Labour provisions in trade arrangements - International Labour

Franz C. Ebert Anne Posthuma

Labour provisions in trade arrangements: current trends and perspectives

The International Institute for Labour Studies was established in 1960 as an autonomous facility of the International Labour Organization (ILO). Its mandate is to promote policy research and public discussion on issues of concern to the ILO and its constituents — government, business and labour. The Discussion Paper Series presents the preliminary results of research undertaken by or for the IILS. The documents are issued with a view to eliciting reactions and comments before they are published in their final form.


Franz Christian Ebert Anne Posthuma

INTERNATIONAL LABOUR ORGANIZATION INTERNATIONAL INSTITUTE FOR LABOUR STUDIES

Copyright © International Labour Organization (International Institute for Labour Studies) 2011. Short excerpts from this publication may be reproduced without authorization, on condition that the source is indicated. For rights of reproduction or translation, application should be made to the Editor, International Institute for Labour Studies, P.O. Box 6, CH-1211 Geneva 22 (Switzerland). Web/pdf: 978-92-9014-993-4 First published 2011

The responsibility for opinions expressed in this paper rests solely with its author, and its publication does not constitute an endorsement by the International Institute for Labour Studies of the opinions expressed. Requests for this publication should be sent to: IILS Publications, International Institute for Labour Studies, P.O. Box 6, CH-1211 Geneva 22 (Switzerland).

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Table of Contents Preface........................................................................................................................................ v Introduction ................................................................................................................................ 1 1. A variety of approaches regarding labour provisions in trade arrangements ........................ 2 2. The quantitative significance of labour provisions in trade arrangements ............................ 4 3. Normative content and legal implications of the labour provisions ...................................... 7 3.1. Labour provisions in unilateral systems of trade preferences ......................................... 7 3.1.1. The United States’ Generalized System of Preferences (GSP) and other unilateral instruments ......................................................................................................................... 7 3.1.2. The European Union’s General System of Preferences ........................................... 8 3.2. Labour provisions in trade agreements ........................................................................... 9 3.2.1. Trade agreements concluded by the United States .................................................. 9 3.2.2. Trade agreements concluded by Canada................................................................ 11 3.2.3. Trade agreements concluded by the EU ................................................................ 13 3.2.4. Trade agreements concluded by Asian and African countries and areas............... 15 3.2.5. Trade agreements concluded by Latin American and Caribbean countries .......... 18 4. What are the practical implications of labour provisions?................................................... 21 4.1. Experiences with the sanction-based elements of labour provisions ............................ 21 4.1.1. Sanction-based labour provisions as an instrument for the implementation of labour standards ............................................................................................................... 21 4.1.2. Cases filed .............................................................................................................. 21 4.1.3. Evidence of impact of the sanction-based labour provisions on the situation of workers ............................................................................................................................. 23 4.2. Experiences with the incentive-based elements of labour provisions .......................... 25 4.3. Experiences with the promotional elements of labour provisions ................................ 26 Concluding remarks ................................................................................................................. 28 References ................................................................................................................................ 31

Preface The global crisis which was triggered by the collapse of the financial system in 2008 has led to renewed debate on how to improve the distribution of the gains from glob-alization. Prior to the crisis, income inequalities had grown in the majority of countries. In some developing economies, for example, economic growth associated with freer trade and investment had mainly benefited certain groups. These benefits did not suf-ficiently trickle down to the rest of the population and did not translate into much greater investment in education, health, infrastructure or other public goods which pave the way for sustainable prosperity. In some developed countries, pre-crisis eco-nomic growth went hand-in-hand with a disproportionate increase in the income share of the richest people. Meanwhile, real median wages stagnated. This, combined with dysfunctional financial practices, contributed to excessive recourse to debt among households. Therefore, the issue arises as to how to make globalization fairer. The present paper examines a specific dimension of this debate, namely the inclusion of labour provi-sions – which aim at promoting respect for worker rights along with greater economic integration – in trade arrangements. As the paper shows, the number of bilateral and regional trade agreements which include labour provisions has grown spectacularly over the past two decades. Attention is devoted to both the normative contents and the legal consequences of the labour provisions. Also, a preliminary account of the application of trade-related labour provisions in practice is provided. Interestingly, the paper documents an increasing incidence of labour provisions in South-South trade agreements. The study, based on an in-depth examination of over 150 trade agreements, provides an important empirical contribution to the debate on the rebalancing of the world economy.

Raymond Torres Director International Institute for Labour Studies

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Introduction Numerous approaches have sought to ensure trade liberalization will contribute to improved social conditions, including the insertion of so-called labour provisions in international trade law instruments.1 A debate arose in the 1990s over the efforts to integrate labour provisions into the multilateral legal framework of the World Trade Organization (WTO), led by the United States and various trade union organizations.2 This movement was accompanied by the development of a uniform standard of reference consisting of the four Core Labour Standards (CLS)3 embodied in the ILO Declaration of 1998.4 However, agreement on a possible labour dimension of the WTO framework has proved to be difficult to achieve (see e.g. Servais, 2008).5 In light of the deadlock at the multilateral level, efforts to build a labour dimension into international trade relations have continued to unfold through various other channels. Basing themselves on the WTO Enabling Clause,6 a number of countries have since the seventies created unilateral systems of preferential market access for developing countries subject to normative conditionality (Vincent, 2005). At the same time, bilateral and regional trade agreements have proliferated considerably during the last

1

In this paper, the term “labour provisions” is defined as comprising (i) any labour standard which establishes minimum working conditions, terms of employment or worker rights, (ii) any norm on the protection provided to workers under national labour law and its enforcement, as well as (iii) any regulatory framework for cooperation in and/or monitoring of these issues. Where reference is made to the standards established by the ILO, the terms “international labour standards” (ILS) or “ILO instruments” will be used. 2 This has been studied extensively: see Charnovitz, 1987; Meng, 2004; McCrudden/Davies, 2005; Supiot, 2009. In addition, there is a discussion as to whether the existing WTO law framework does at least allow the Contracting Parties to impose trade sanctions on countries with severe labour rights violations (Robert, 1996; Blüthner, 2005; Chatton 2006; Marceau 2008). 3 As will be seen in this chapter, the CLS have been a point of reference in the elaboration of labour provisions within many trade agreements. More recently, the ILO’s 2008 Declaration on Social Justice for a Fair Globalization has further elaborated the implications of these fundamental labour standards. This Declaration states, among other things, “that the violation of fundamental principles and rights at work cannot be invoked or otherwise used as a legitimate comparative advantage and that labour standards should not be used for protectionist trade purposes” (ILO, 2008). 4 This instrument, which is further specified in the eight ILO Fundamental Conventions, requires ILO

member States to comply with and promote rights and principles in four areas: Freedom of association and the effective recognition of the right to collective bargaining; elimination of all forms of forced or compulsory labour; effective abolition of child labour; and elimination of discrimination in respect of employment and occupation. This applies regardless of whether the Member State has ratified the eight relevant ILO Fundamental Conventions (No. 29, 87, 98, 100, 105, 111, 138, and 182). 5 See in this regard the Singapore Ministerial Declaration, WTO Ministerial Conference, Singapore, 9–13 December 1996, available at: http://www.wto.org/english/theWTO_e/whatis_e/tif_e/bey5_e.htm, which states as follows: “We renew our commitment to the observance of internationally recognized core labour standards. The International Labour Organization (ILO) is the competent body to set and deal with these standards, and we affirm our support for its work in promoting them. We believe that economic growth and development fostered by increased trade and further trade liberalization contribute to the promotion of these standards. We reject the use of labour standards for protectionist purposes, and agree that the comparative advantage of countries, particularly low-wage developing countries, must in no way be put into question. In this regard, we note that the WTO and ILO Secretariats will continue their existing collaboration.” 6 See WTO, Decision of 28 November 1979 (L/4903), Differential and More Favourable Treatment Reciprocity and Fuller Participation of Developing Countries.

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two decades.7 Numerous states have taken these decentralized approaches as an opportunity to include a labour dimension into their trade relations.8 So far, the debate on labour provisions in trade arrangements has mainly focused on the arrangements included in US and EU trade instruments. However, beyond that, numerous other trade arrangements involving labour provisions have emerged over the last decades, including by trade actors such as Chile, New Zealand and various regional integration organizations. These labour provisions are often based on diverse approaches to integrating labour concerns into trade relations that vary considerably concerning their nature, scope, and leverage. This paper proposes to widen the scope of the debate by offering a comprehensive account of the “old” as well as of the “new” models of labour provisions currently included into trade arrangements. Hereby, the focus is both on unilateral systems of trade preferences and on bilateral and regional trade agreements. The paper proceeds in four steps: First, an overview of the different conceptual approaches vis-à-vis labour provisions in trade arrangements is provided. Second, we analyze the quantitative significance of the phenomenon, arguing that the incidence of labour provisions in trade agreements has significantly risen in the last two decades. Third, an analysis of the normative content and the legal consequences of the different labour provisions is provided. Fourth, given its importance for practice and policymaking, the paper undertakes an analysis of preliminary evidence available on the practical implications of these labour provisions, highlighting the need for further research in this area.

