Trade should play a role in improving working conditions

Sustainability is one of the key objectives of the trade policy of the European Union (EU). But how can this objective translate into better working conditions for the millions of workers in the export sector in Asia who do not earn a decent wage, or work in appalling conditions?

This is the question that should have been addressed by the so-called non-paper titled Trade and Sustainable Development chapters (TSD) in EU Free Trade Agreements (FTAs) that the European Commission issued in 2017(link to non-paper). 

This document is intended to facilitate a thorough stocktaking of the current TSD provisions. With this aim, the Commission has formulated a set of questions to seek feedback from the European Parliament and the Council as to whether the TSD chapters are meeting expectations. Given that a large part of the work force in export-oriented industries does not even enjoy fundamental labour rights, this question must be answered in the negative.

Regrettably, the non-paper does not provide the much-needed solutions. It only proposes two options: continuing the current approach with some smaller adjustments, for example by enhancing the role of civil society; or moving towards a US-based model by taking over some elements such as the introduction of a dispute settlement mechanism.

However, both models are far from perfect. The answer to the challenges cannot be to continue with business as usual or to switch to a model that has not proven useful in responding to violations of labour standards. The US model does provide for sanctions in response to such violations, but only if they can be shown to impact trade.

Although the non-paper was intended for a discussion with the EU institutions, trade unions, civil society organizations and others have felt compelled to make their voice heard on this important issue and formulate a better, third option.

In response to the non-paper, Friedrich-Ebert-Stiftung (FES) submitted its own contribution to the discussion on how to improve social clauses in trade, arguing for an approach based on both promotion and conditions. 

Download FES response to Non-paper on "Trade and Sustainable Development (TSD) chapters in EU Free Trade Agreements (FTAs)"

Before signing a free trade agreement, certain basic conditions should be fulfilled, notably the ratification of the core labour standards of the International Labour Organization (ILO). Otherwise some governments will not take the necessary measures. This is for example the case with the EU-Korea Free Trade Agreement. Despite Korea’s commitment to ratify the fundamental ILO conventions, the government has yet to ratify the conventions on freedom of association and forced labour. The deal for the EU-Vietnam FTA is likely to turn out to be another lost opportunity to ensure ratification of the ILO core labour standards. These examples illustrate the necessity to make use of preconditions. The EU should not trade with countries that do not abide by fundamental labour rights.

It is also important to systematically involve social partners and civil society organizations in the drafting and monitoring of sustainable development chapters. The current system with Domestic Advisory Groups (DAGs) has not been able to provide civil society with an efficient channel for communication with governments. The DAGs need to be reformed to truly represent civil society, and they should have a real monitoring function.

No trade with countries that don't abide by fundamental labour rights, effective monitoring of sustainable development chapters and collective complaints mechanism make part of the approach FES and partners propose in response to the non-paper on TSD chapters in EU free trade agreements.

The FES paper also advocates for the introduction of a collective complaints mechanism that would allow the social partners and other members of civil society to make complaints in case of breaches of the FTA. A concrete proposal has been drafted by a team of researchers and is available at this link. 

Sanctions are certainly not a goal in themselves, but if their possibility is not included, the TSD chapters will not have any credibility.

This is one of the reasons why serious violations of labour rights continue despite FTAs and GSP preferences. However, sanctions should be applied in a measured way and avoid penalizing the workers whose rights are violated. The EU should therefore design targeted sanctions that can differentiate between targets and impact those bearing responsibility for the violation. ###

For more information about the regional work by FES in Asia on trade, labour and social dialogue contact <link about contact _blank>Veronica Nilsson, programme manager at the FES Office for Regional Cooperation in Asia.