe that the western nations are sometimes provided
unfair trade benefits while those not participating due to the above reasons feel they are being marginalized.
Explaining benefits to employees working in a country negatively affected by WTO
The anguish felt by the employees in a negatively impacted by WTO country mostly have the concern of
diminishing opportunities in increasingly competitive environment. Also the developed nation employees feel
lowering of wages being inevitable because of freer trade.
In such situations, the organization needs to focus on the increasing volume and landscape which freer trade
offers. The HR practices need to communicate the global opportunities which arise out of globalization. The
challenge of being in line with the global practices can be projected as a chance to continually upgrade oneself
and compete with the best.
Freer trade stimulates economic growth and thus has the potential for greater employment. Also, the non
discrimination clause of WTO ensures the government to do away with their unwise labor policies as they have
to align with the policies of the interacting governments too, which in the long run is beneficial for employees.