1. A variety of approaches regarding labour provisions in trade arrangements Labour provisions have been included in numerous trade arrangements, which can be characterized as either unilateral trade arrangements or trade agreements concluded by two or more parties, which will be examined in this section. While many trade agreements only cover trade-related aspects, other so called integration agreements also deal with broader economic issues, such as infrastructure programmes. Labour provisions may be included into the trade instrument itself, or in accessory documents, such as side agreements or memoranda of understanding, the latter often being not legally binding. Labour provisions themselves differ considerably in various regards. In terms of legal implications, they may entail legally binding normative standards or remain at the stage of simple political commitments. With regard to their normative content, labour provisions differ firstly in terms of the standards to which they refer: some of these provisions commit countries to adhere to certain international labour standards, referring either to the CLS defined in the 1998 Declaration, to ILO Conventions, or to the less clearly defined “internationally-recognized workers rights”. The parties may also commit to enforcing labour standards under their own national labour law. As regards the nature of the engagements subscribed, some labour provisions commit the parties to raise the level of protection of their

7

This has led to a growing number of trade agreements which are increasingly less geographically bound and has also resulted in an increasing number of South-South trade agreements (Fiorentino et al., 2006). 8 See also Siroën et al., 2008; Lazo Grandi, 2009; Lukas/Steinkellner, 2010.

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labour laws progressively, while others only require that countries refrain from engaging in regulatory competition, i.e. the downgrading of labour regulation standards with a view to promoting exports or investment. Labour provisions may also provide for or encourage cooperation and technical assistance on labour issues, in the form of exchange of information and technical or financial assistance. The scope of the application of labour provisions in trade agreements also varies considerably. This may be restricted to labour issues concerning trade relations between the parties, or apply to trade issues more generally. Labour provisions may even apply more broadly to all labour issues within and between the parties, regardless of their being or not linked to trade. Importantly, labour provisions also differ according to the mechanisms established to ensure the effective application of the norms. For the purposes of the present chapter, a distinction is made between promotional labour provisions, focusing on supervision and/or capacity building, and conditional labour provisions, which provide – additionally or exclusively – for incentive or sanction-mechanisms.9 One can thus distinguish between incentives, sanction mechanisms as well as dialogue and monitoring. Some trade arrangements thus provide positive incentives for countries to comply with certain labour standards, for example in the form of additional trade concessions. Conversely, the breach of labour provisions may allow the parties to withhold trade advantages provided for by the arrangements (such as tariff preferences),10 or to resort to non-trade-related sanction mechanisms (such as monetary fines or the suspension of cooperative activities). In this regard, it should be noted though that the sanction-based labour provisions typically encourage prior consultation in order to avoid recourse to sanctions (Bourgeois et al., 2007). Finally, labour provisions may provide for regular dialogue among the parties, monitoring conducted by expert bodies, and/or cooperation activities (e.g. knowledge sharing and development cooperation). Importantly, labour provisions can either combine (some of) the above elements or focus on one of them.

9

While a large proportion of trade agreements contains references to labour concerns in their preamble or in their general objectives, this study remains limited to labour provisions that contain specific labour standards and/or a framework for cooperation, monitoring or consultation on this issue. For an analysis of the labour dimension of the preambles of selected trade agreements see Bourgeois et al. (2007). Also, the vast number of provisions on human resource development and labour migration lies outside the scope of the study. 10 Some trade agreements exempt the parties from the obligations under the trade agreement for certain labourrelated reasons. However, these provisions differ from others in that they do not contain requirements in the area of labour which a state has to comply with, but rather an exception to the obligations of the trade agreement. They are therefore not considered a labour provision for the purpose of this study. Most of these provisions are very limited, referring only to “prison labour”. Only one agreement refers to child labour (the Agreement on the Caribbean Community and Common Market of 1997).

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Figure 1: Different implementation mechanisms used in labour provisions Mechanisms used in trade-linked labour provisions

Conditional elements

Sanction-based

Promotional elements

Incentive-based

Dialogue-based

Cooperationbased

Elimination of trade preferences

Increase of trade preferences

Bilateral/plurilat eral dialogue

Knowledgesharing

Fines/Reduction of technical assistance

Increase of development cooperation

Monitoring through treaty body

Development assistance

2. The quantitative significance of labour provisions in trade arrangements The quantification of trade arrangements, in particular trade agreements, is a difficult task, considering their decentralized character and the speed of their proliferation in recent years (Fiorentino et al., 2006). The following calculations are based on the data provided as of December 2009 in the WTO Regional Trade Agreements Information System,11 which lists trade agreements notified to the WTO, and on the UNCTAD website, which lists General System of Preferences (GSPs) currently in force.12 In 2009, two of the eleven existing GSPs included conditional labour provisions while 37 of the 186 trade agreements in force at that time and notified to the WTO, had included 17 conditional and 20 promotional labour provisions (see table 1).13 As shown in Figure 2, Panel A, this was preceded by a steep rise of the number of trade agreements with conditional and promotional labour provisions during the past 20 years. While no agreement containing 11

See at http://rtais.wto.org/UI/PublicMaintainRTAHome.aspx. There are currently eleven unilateral GSPs, adopted by Australia, Belarus, Canada, the European Union, Japan, New Zealand, Norway, the Russian Federation, Switzerland, Turkey and the United States, see http://www.unctad.org/Templates/Page.asp?intItemID=2309&lang=1. See further Melchior (2005). 13 This figure refers to the so-called “integrated” trade agreements notified to the WTO. According to this method of calculation, trade provisions negotiated between the same parties on goods and services, respectively, are counted as one trade agreement regardless of whether they are strictly contained in the same agreement (which is most frequently the case) or not. Also, mere acts of accession to already existing trade agreements are not counted. 12

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labour provisions had entered into force in 1990, the number had risen to 14 promotional and seven conditional provisions, respectively, by 2005 and increased again in the following four years to 20 promotional and 17 conditional labour provisions in 2009.14

Table 1. Incidence of trade arrangements with labour provisions in 2009 Generalized systems Trade agreements of preferences Total Number including Total Number including Number including number conditional labour number conditional labour promotional labour provisions provisions provisions 11 2 186 17 20 Source: IILS, based on information collected on trade agreements and policies as of December 2009.

Figure 3 compares the share of such agreements that came into force over three successive periods. While only four percent of the trade agreements that entered into force in 1995-99 contained labour provisions, this share rose to eleven percent for 2000-04. More recently, the incidence of labour provisions in trade agreements was again multiplied by 3 for 2005-09, so that it comprised nearly one-third of all trade agreements which entered into force over that period.15

14

Note that the earlier Accession Agreements concluded by the EU are not included in these figures. The percentage refers to “integrated” trade agreements (see above) without the accession agreements and preceding agreements with states that are meanwhile EU member states. Where the labour provisions were added to the trade agreement after the agreement’s entry into force, the figure refers to the date of entry into force of the trade agreement.

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Figure 2. The rising trend in the number of trade agreements with labour provisions* Panel A. Evolution in numbers of labour provisions in bilateral and regional trade agreements between 1990 and 2009

Panel B. Evolution in numbers of labour provisions in bilateral and regional trade agreements concluded between developing economies between 1990 and 2009 9

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8

35

7

30

6

25 5

20

Condi tional Pr omoti onal

4

15 3

10 2

5 1

0 1990

1995

2000

2005

0

2009

1990

1995

2000

2005

2009

Note: * The data on 2009 refer to the period from 1 January of 2009 to 29 October of 2009. Source: IILS estimates based on the WTO Regional Trade Agreements Information System and information of national governments and treaty bodies.

Furthermore, the research revealed an important and under-researched trend: labour provisions are involved not only in North–South trade agreements, but also in a growing number of agreements between developing economies themselves. Indeed, there has been an increase in the number of agreements to which only developing economies are parties (Fiorentino et al., 2006). Figure 1, Panel B shows that while no South-South trade agreements contained labour provisions in 1990, nine trade agreements including labour provisions have been signed in 2009 between developing economies.16 An analysis of these provisions indicates that with one single exception, only promotional labour provisions have been involved in these cases.17 This finding raises an important consideration as regards the apparent preference for using promotional labour provisions and exchange of information between trading partners in developing and emerging economies, rather than conditional provisions.

