At the IDB's Washington, D.C., headquarters last February, senior Bank officials spent a day listening to some of their most legendary critics: labor union leaders from Latin America and the Caribbean.

Even more surprising was the candid but cordial tone of the meeting. "It is a pleasure to meet with you today," Leroy Trotman, president of the International Confederation of Free Trade Unions, told IDB President Enrique V. Iglesias. "This could never have happened before 1992," he added. "Back then we had too many mutual suspicions!"

Trotman was referring to an IDB-sponsored conference in 1992 where some 80 union leaders from the region met with representatives from the IDB, the World Bank and the International Monetary Fund. He said the conference, devoted to discussing the social and labor impacts of economic reforms, was a landmark event that persuaded many union leaders for the first time that the IDB is receptive to their concerns and ideas.

Trotman's assessment of the 1992 conference was echoed by other participants at the February meeting, which included John J. Sweeney, president of the American Federation of Labor-Congress of Industrial Organizations (AFL-CIO), Luis Anderson, president of the Inter-American Regional Workers Organization (ORIT), and top union federation officials from Argentina, Barbados, Brazil, Canada, Chile, the Dominican Republic, Mexico, Venezuela and the United States.

"Much of the mistrust that existed between us before has now disappeared," said ORIT's Anderson. But while he praised the IDB for its willingness to talk with labor leaders, Anderson said most of the region's governments have refused to consult organized labor prior to adopting economic reforms that are promoted by the IDB.

Anderson said this lack of consultation is inexcusable, particularly on issues such as regional integration and trade liberalization, because workers are the first to feel the consequences of these changes. "We've never debated whether or not we agree with economic globalization and integration, because we know it's a reality," Anderson said. "We know that great wealth is being created [thanks to integration], but at the same time we see that poverty is increasing, the number of jobs is decreasing, and the informal sector is growing. So we believe there is a problem in the distribution of the benefits of these reforms."

Anderson and other labor leaders at the meeting said they generally support efforts to open local economies to greater foreign competition, but they warned that governments that fail to address the inequitable distribution of wealth and exclude labor unions from the trade policy debate risk a backlash from voters. He said the Clinton administration's recent failure to receive "fast-track" trade negotiation authority from the U. S. Congress was "a victory for the AFL-CIO" and "an example of what will happen in all of Latin America if integration is not perceived as benefitting working people."

As a step in the right direction, Anderson suggested that the IDB promote the creation of a forum for labor consultations as part of negotiations leading to the creation of the Free Trade Area of the Americas (FTAA).

In his remarks at the meeting, IDB President Enrique V. Iglesias agreed that the economic reforms that have swept Latin America in recent years have come at a cost for the regions' workers, and that the problem of unemployment has reached "new dimensions" in many of the region's countries. He also concurred that relations between labor, government and business have not been as productive as they should, saying there is a need to "improve the quality of the dialogue" between these groups.

Labor participants at the meeting also criticized what they described as a wide-spread failure to enforce worker rights codified in the various conventions of the International Labor Organization (ILO). The ILO conventions, which most Latin American and Caribbean countries have ratified, set forth a variety of basic workers rights, including the right to organize and bargain collectively, and protections against child labor and on-the-job discrimination based on gender.

Stan Gacek, the AFL-CIO's assistant director for international affairs, said the failure to enforce labor protections stems from a broader refusal by most governments to link social rights to trade policy. He argued that this refusal is difficult to justify when capital rights, such as those protecting intellectual property and trademarks, are explicitly addressed and defended in trade accords. "Governments that violate copyright protections get harsh treatment," Gacek said, "but what about those who violate labor protections?"

Several participants at the meeting urged the IDB to find better ways to include the input of public employees in Bank-funded projects that affect public services such as education or the judiciary. Tim Beatty, regional U.S. representative for Public Service International, said too many projects assume that the only way to improve a service is to privatize it or put it up for concession. "Public workers often have very creative ideas about how to improve productivity and service quality in state-run enterprises," he said, "but they are rarely consulted."

On a different note, other union participants at the meeting acknowledged that labor movement leaders have not always kept up with the changing demands of the market. "We recognize that the trade union movement isn't prepared adequately to deal with new technologies and globalization," said Nair Goulart, a Brazilian who is president of ORIT's Women's Committee. Participants praised an IDB program that paid for selected union leaders to take university courses on labor economics, and they encouraged the IDB to consider additional programs in labor leadership training.

Gustavo Márquez, a labor specialist in the Office of the IDB Chief Economist, said today's union leaders also need to be more understanding of the demands of increasingly specialized and competitive labor markets that require flexible workers to meet evolving production processes. He said many of the labor disputes in Latin America today revolve around outdated work rules that limit the ability of employees' to adapt to these changes. He urged new rules that safeguard worker rights while allowing for greater competitiveness and productivity.

"We have different starting points, different jargon, and a different history," IDB Executive Vice President Nancy Birdsall told participants at the conclusion of the meeting. "But we need more of these meetings because it is clear that we also have a great deal in common. We support open negotiations between business and labor. We support social protections, developing better safety nets and better unemployment insurance arrangements."