Core Labour Standards Plus – No More Trade Deals Without Binding & Enforceable Labour Provision

Take a look at the label on the outfit you are wearing, and the chances are at least one of the items was made in Asia. One reason for this is a series of trade pacts that gave developing Asian nations preferential access to markets in the European Union and the United States. Thanks to such agreements, countries such as Bangladesh, Cambodia, Pakistan and Vietnam are today deeply integrated into global supply chains.

For people living in these countries, the removal of certain trade barriers has made life a lot easier. Over the last two decades, millions of people have found employment in factories and production plants which have sprung up across Asia to satisfy growing demand for cheap garments, shoes and electronics.

But even for those who have escaped rural poverty, their new employment situation is still far from satisfactory. Most work backbreaking hours in unsafe environments – and still struggle to make ends meet.

The reason: progressive liberalisation of trade is creating new social and economic realities in Asia, especially in sectors that are highly competitive, require few skills and are mobile, where work can disappear as fast as it came. Multinational brands don’t hesitate to ditch a supplier and move countries when a contractor does not meet their demands. To lower costs further, manufacturers often resort to unfair labour practices. Across Asia we are witnessing a “race to the bottom” in which worker’s rights and conditions are fast deteriorating.

This is where the Friedrich-Ebert-Stiftung (FES) in Asia enters the fray. “Core Labour Standard Plus: Linking Trade and Shared Prosperity in Global Supply Chains in Asia” (CLS+) is an initiative aimed at promoting compliance with the already existing Core Labour Standards (CLS) and at introducing complementary binding labour standards. We believe that it is time, that the important concept of compulsory compliance with these fundamental standards (CLS) needs to include what we call a Core Labour Standards Plus (CLS+) approach. The three most important standards to add are living wages, the limitation of working hours and better safety standards.

CLS+ is meant to support the creation of decent work in the global supply chain in mainly three sectors: textiles and garments, footwear and electronics. At present, we are focusing on Bangladesh, Cambodia, Pakistan and Vietnam. Eventually, we want to go beyond these countries.

To make the implementation of CLS+ a success, mechanisms of control have to be devised. Higher labour standards will only result if compliance can be enforced. Voluntary concepts such as Corporate Social Responsibility (CSR) have not worked in the past, making enforceable labour standards necessary. Trade policy can be used to introduce improved labour standards in Asia, and to force multinational corporations to comply with them. Funds derived from tariff suspension should be used to develop a better governance framework to assert labour standards at the national level.

Ideally, CLS+ will not only benefit employees in Asia but have positive side effects. If European governments can show that trade agreements are actually used to make workers in Asia better off, they might become more popular.

Our project is made up of several components. After an inclusive process a conceptual framework has been developed which is due to be established by early 2017.

External researchers are already conducting country studies on the topic of “Linkages of Trade and Labour Standards” in Bangladesh, Cambodia, Pakistan and Vietnam. In addition, an economic study assessing additional gains for multinational brands through tariff suspension will be commissioned. Based on this research, new policy tools will be developed and finalized by mid-2017. The political lobbying process will begin in the second half of 2017, as the EU starts its mid-term.

FES is of course not the only organisation working to improve labour standards.

Our unique selling point is our vast network of offices in Asia, our bureaus in Brussels, Berlin and Geneva, as well as our network of partners around the globe. By making good use of these resources we can create synergies between the existing initiatives and combine national, regional and global activities. This way, and in accordance with social democratic values, we can make a meaningful contribution to the fight for workers’ rights and decent work all along the global supply chain. Our overall aim is to help shape a socially responsible international trade regime for the 21st century.