16

In light of the fierce competition among developing countries, some academics see a need for a labour dimension in South-South trade relations in order to prevent a race to the bottom in terms of labour standards among these countries (see e.g. Chan/Ross, 2003). 17 Of these agreements, only the Taiwan, China-Nicaragua Trade Agreement contains a labour provision that can, in principle, lead to the suspension of trade benefits.

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Figure 3. Share of trade agreements with labour provisions compared to the total number of trade agreements entered into force from 1995-2009* 35

30

25

20 In percent 15

10

5

0 19 95-99

20 00-04

20 05-09

Note: * The data on 2009 refer to the period from 1 January of 2009 to 29 October of 2009. Source: IILS estimates based on the WTO Regional Trade Agreements Information System and information from national governments and treaty bodies.

The normative content of labour provisions in trade agreements has also evolved. About 60 percent of the labour provisions in trade agreements in force by the end of 2009 and examined in this study had made specific reference to the ILO 1998 Declaration or to ILO Conventions. As seen in this section, the research reveals that labour provisions have become an increasingly common element of trade agreements. However, as shown in the following section, the normative content and the legal implications of these labour provisions has varied significantly, warranting a closer analysis of the individual provisions.

3. Normative content and legal implications of the labour provisions18 3.1. Labour provisions in unilateral systems of trade preferences 3.1.1. The United States’ Generalized System of Preferences (GSP) and other unilateral instruments The incorporation of conditional labour provisions into the United States’ GSP dates back to 1984 and has not undergone fundamental reforms since then. This arrangement establishes as a condition for eligibility in the system’s trade preferences, that the candidate country “must have taken or is taking steps to afford internationally recognized worker rights”. To support the enforcement of this condition, submissions alleging a breach of this provision may be filed by the social partners or relevant civil society organizations. The US administration

18

The following discussion of bilateral and regional trade agreements draws upon the 186 trade agreements which were in force and notified to the WTO by 29 October 2009. In addition, ten agreements which had not been notified to the WTO by the end of December 2009 are taken into account for illustration purposes.

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retains, however, a margin of discretion regarding the application of this provision.19 Similar labour provisions have been inserted by the United States into further-reaching preferential trade arrangements, such as the Caribbean Basin Recovery Act (1990), the Andean Trade Preference Act (1991)20 and the African Growth and Opportunity Act (2000) (Greven, 2005).21

3.1.2. The European Union’s General System of Preferences In 1995, the European Union (EU)22 followed and introduced conditional labour provisions into its GSP, which has then considerably evolved though successive reforms (Novitz, 2005), as outlined in table 2.

Table 2. Evolution of labour provisions in the EU GSP, from 1995 to 2002 Generations 1st Generation (1995)*

Reference to ILO instruments Conventions No. 29 and 105

Enforcement mechanisms Withdrawal of trade preferences in the case of “systematic and serious violations” of these Conventions 2nd Generation Conventions No. 29 and 105 (for Withdrawal of trade preferences in case of (1999)* sanction-based labour provisions) “systematic and serious violations” of ILO Conventions No. 87, 98, and 138 (for Conventions No. 29 and 105 incentive-based labour provisions) Additional preferences for effective implementation of ILO Conventions No. 87, 98, and 138 3rd Generation 1998 Declaration, all Fundamental Withdrawal of trade preferences in case of (2002)* Conventions “systematic and serious violations” of the ILO Fundamental Conventions Additional preferences for effective implementation of the ILO Fundamental Conventions** Notes: * Dates refer to the year in which the EU regulation entered into force. ** Since 2006, countries additionally must have ratified all ILO Fundamental Conventions in order to be eligible for the additional preferences. Source: IILS, based on information collected on EU trade arrangements.

Particularly noteworthy in the evolution of the EU GSP is the shift from a merely sanctionbased approach to a twofold “carrot and stick” approach, involving both sanctions in the event of “systematic and serious violations” of the labour provisions, and additional 19

For instance, the application of the labour provisions of the US GSP can be waived for reasons of national economic interest, leaving authorities a significant margin of discretion (Greven, 2005). 20 The Andean Trade Preference Act was subsequently amended by the e Andean Trade Promotion and Drug Eradication Act of 2002. 21 In addition, the US Congress enacted trade regulation, which makes the continuous denial of labour standards covered by the GSP labour provisions subject to trade sanctions, including the withdrawal of trade benefits (Section 301(b) and (d) of the US Omnibus Trade and Tariff Act 1974, as amended in 1984) and banning from the US market goods produced by child labour (Bonded Child Labour Elimination Act 1930, as amended in 1997). However, as this study only deals with labour provisions in trade agreements and unilateral systems of trade preferences, these instruments are beyond the scope of this chapter. 22 After the entry into force of the Treaty of Lisbon on 1 December 2009 the European Union replaced the European Community (EC), which was until then the legal entity dealing with the trade issues of the EU Member States. Where this paper refers to specific legal acts, the original titles (referring to the EC) will be used.

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preferences in the event of full implementation of these rights.23 Rather than developing its own criteria for labour standards, the EU has increasingly and consistently referred to the relevant ILO conventions (Dispersyn, 2001, 2005). Though initially, the EU GSP only referred to some of the ILO Fundamental Conventions, the EU has, following the 1998 Declaration, successively increased the scope of its two labour provisions so that since 2002, all eight ILO Fundamental Conventions are covered.24

3.2. Labour provisions in trade agreements 3.2.1. Trade agreements concluded by the United States The Unites States have been the main proponent of conditional labour provisions in bilateral and regional trade agreements. The first agreement which linked labour provisions to economic consequences was the 1994 North American Agreement on Labor Cooperation (NAALC), a side agreement to the North American Free Trade agreement (NAFTA) concluded between the United States, Canada and Mexico. The United States developed this approach further in later trade agreements (see also Elliott, 2000; Rogowsky and Chyn, 2007), an overview of which is provided in table 3. Table 3. Evolution of labour provisions in US trade agreements from 1994 to 2009 Name and date of entry into force of the trade agreements NAFTA/NAALC (1994)

Reference to ILO instruments

Scope and content of labour provisions

Enforcement mechanisms

No

Strive for a high level of national labour laws in the area of CLS , as well as minimum working conditions** and migrant rights Enforcement of labour laws in these areas***

Trade Agreement with Jordan (2001)

ILO 1998 Declaration

Trade Agreements with Chile (2004), Singapore (2004),

ILO 1998 Declaration, Convention

“Strive to ensure” CLS (except nondiscrimination) and minimum working conditions Enforcement of labour laws in these areas*** No encouragement of trade or foreign direct investment through weakening labour laws “Strive to ensure ” CLS (except nondiscrimination) and minimum working conditions

Fines up to US$ 20 million /0.07 of total trade volume (goods) (only in the case of non-application of national labour law in the field of child labour, occupational safety and health and minimum wage) Regular trade sanctions under the regular dispute settlement mechanism of the agreement

23

Fines up to US$ 15 million in the case of non-application of

The latter is commonly referred to as “GSP+”. Since 2005, the labour provisions have been integrated into a more comprehensive arrangement, which also covers a broader range of human rights, environmental and good governance instruments, see Council Regulation (EC) No 980/2005 of 27 June 2005 applying a scheme of generalised tariff preferences, OJ L 169, 30.6.2005, pp. 1-43 and Council Regulation (EC) No 732/2008 of 22 July 2008 applying a scheme of generalised tariff preferences for the period from 1 January 2009 to 31 December 2011, OJ L 211, 6.8.2008, pp. 1-39. 24

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Australia (2005), No. 182** Enforcement of labour laws in these national labour law in Morocco (2006), areas*** these areas (to be paid Bahrain (2006), No encouragement of trade or investment into a special labour Central America through weakening of labour law in rights fund) contravention of the labour principles Dominican Republic (CAFTA-DR) contained in the agreement (2006), Oman (2009) Trade Agreements ILO 1998 Ensure respect of CLS as contained in the Regular trade sanctions with Peru (2009), Declaration, ILO Declaration, and enforcement of or monetary Panama, Colombia, Convention related national laws*** assessment under the and the Republic of No. 182* No weakening of labour law in a manner regular dispute Korea (not yet into affecting trade or investment if this settlement mechanism force) contravenes CLS of the agreement Notes: * Promoting compliance with Convention No. 182 is mentioned as a possible priority for labour cooperation. The United States–Australia Trade Agreement does not refer to this Convention. ** For the purposes of this table, the term “minimum working conditions” is used to describe minimum standards regarding hours of work, minimum wages and occupational safety and health. *** This applies to the extent that it “affects trade” or is (in the case of NAALC) “trade-related”. Source: IILS, based on information collected on US trade agreements.

