Trade doesn’t work for all

With this statement, Member of the European Parliament Bernd Lange who is also chairman of the Commission's Committee on International Trade, opened the panel discussion on “Missing Links – Making trade work for workers”, co-hosted by Friedrich-Ebert-Stiftung (FES) on 28 June at the European Parliament.

The purpose of the panel discussion, organized under the framework of the FES regional project Core Labour Standards Plus (CLS+) in Asia, was to make decision makers aware of the reality experienced by workers producing the cheap goods people are consuming in developed countries, and to propose effective tools to address working conditions which are anything but decent.

The European Union’s Trade Commissioner Cecilia Malmström, invited to discuss an improved social dimension of EU trade policies, defended the existing approach to the EU’s bilateral trade regimes. “Trade does work, but we can improve it,” the commissioner said.

Presenting a draft version of a progressive Model Labour Chapter, to be used as an inspirational basis for future bilateral EU trade agreements, Lange pointed to the need for improved access to international complaint mechanisms for workers, trade unions and civil society organizations, in cases of violations of core labour standards. The trade commissioner, however, remained sceptical towards Lange’s proposal, which includes sanctions as a last—but credible—resort. “Sanctions are not a silver bullet,” Malmström said, attempting to refute the notion that the EU was reluctant to enforce agreed standards.

The changing nature of international trade, dominated by global value chains, has led to downward pressure on working conditions, undermining fundamental workplace rights.

In recent months, questions regarding a more normative and forceful approach to enforcing decent work and labour standards in EU trade partner countries have been hotly debated in Brussels. Lawmakers and the Commission have come under pressure to use the enforcement mechanisms built in to existing trade agreements, as numerous violations of core labour standards in exporting countries have come to light.

FES, together with Lange, presented findings that trade does not necessarily work for workers in Asia, who pay a high price for their coveted jobs in the export-producing factories of Asia. Faced with structural massive overtime work, poor occupational health and safety standards and shrinking wages, workers, trade unions and local governments are finding themselves increasingly powerless vis-à-vis the negotiating might of global supply chains and globalised capitalism. The changing nature of international trade, dominated by global value chains, has led to downward pressure on working conditions, undermining fundamental workplace rights along its grinding way.

These findings, established through field research and analysis carried out under the framework of CLS+ in Asia, informed the panel’s debate (<link news who-benefits-from-trade external-link>link to FES study Who benefits from trade?). “Trade cannot fix domestic policy failures,” said Ken Ash, Director of Trade and Agriculture at the Organisation for Economic Co-operation and Development (OECD). In contrast, Corinne Vargha, Director of the International Labour Standards Department at the International Labour Organization (ILO), spoke about the need to actively involve stakeholders, improve consultation mechanisms, and policy coherence. She said that there is “very limited satisfaction with the overall transparency of the trade negotiation process.”

“It is time to step up action to make free trade fair. It is not acceptable that companies are competing by lowering labour standards. There has to be a floor of rights which nobody can go below"

For Lange, the strategy is clear, “We need to find progressive partners globally, and make trade also about common values,” he concluded. “We have to offer capacity support and we have to facilitate accessibility and transparency.”

“It is time to step up action to make free trade fair,” said Veronica Nilsson from the Singapore-based FES Office for Regional Cooperation in Asia, who steers the regional project CLS+, and watched the panel discussion on live stream. “It is not acceptable that companies are competing by lowering labour standards,” she commented. “There has to be a floor of rights which nobody can go below. Governments need to consider these things when they enter into negotiations over trade policies.” ###

Adrienne Woltersdorf is the director at the Singapore-based FES Office for Regional Cooperation in Asia. For more information on the regional project Core Labour Standards Plus, read the project's brochure or contact <link about contact external-link>Veronica Nilsson, programme manager at the FES Office for Regional Cooperation in Asia.