While they advocate a high level of protection, early US trade agreements focus on the obligation to enforce national labour law in specific areas. Though all agreements posterior to the ILO 1998 Declaration refer to its standards, labour provisions of early trade agreements did not incorporate all CLS.25 This approach, however, has recently changed. The 2009 US trade agreement with Peru requires the parties to comply with all principles of the ILO’s 1998 Declaration without restrictions, in addition to enforcing their national labour laws.26 The labour provisions of US trade agreements also provide for an institutional framework that generally includes a consultative committee at the ministerial level and a national contact point with the administration of the respective parties.27 In addition, depending on the specific agreement, the labour provisions may also provide for a labour committee or labour council or, in the case of the NAALC, a Commission with its own Secretariat dealing with cooperation and dialogue activities relating to labour issues. All of these US agreements provide for follow-up mechanisms to deal with differences over the labour provisions, which may ultimately lead to economic consequences for the party in breach of the labour provisions. The NAALC thus allows fines up to a ceiling of US$ 20 million.28 However, these fines only apply to three out of the eleven areas of labour law mentioned in the agreement. With the notable exception of the United States–Jordan Trade Agreement,29 later agreements30 opted for fines. These fines are intended to be paid

25

A number of US trade instruments adopted after 1998 differ from the usually accepted CLS by excluding nondiscrimination and yet including others such as occupational safety and health, hours of work, or minimum wages. 26 See further on the new approach of the US-Peru Trade Agreement and its limitations Cabin (2009). A similar approach has also been used in the Trade Agreements between the United States and Colombia (signed in 2006) and the Republic of Korea (signed in 2007), respectively, which have yet to enter into force. 27 An exception to the latter is the US-Jordan Trade Agreement, which does not provide for the establishment of a national contact point nor for the submissions of complaints by third parties. 28 In cases where the fines are not paid, equivalent trade sanctions may be imposed. 29 In the case of the United States–Jordan Trade Agreement, the parties exchanged side letters prior to the adoption of the agreement, according to which no sanctions were to be used in the case of differences arising

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into a fund designed to address the labour rights violations concerned, capacity building and other measures (see van der Laat Echeverría, 2006, for CAFTA-DR). This approach has been reversed again in the most recent generation of US trade agreements, which makes breaches of labour provisions subject to the regular dispute settlement mechanism in charge of resolving trade disputes under these agreements. That said, however, the amicable resolution of disputes is always emphasized as preferable and dispute settlement mechanisms usually provide for numerous stages of consultation and reviews through panels and/or other neutral bodies before any economic disincentives can be undertaken. Distinguishing itself from the above models, the United States–Cambodia Textile Agreement from 1999 has taken a unique approach based on positive incentives rather than sanctions. Under this sector-specific agreement, enhanced market access was offered in exchange for compliance with certain labour standards. For this purpose, a number of targets in terms of compliance with labour standards were defined. For example, the quota for market access would be increased if the companies within the apparel sector – which account for 90 per cent of all Cambodia’s exports – met the criteria (Polaski, 2009).

3.2.2. Trade agreements concluded by Canada Similar to their US counterparts, labour provisions in trade agreements concluded by Canada are conditional in nature and have evolved from a focus on the enforcement of national labour law to requiring compliance with minimum internationally recognized labour standards (see table 4). Labour provisions have generally not been included in the texts of Canadian trade agreements themselves but in dedicated side agreements, as in the case of NAFTA/NAALC.

between the parties. However, the option of what other measures should be taken in the event of a breach of the labour clause was left open (Bolle, 2003). 30 Notably those between the United States and Australia, Bahrain, the Central-American countries and the Dominican Republic (CAFTA-DR), Chile, Morocco and Singapore, respectively.

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Table 4. Evolution of labour provisions attached to Canadian trade agreements from 1997 to 200931 Name and Reference Labour obligations date of to ILO entry into instruments force of the agreements Trade Strive for a high level of national labour laws No Agreement in the area of CLS, as well as minimum with Chile working conditions** and migrant rights (1997) Enforcement of national labour laws in these areas

Enforcement mechanisms*

Fines up to US$ 10 million (for the non-application of national labour law in the area of child labour, occupational safety and health and minimum wages) Strive for a high level of national labour laws Only modification of labour in the area of CLS, and to promote minimum cooperation activities (in the working conditions** and migrant rights case of the non-application of Enforcement of national labour laws in these national labour law in the areas areas) Respect for CLS, minimum working Fines up to US$ 15 million (in conditions** and migrant rights the case of Jordan: unlimited) Enforcement of national labour law in these for violations relating to issues areas ***** covered by the ILO 1998 Declaration; to be paid into a special labour rights fund

Trade ILO 1998 Agreement Declaration with Costa Rica (2002) Trade ILO 1998 Agreements Declaration, with Peru Convention (2009) , No. 182*** Colombia, Jordan, and Panama (not yet in force) Notes: * The enforcement mechanism only applies to “trade-related” matters. ** For the purposes of this table, the term “minimum working conditions” is used to describe labour standards regarding hours of work, minimum wages and occupational safety and health. *** The Convention is mentioned in the context of labour cooperation under this agreement. **** These agreements additionally preclude the Contracting States from encouraging trade or investment through weakening of labour law against the labour principles contained in the agreement. Source: IILS, based on information collected on Canadian trade agreements.

Labour provisions in Canada’s trade agreements, except the 2002 treaty concluded with Costa Rica, provides for fines in the case of non-compliance. These fines are to be gathered into a fund for the enhancement of labour rights and the remediation of implementation deficits.32 The maximum value of fines ranges from US$ 10 million in the older trade agreements, to US$ 15 million in more recent trade agreements. These arrangements are largely reproduced in the Trade Agreement between Canada and Colombia and Panama, respectively, signed in 2008 and 2010. By contrast, in the case of the Trade Agreement between Canada and Jordan, also signed in 2009, no ceiling is fixed to the fines for noncompliance with labour provisions. All Canadian agreements provide for dialogue between the parties and include technical assistance mechanisms. These activities are handled by a ministerial council for each agreement, assisted by national offices for each country. With regard to the enforcement

31

All agreements referred to are side agreements dedicated to labour issues which were concluded in the context of the respective trade negotiations. 32 See also Bakvis and McCoy (2009).

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mechanism, the emphasis is also placed on the amicable resolution of the dispute through consultation, rather than on the imposition of sanctions.33

3.2.3. Trade agreements concluded by the EU Most labour provisions in the EU trade agreements are only promotional in nature emphasizing technical assistance and development cooperation (Bartels, 2008). Also the labour provisions of the trade agreements concluded by the EU and its member states have undergone considerable evolution (Grynberg and Qalo, 2006; Bartels, 2007) with a tendency to a broadening their normative content and the scope of application.34 However, the EU has used various approaches depending on the trade partners (Orbie/Gistelninck/Kerremans, 2009). The main patterns at play are presented in table 5.35

33

Canada has also concluded a memorandum of understanding with Brazil on labour cooperation which is, however, not linked to a trade agreement, see Canada-Brazil Memorandum of Understanding on Labour Cooperation Memorandum of Understanding in the Area of Labour and Employment between the Labour Program of Human Resources And Skills Development Canada and the Ministry of Labour and Employment of the Federated Republic of Brazil, 2004, available at:

http://www.hrsdc.gc.ca/eng/lp/ila/niila/mou_text.shtml 34

The EU itself is based on a treaty which, among other things, extensively regulates the internal and external trade of the EU and also contains provisions on labour issues. The EU institutions have also adopted highly comprehensive labour legislation, including on minimum working and employment conditions and workers’ consultation (Bercussion, 2009). However, the EU’s stage of integration by far exceeds that of other integration agreements and EU legislation increasingly resembles national federal law in terms of its contents, scope and legal effect within the legal orders of the EU member states. For this reason, the EU labour legislation is not considered a labour provision for the purpose of this study. The same applies, for similar reasons, to the European Economic Area. 35 For an overview about the different trade agreements concluded by the EU see also Francois/McQueen/Wignaraja (2005).

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Table 5. Different types of labour provisions in EU trade agreements Name and date of entry into force of the trade agreements


Scope of provisions

Trade Agreements with the Palestinian Authority (1997), Morocco (2000), Israel (2000), Algeria (2005), Cameroon (2009) Trade Agreement with Chile (2003)

No

Cooperation and/or dialogue on selected issues related to labour standards

Fundamental Conventions

Trade Agreements with South Africa (2000), ACP Countries (2003)* Trade Agreement with the CARIFORUM Countries (2008)

Fundamental Conventions

Commitment to give priority to the respect for basic social rights, including through the promotion of ILO Fundamental Conventions and social dialogue Cooperation on various labour and social issues Reaffirms the parties’ commitment to the ILO’s CLS Cooperation on various labour and/or social issues

1998 Declaration, Fundamental Conventions

Commitment to (i) ensuring compliance with ILO CLS, (ii) not weakening or failing to apply national labour legislation to encourage trade or investment Cooperation and monitoring framework with stakeholder participation, optional ILO consultation Framework for amicable solution of differences – if the dispute cannot be solved through consultation, appropriate measures other than on trade sanctions may be taken (e.g. readjustment of cooperation activities)

Notes: * This agreement has not been notified to the WTO and is therefore not taken into account in the above statistics. Source: IILS, based on information collected on EU trade agreements.

Certain agreements provide specifically for cooperation and dialogue in a number of different areas.36 Beyond this approach, the EU has since the late 1990s increasingly made reference to ILO CLS in its trade agreements (European Commission, 2001, 2004). By far the most comprehensive approach vis-à-vis labour provisions has been taken in the EC–Cariforum37 Trade Agreement of 2008, which is described in greater detail below. In line with a new strategy from the European Commission to include Decent Work in its development policy (European Commission, 2006), the labour provisions of this agreement mention for the first time the concept of “Decent Work”, referring to the ILO Declaration of 1998 and the Fundamental Conventions. Furthermore, the agreement submits the parties to a number of concrete commitments.38 The parties may request consultations in the event of differences over the interpretation and implementation of labour provisions which may involve the consultation of an expert committee and the ILO and eventually lead to a dispute before the regular dispute settlement mechanism. As a unique feature in EU trade agreements, the EC-Cariform Trade Agreement allows that a labour dispute may lead to sanctions if no agreement is reached. However, these measures may not affect trade 36

It should be noted though that the EU frequently provides technical assistance and cooperation in the area of labour standards to its economic partners even where this is not explicitly stipulated in the text of the trade agreement. 37 Other than the EU and its member states, the following states are party to this Agreement: Antigua and Barbuda; Bahamas; Barbados; Belize; Dominica; Dominican Republic; Grenada; Guyana; Jamaica; Saint Kitts and Nevis; Saint Lucia; Saint Vincent and the Grenadines; Suriname; as well as Trinidad and Tobago. 38 Similar to certain other labour provisions, the precise scope of this commitment is not exactly clear, given that the agreement at the same time recognises “the right of the Parties and the Signatory CARIFORUM States to regulate in order to establish their own social regulations and labour standards in line with their own social development priorities, and to adopt or modify accordingly their relevant laws and policies” (Article 192).

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concessions, but rather, only deal with other issues covered by the agreement, such as cooperation activities.39 This agreement also includes a cooperative framework that involves the possibility to request ILO technical assistance and policy advice. Some scholars have seen this approach as the potential basis for more comprehensive labour provisions in the EU’s trade agreements (Siroën et al, 2007). The EC–Republic of Korea Trade Agreement which is due to enter into force in 2011 takes a similar approach, opting for a joint chapter on labour and environmental issues. Its commitments largely correspond to those contained in the EC–Cariforum Trade Agreement with the additional commitment to implement any ILO Conventions ratified by the respective parties, including EU member states. However, unlike the EC–Cariforum Trade Agreement, it also provides for the creation of two Domestic Advisory Groups (one for each party), which will provide advice on the implementation of the labour provisions. The EC–Republic of Korea Trade Agreement also differs from the EC–Cariforum Trade Agreement to the extent that the former explicitly excludes recourse to the regular dispute settlement mechanism and possible sanctions (see further Lukas/Steinkellner, 2010).

3.2.4. Trade agreements concluded by Asian and African countries and areas40 Aside from trade agreements adopted by the United States, Canada, and the EU, labour provisions are also increasingly inserted in trade agreements concluded among other trade actors. For instance, trade agreements concluded by Asian countries increasingly involve a labour dimension, often in the form of side arrangements.41

39

For an overview of the framework for cooperation of this agreement and possible cooperation activities see Myrstad (2008). 40 Given that trade agreements including labour provisions in African, Asian, Latin American and Caribbean trade agreements, apart from those with US, EU or Canadian participation are still rather scarce, the following two section deal with them jointly. 41 In the context of the Agreement on the South Asian Association for Regional Cooperation (SAARC), a Social Charter was adopted in 2004 which deals with women’s and children’s rights without, however, expressly touching upon labour issues.

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Table 6. Labour provisions in trade agreements concluded by Asian countries and areas Name and entry into force of the trade agreement s

Reference to ILO instrumen ts

Commitment to certain minimum labour standards

Cooperation on labour issues

Specific institutions

Yes

Not encourage trade or investment through weakening labour laws Yes

New Zealand– Thailand Trade Agreement * (2005) Chile– China Trade Agreement * (2006) TransPacific Partnershi p Agreement * (2006)*** * New Zealand– China Trade Agreement * (2008) Japan– Philippines Trade Agreement (2008) Taiwan, China – Nicaragua Trade Agreement (2008) Japan– Switzerlan d Trade Agreement (2009) New Zealand– China Trade Agreement * (to enter into force in 2011) Notes:

1998 Declaration

Yes

Labour Committee

Yes

No**

No

No

Yes

No

No

1998 Declaration

Yes

Yes

Yes

National contact points

Yes

1998 Declaration

No

Yes

Yes

No (but senior official meetings)

No

No

Yes

No

No

No (but discussions of labour issues of mutual concern possible) Yes***

No

Yes

Yes

Yes

Labour Affairs Committee

Yes***

No

No

Yes

No

No

Yes***

1998 Declaration

No

Yes

Yes


Yes

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* The labour provisions are contained in a labour side arrangement or memorandum of understanding. ** However, the preamble of this agreement refers to objectives of the ILO. *** The labour provisions of this agreement are subject to the regular dispute settlement mechanism, which may as a last resort entail the suspension of trade benefits.42 **** Parties to this Agreement are: Brunei Darussalam, Chile, New Zealand, and Singapore. Source: IILS, based on information collected on Asian trade agreements.

As is apparent from table 6, most of these labour provisions provide for cooperation in labour matters mostly through the promotion of the exchange of information and of joint projects. Beyond cooperation, almost all of these arrangements entail some sort of additional commitments, among which provisions against the weakening of labour law for trade and investment purposes are the most widespread. As regards their form and their legal consequences, two main models can be distinguished. The first category refers to labour provisions that are contained in side arrangements or memoranda of understanding. These arrangements do not entail legal consequences in case of a breach,43 although two of them provide for amicable consultations for the resolution of differences.44 The second category comprises labour provisions that are incorporated directly into the trade agreement itself and contain not only promotional but also conditional labour provisions. In other words, disputes regarding interpretation and application under all three agreements may be submitted to the regular dispute settlement body and may lead to trade sanctions. This is the case of the Taiwan, China–Nicaragua, the Japan–Philippines, and the Japan–Switzerland Trade Agreements.45 A special case is the treaty establishing the Association of Southeast Asian Nations (ASEAN) of 1992. While not containing labour provisions, the member states adopted a separate action plan on occupational safety and health in 2007.46 This action plan commits ASEAN member states to develop a checklist based on ILO’s international labour standards and best practices, which aims to enable member states to align their policies. The action plan encourages the exchange of experiences and the involvement of the ILO through capacity building.47 Similarly, in the African region three regional trade agreements contain a labour dimension. These labour provisions are entirely promotional in nature. They do not embody minimum labour standards nor do they require the application of national labour law but focus entirely on cooperation in labour matters, as detailed in table 7.

42

However, this may in practice be difficult because the suspension of benefits would have to correspond to the economic disadvantage caused by the breach of the labour provision, which may be difficult to prove. 43 The Labour Side Arrangement between New Zealand and Thailand explicitly states that it does “not legally bind the Participants”. 44 These are the Labour Side Arrangement concluded between New Zealand and Thailand and the Memorandum of Understanding on Labour Cooperation attached to the Transpacific Partnership Agreement. 45 The normative content of these agreements, however, still varies. While the Taiwan, China–Nicaragua Trade Agreement contains a commitment to comply with certain labour rights and to implement national law in these areas, the Japan-Philippines and the Japan-Switzerland Trade Agreement only preclude the state parties from lowering the level of their labour laws with the intention of encouraging investment. 46 See at: http://www.aseansec.org/20917.pdf. 47 Along these lines, a memorandum of understanding between the ILO and ASEAN was signed, providing, among other things, for exchange of information and joint workshops, available at: http://www.aseansec.org/20686.htm.

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Table 7. Labour provisions in African trade agreements Name and date of entry into force of the trade agreements Treaty of the Economic Community of West African States (ECOWAS) (1993)*

Reference to ILO instruments –

Agreement Establishing the Common Market for Eastern and Southern Africa (COMESA) (1994) Treaty for the Establishment of the East African Community (EAC) (2000)

– –

Scope of labour provisions Cooperation regarding labour law harmonization and the promotion of women’s professional organizations Cooperation regarding employment conditions and labour law Cooperation on employment and working conditions with an emphasis on gender equality, including the abolition of discriminatory law and practice

Note: * This agreement was revised in 2005. Source: IILS, based on information collected on African trade agreements.

3.2.5. Trade agreements concluded by Latin American and Caribbean countries Labour provisions in Latin American and Caribbean trade agreements first emerged in the context of regional integration during the 1990s. While the three trade agreements (i.e. the agreements on the Andean Community48, the Caribbean Community49 and MERCOSUR50) differ in their integration approaches, they all include a labour dimension of promotional character (see further Díaz Barrado, 2003).51 Each of these labour provisions establishes follow-up mechanisms, either through technical cooperation or monitoring by a specific body or committee (see table 8).

48

Current member states are Bolivia; Colombia; Ecuador; and Peru. Current member states are Antigua and Barbuda; Bahamas; Barbados; Belize; Dominica; Grenada; Guyana; Haiti; Jamaica; Montserrat; Saint Kitts and Nevis; Saint Lucia; Saint Vincent and the Grenadines; Suriname; as well as Trinidad and Tobago. 50 Current member states are Argentina; Bolivarian Republic of Venezuela; Brazil; Paraguay; and Uruguay. 51 For a historical review of the labour dimension these three regional trade agreements see Lazo Grandi (2009). 49

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Table 8. Labour provisions in Latin American and Caribbean regional trade agreements Name and date of entry into force of the trade agreemen t Treaty on the Caribbean Communit y and Common Market (CARICO M) (1973)

Cartagena Agreement on the Andean Communit y (1988)

Specific instruments


Commitments to certain minimum labour standards

Framework for Labour Cooperation or Monitoring

Text of the Revised Treaty (1997)

No

No

Charter of Civil Society for the Caribbean Community of 1995

No

Declaration of Labour and Industrial Relations Principles of 1998 Andean Instrument on Occupational Safety and Health (1999, as revised in 2004)

“International Labour Conventions” No

Yes (including freedom of association, child labour, working conditions and occupational safety and health) Yes (covering numerous areas of labour law, including CLS) Yes (in the area of occupational safety and health)

Technical Cooperation within the Council for Human and Social Development Review of progress by the Secretary-General

No

Technical assistance through a Labour Committee, assistance in case of differences regarding the interpretation of the Andean Instrument MERCOS Social-Labour 1998 Declaration Yes (covering numerous Dialogue, cooperation UR (1991) Declaration (1998) areas of labour law, and review of progress including CLS) by the Comisión SocioLaboral Source: IILS, based on information collected on Latin American and Caribbean trade agreements.

Latin American countries have also included labour provisions in more recent bilateral trade agreements or related side arrangements. Apart from the conditional labour provisions contained in the Taiwan-Nicaragua Trade Agreement mentioned above, the gradual evolution of the labour provisions in Chile’s trade agreements is particularly noteworthy. Besides becoming party to trade agreements entailing social provisions with Canada, the European Union, and the United States, Chile also has successively included labour provisions in other trade agreements, in particular with other developing economies (table 9).52 With two exceptions, the labour provisions of these agreements all contain commitments to certain minimum labour standards and the enforcement of national labour law as well as references to the ILO’s 1998 Declaration. As to their form, the approaches chosen include memoranda of understanding or agreements on labour cooperation as well as labour chapters inserted into the agreement’s text, all of which focus on promotional rather than conditional elements. 53 52

In addition to this, it should be noted that a joint declaration was adopted at the chancellery level by the parties to the Chile- Japan Free Trade Agreement, which entered into force 2007 (see also Lazo Grandi 2009). A reference to a Labour Cooperation Agreement is also made in the most recent Peru-China Trade Agreement of 2010. However, the text of the Memorandum of Understanding on Labor and Social Security Cooperation of the Peru-China Trade Agreement was not electronically available at the time of writing. 53 This agreement, however, does not provide for recourse to the Trade Agreement’s regular dispute settlement mechanism, which may entail trade sanctions.

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Table 9. Labour provisions in Chile’s trade agreements54 Name and date of entry into force of the trade agreement

Referen ce to ILO instrum ents

Commitm ents to certain minimum labour standards

Cooper ation on labour issues

Specific institutions

Consultatio n mechanisms in case of differences

No

Not encourage trade or investment through weakening labour law No

China– Chile Trade Agreement* (2006) Trans-Pacific Partnership Agreement* (2006) Chile-Panama Trade Agreement* (2008) Australia–Chile Trade Agreement (2009) Chile–Colombia Trade Agreement (2009) Peru-Chile Trade Agreement* (2009) ****

No**

Yes

No

No

1998 Declarat ion

Yes

Yes

Yes


Yes

1998 Declarat ion

Yes

Yes

Yes

Yes

1998 Declarat ion

No

No

Yes

National Contact Point; Joint Labour Cooperation Committee National Contact Point

1998 Declarat ion

Yes

Yes

Yes

National Contact Points, High-Level Meetings

Yes

Yes***

Yes***

Yes

Yes

Joint Labour and Migration Cooperation Committee Working groups or sub-committees dealing with labour cooperation may be established

No

No

Chile-Turkey 1998 Yes Yes Yes No Trade Declarat ion Agreement (to enter into force in 2011) Notes: * The labour provisions are contained in a labour side arrangement or memorandum of understanding. ** However, the preamble of this agreement refers to objectives of the ILO. *** This text additionally refers to the UN International Convention on the Protection of the Rights of All Migrant Workers and Members of Their Families of 1990. **** This trade agreement had not been notified to the WTO at the time of writing and has therefore not been taken into account in the statistics presented above. Source: IILS, based on information collected on Latin American trade agreements.

Based on this mapping of the labour provisions included in the various types of trade agreements and arrangements worldwide, the question of the phenomenon’s practical implications arises. This aspect will be tackled in the following section.

54

This excludes Chile’s trade agreements with Canada, the EU, and the United States.

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4. What are the practical implications of labour provisions? 4.1. Experiences with the sanction-based elements of labour provisions 4.1.1. Sanction-based labour provisions as an instrument for the implementation of labour standards Sanction-based labour provisions are a potentially powerful instrument. Labour provisions involving sanctions may influence the countries’ behaviour in a number of ways. Apart from their immediate economic effects which in itself may constitute a considerable disincentive to violate labour standards, the application of sanctions in the case of the breach of a labour provision are likely to affect the reputation of the country in violation, and thus harm its economic and political relations with other countries (Cleveland, 2001; Kryvoi, 2008). Though each situation is specific, the threat of such disadvantages may provide political leverage beyond the economic scope of the agreement. Having said that, it is important to understand that, even in the cases where a legal procedure is provided for the enforcement of the labour provisions, a considerable degree of political negotiation between governments is involved (see e.g. Dombois, 2006 with regard to the NAALC). Most of the labour provisions, including those of the EU GSP (Novitz, 2005), the US GSP (Alston, 1993)55 and the US and Canada trade agreements (Martin, 2004; Greven, 2005),56 leave considerable discretion as to whether to take measures and what kind of action shall be taken. It is therefore not surprising that certain complaints under the labour provisions are said to have been turned down for reasons that had little to do with the labour rights violations themselves (e.g. Compa/Vogt, 2001). Also, a study by Schneuwly (2003) suggests that the US was more likely to reject a petition where the country was a rather important trading partner, or where a significant number of US companies were active in the country and where the country showed a higher degree of democracy.57

4.1.2. Cases filed Despite the above, under the framework of the US GSP, no less than 57 cases relating to labour standards (detailed in table 10) have been examined by the US Trade Representative (USTR) from 1985 to 2007, 13 of which have led to the withdrawal of preferences. In five cases, the preferential treatment was later reinstated.

55

The labour clause of the US GSP provides for withdrawal only if a trade party is not “taking steps” to guarantee labour standards and can be waived for reasons of national economic interest. Decisions of the USTR can, in principle, be challenged before US courts which has been tried once – however, it the District Court of Columbia dismissed the case, arguing that the plaintiffs did not have legal standing (Elliot 1998). 56 Also, they exclude any action from the scope of the clause that is based on the “reasonable exercise of the agency’s or the official’s discretion” or “results from bona fide decisions to allocate resources”. See for example Article 49 of NAFTA. See for overview of the related debate Piquer (2005). 57 The fact that, as scholars with internal knowledge of the US administration have noted, the US officials in practice usually base their assessment at least in part on relevant ILO violations (Polaski 2004) may to some extent alleviate this concern.

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Table 10. Petitions under the labour provisions of the US GSP, 1985 to 2007 Total Petitions accepted number and investigations of self-initiated by cases USTR 111 57 Source: USTR, 2008.58

Petitions rejected

Countries’ benefits wholly or partially suspended

54

13

Petitions resolved through steps taken by the country in question 34

Reinstatement of benefits following a suspension 5

In the case of the EU GSP, two investigations have led to the withdrawal of trade preferences under the sanction-based labour provision since the introduction of the labour provisions into this trade arrangement in 1995. The two cases concerned systematic use of forced labour in Myanmar and systematic violations of workers’ freedom of association and the right to collective bargaining in Belarus.59 In both cases the ILO supervisory mechanisms had repeatedly criticized the violations at stake and, considering the seriousness of the allegations, had established a Commission of Inquiry to carry out investigations at the national level. When the EU withdrew Belarus’ tariff preferences in 2007 due to violations of trade union rights in that country, it based itself mainly on the relevant report of the ILO Commission of Inquiry and Belarus’ failure to implement the relevant recommendations (see also Orbie and Tortell, 2009).60 Another complaint was filed with the Commission concerning bonded child labour in Pakistan. Here, the EU opted for a different approach, refraining from initiating an investigation and focusing instead on political dialogue (Brandtner and Rosas, 1999; Tsogas, 2000).61 To date, none of the labour provisions in trade agreements examined in this paper has led to any sanctions (Witte, 2008). However, some of the labour provisions included into US trade agreements have been used to a certain extent. For example, 37 submissions were presented under NAALC by 2008 (see table 11). According to the overwhelming preference for dialogue (Perez-Lopez, 1995; Englehart, 1997), none of them went beyond the early stage of ministerial consultations that could have led to the establishment of an Expert Commission or even a panel which might have led to sanctions. Over half of these cases have been followed up by cooperation activities, such as joint working groups or seminars.62

58

The apparent discrepancy between the number of petitions accepted and the number of resolved cases is explained by the cases currently under review, a number of cases where multiple petitions were filed for the same country and were later merged into a single case, and instances in which cases were allowed to expire. 59 Council Regulation (EC) No. 552/97 of 24 March 1997, temporarily withdrawing access to generalized tariff preferences from the Union of Myanmar, OJ L 85, 27 Mar. 1997, pp. 8–9; Council Regulation (EC) No. 1933/2006 of 21 December 2006 temporarily withdrawing access to the generalized tariff preferences from the Republic of Belarus, OJ L 405, 30 Dec. 2006, pp. 35–40. 60 By contrast, in the earlier withdrawal decision against Myanmar, the EU noted the critiques of the competent ILO bodies but did not wait for the adoption of the Commission of Inquiry report on that issue (Ebert, 2009). 61 In this context, the EU also increased its support to the activities of the ILO’s Programme on the Eradication of Child Labour in Pakistan (Greven, 2005). One of the distinctive elements of this case compared to the cases of Myanmar and Belarus has been seen in the willingness of the Pakistani government to take substantial steps to remedy the problems at stake (Brandtner and Rosas, 1999, Kryvoi, 2008). 62 Compa notes, however, that many of these have been boycotted by unions and NGOs, who alleged that the workshops were not relevant to the problem of the case (Compa and Brooks, 2008, p. 9)

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Table 11. Cases filed under the NAALC between 1995 and 2008 Number of Cases on Cases on the Cases on Cases accepted cases Mexico United States Canada for review 37 23 11 2 27 Source: IILS statistics based on data from the NAALC Secretariat63

Follow-up in the form of cooperation activities 17

With two exceptions, at the time of writing, the official complaint mechanism labour provisions of other US trade agreements (Witte, 2008) or Canadian labour side agreements64 other than NAALC had not been used,65 despite certain procedural improvements in comparison to NAALC (Sagar, 2004). The most notable case was filed by AFL-CIO and six Guatemalan trade unions against Guatemala in 2008 under DR-CAFTA (Compa and Brooks, 2008).66 The complaint alleges Guatemala’s failure to effectively enforce its labour laws, in particular regarding cases of anti-union violence. This complaint led the US Government to request formal consultations in August 2010, for the first time in the history of trade. In May 2011, the US Government took the proceedings to the next step requesting a meeting of the Free Trade Commission under the Agreement in light of Guatemala’s failure to address the US’ concerns. The case, which might lead to arbitral dispute settlement and, as a last resort, to fines of US$15 million, continues to be under review. A second case under CAFTA-DR was filed by a coalition of Costa Rican and North American trade unions in 2010 against Costa Rica and concerned State interference with trade union affairs.67 This complaint was, however, withdrawn after the issue had been resolved by the State.

4.1.3. Evidence of impact of the sanction-based labour provisions on the situation of workers There is no clear-cut answer to the question of the effectiveness of sanction-based labour provisions on actual workers’ situations. Empirical evidence is so far rather limited, referring mostly to labour provisions of the US trade arrangements, and the studies that have been carried out mainly rely on qualitative rather than quantitative analysis (Bourgeois et al. 2007; Aasen, 2009). While scholars have in general been sceptical about the labour provisions’ adequacy to address the challenges as regards labour standards compliance (Hogan, 2006;

63

One of the cases relates to all three countries and is therefore not included in this calculation. See the website of the Canadian government at: http://www.hrsdc.gc.ca/eng/lp/ila/NIILA/Public_Communications_CCRALC.shtml and http://www.hrsdc.gc.ca/eng/lp/ila/NIILA/Public_Communications_CCALC.shtml. 65 This is also confirmed by a number of case studies, see, for example, Nanto (2008) and Compa and Brooks (2008). 66 The complaint is available at: http://www.aflcio.org/issues/jobseconomy/globaleconomy/upload/guatemala_petition.pdf. 67 The complaint filed is available at: http://www.longshoreshippingnews.com/wp-content/uploads/2010/07/0720-10-ILWU-SINTRAJAP-ANEP-DR-CAFTA-Complaint-to-OTLA-Concerning-the-Government-of-CostaRicas-Failure-to-Follow-its-Labor-Laws-Under-the-ILO.pdf. 64

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Pagnattaro, 2006; Glass-Hess, 2007),68 there is evidence that in some cases, labour provisions have had an impact on the labour situation. As concerns the unilateral labour provisions of the US GSP, some scholars have argued that the threat of withdrawal of tariff preferences has, in certain cases, led to improvement in the situation of workers (Elliott, 1998; Frundt, 1998; Scherrer/Greven/Frank, 1998; Compa and Vogt, 2001; Schneuwly, 2003). Looking at the case of the Dominican Republic, Schrank (2007, 2009) argued that US pressure based on the US GSP before 2005 contributed to a major reform of the labour law inspectorate towards a meritocracy-based system. On the other hand, Rodas-Martini (2006) has contended that the US unilateral labour provisions, while helping to solve certain “specific union problems (…) or fine-tune labor code articles” have not resulted in an “appreciable impact in terms of improving working conditions” in Central-America. In general, the literature suggests that the effect of these US labour provisions on the situation of workers depends to a large extent on the presence of strong domestic social partners (Greven, 2005; Witte, 2008). In addition to this necessary condition for success, other factors, including the economic dependence of the beneficiary country on market access and its own technical capacity for remediation of problems, also seem to affect the impact of the US GSP’s labour provision (Elliott, 1998; Elliott and Freeman, 2003).69 Scholars generally agree that the impact of NAFTA labour provisions on labour standards of the parties has been rather limited and that few cases have resulted in direct substantial improvement of workers’ situations (Griffin, 1997; Dombois/Hornberger/Winter 2003, Greven, 2005; Dombois, 2006; Finbow, 2006; Schurtman, 2005). In the absence of a consistent application of sanctions, authors argue that the main enforcement tool has been public censure (Guerra/Torriente, 1997; Mestral, 1998), the results of which are difficult to measure (Dombois, 2006). Factors such as difficulty of implementation (Finbow, 2006) and lengthy or cumbersome procedures (Compa and Brooks, 2008, p. 120) have been cited as possible reasons for the limited results of the NAALC by trade unions and NGOs in the late nineties (e.g. Blackett, 2007). Nevertheless, labour advocates have found it useful, in certain situations, to use NAALC procedures as a part of larger activist campaigns (Buchanan and Chaparro, 2008). For instance, Compa (2006) identifies cases where labour advocates have used the NAALC procedures in order to change the behaviour of companies and government authorities although no sanctions were imposed. This occurred in particular through public pressure and in cases where the reports of the National Administrative Offices were critical. Scholars also increasingly highlight some indirect and long-term advantages gained through NAALC. These include better knowledge and increased understanding of the other parties’ labour law systems and the different domestic challenges faced by the parties (Compa and Brooks, 2008). Furthermore, the NAALC has spurred the formation of a number of transnational alliances between unions and NGOs, whose potential for creating synergies for cross-border labour advocacy goes way beyond the NAALC labour provisions (Kay, 2005; Schurtman, 2005, 2008; Buchanan and Chaparro, 2008).

68

Some concerns have been voiced that the leverage for applying sanctions for worker rights violations under CAFTA may be more limited than under the US GSP and the Caribbean Basin Initiative labour clause that applied earlier to the CAFTA states (Hogan, 2006: 522). 69 These authors carry out an extensive analysis based on cases under the US GSP between 1985 and 1996.

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It may be too early to assess the impact of labour provisions in more recent trade agreements (Rogowsky/Chyn, 2007). Despite the general scarcity of complaints brought under these trade agreements, some of these agreements concluded by the United States have reportedly brought about positive side effects for labour. One example is the US–Chile Trade Agreement, which is said to have had a certain legitimizing effect for the Chilean labour legislation in place against countervailing pressure to lower the level of protection of workers (García Hurtado, 2006). Finally, it is important to note that there is so far little evidence of protectionist use of these labour provisions (Elliott/Freeman 2003; DiCaprio, 2004; Polaski/Vyborny, 2006; Murillo/Ruiz, 2006). The alleged risk of a protectionist application of the labour provisions in trade arrangements was a major argument of developing countries against the adoption of such labour provisions in the trade context, especially in the debate on amendment of the WTO treaty (Bhagwhati, 1995). While the definitive effects of the sanction-based labour provisions in trade arrangements have yet to be established, recent studies indicate that they have, as a minimum, not hampered legitimate trade interests of developing countries by allowing for protectionist measures.

4.2. Experiences with the incentive-based elements of labour provisions So far, the instances of implementation of some incentive-based labour provisions have been rather scarce, but the first evidence points to positive outcomes. As for the EU GSP, currently 14 countries benefit from additional tariff preferences under the EU GSP incentive-based labour provision.70 Orbie and Tortell (2009) show that several countries have ratified ILO Fundamental Conventions in order to be eligible for this arrangement. However, the impact of these arrangements on the actual improvement of labour standards in the countries concerned is less clear.71 On the other hand, the US– Cambodia Textile Agreement has received rather positive evaluations regarding the impact of this innovative experience (e.g. Kolben, 2004; Polaski, 2009) (see Box 1).72

70

See Commission Decision 2008/938/EC of 9 December 2008 on the list of the beneficiary countries which qualify for the special incentive arrangement for sustainable development and good governance, provided for in Council Regulation (EC) No 732/2008 applying a scheme of generalised tariff preferences for the period from 1 January 2009 to 31 December 2011 (notified under document number C(2008) 8028) (2008/938/EC); Commission Decision 2009/454/EC of 11 June 2009 amending Decision 2008/938/EC on the list of the beneficiary countries which qualify for the special incentive arrangement for sustainable development and good governance, provided for in Council Regulation (EC) No 732/2008 applying a scheme of generalised tariff preferences for the period from 1 January 2009 to 31 December 2011; Implementing Regulation (EU) No 143/2010 of the Council of 15 February 2010 temporarily withdrawing the special incentive arrangement for sustainable development and good governance provided for under Regulation (EC) No 732/2008 with respect to the Democratic Socialist Republic of Sri Lanka. 71

See further on this Ebert (2009). Also, some scholars, including Orbie and Tortell (forthcoming), have argued that countries have been accorded preferences despite being cited by ILO bodies bodies for labour standards violations. 72 According to Polaski, this “program [is] arguably the best investment the United States has ever made in promoting international labor rights” (Polaski, 2004, p. 25).

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Box 1. The US–Cambodia Textile Agreement: an experience with positive incentives

The approach taken with the US-Cambodia Textile Agreement has been considered innovative for a number of reasons. An important feature was the alignment of government and business interests through the use of positive incentives: verified compliance with labour standards was rewarded with increased export quotas (Polaski and Vyborny, 2006). Participation in the monitoring programme by the ILO was mandatory and a precondition for obtaining an export licence, which ensured the full participation of all exporting firms in the sector. The ILO was entrusted with carrying out comprehensive monitoring at the firm level and published its detailed findings on the Internet, thereby providing transparent information on compliance with labour standards to buyers concerned with brand reputation. Also, capacity building activities aimed at strengthening state regulatory capacity and the role of workers’ and employers’ associations contributed to a more favourable environment for the promotion of labour standards. Some authors have argued that a virtuous cycle was created between improvements in labour conditions, growth of exports and employment creation (Polaski, 2008; Berik and van der Meulen Rodgers, 2007). The number of jobs in the Cambodia apparel sector tripled between 1998 and 2004 (Wells, 2006) and export volumes rose from US$ 500,000 in 1998 to US$ 2.8 million in 2004 (Polaski, 2008, p. 11). While acknowledging some improvements regarding working conditions, other authors have pointed to continued difficulties related to overtime, low wages and resistance by companies to collective bargaining (Wells, 2006; Miller, 2009). A World Bank study found that a market niche had emerged in the Cambodian apparel sector, based on compliance with labour standards, and that the extension of this approach to other sectors might be fruitful (World Bank and International Finance Corporation, 2005).73

4.3. Experiences with the promotional elements of labour provisions In light of the limited practical use of sanction mechanisms, it has been argued that the US trade agreements’ most important implementation feature is probably the element of cooperation (see already Griffin, 1997). Extensive cooperation activities have been conducted under NAALC most of which were conferences, workshops and research activities (see table 12). However, the number of these activities has declined in recent years (Finbow, 2006). Also, while some early commentators have pointed to positive impacts of the cooperation activities (e.g. Otero, 1997), others have questioned the design of the cooperation (Polaski and Vyborny 2006; Finbow, 2006). According to Polaski, capacity building has been most effective where cooperative activities have been directly linked to the problems in specific cases (Polaski/Vyborny, 2006).

73

For a critical current perspective see also Arnold and Shih (2010).

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However, this has seldom been the case (Finbow, 2006). The impacts of the cooperation approach regarding capacity building or improved implementation of labour legislation have therefore been considered limited (Polaski 2004). Nonetheless, Compa and Brooks (2008) see the cooperative activities as a necessary condition for the creation of a favourable environment for sustained functioning of the NAALC. Table 12. Cooperation Activities under NAALC 1994-2005 Time period

Worker Occupational Migrant Gender Labour Market Others Total Rights Safety and Health worker rights Discriminatio Development n 1994-1999 8 25 0 4 7 2 46 2000-2005 4 6 5 3 5 2 25 Source: Finbow (2006)

In the framework of the United States–Chile Trade Agreement, a practical approach to cooperation has been adopted, involving activities to enhance Chile’s institutional capacities by improving staff skills and enhancing institutional procedures for the application of labour law (García Hurtado, 2006).74 Rosado Marzán (forthcoming) considers that cooperation in the framework of the US-Chile Trade Agreement could in particular contribute to strengthening Chile’s labour enforcement and judicial system. This approach has been reinforced in the context of CAFTA, where the US Government has provided US$ 20 million per year since 2006 for capacity building in the area of labour standards in the CAFTA-DR countries.75 Based on a general White Paper on capacity building regarding labour issues,76 action plans have been developed by the US administration and the individual CAFTA states in consultation with the national social partners. These activities include a mechanism to verify progress toward the goals set out in the White Paper77 which, among other things, involved monitoring by the ILO.78 Cooperation activities have focused mainly on five areas, namely: (i) strengthening of labour ministries; (ii) improving the labour justice system and legal advice for workers; (iii) reducing discrimination in the maquilas; (iv) combating child labour; and (v) strengthening the culture of compliance regarding labour issues. While the US Department of Labor considers that a number of improvements have been made, in particular regarding the fight against child labour, NGOs and trade unions argued that the effect of these activities has been limited,79

74

Clatanoff (2005) also mentions that the United States have in addition worked with its trade partners to improve their labour laws during the negotiations of more recent trade agreements. 75 U.S. Department of State Office of the Spokesman, “US Commits Funding For Labor and Environmental Protection for Central America–Dominican Republic Free Trade agreement Countries”, Media Note 2008/071 from 30 January 2008; see at: http://sanjose.usembassy.gov/CAFTADR%20labor%20fact%20sheet%20CLEAN.pdf. Interestingly, as Doumbia-Henry and Gravel (2006) note, the coverage of these activities explicitly comprises gender issues. 76 For the CAFTA-DR country’s National Action Plans see at: http://www.ustr.gov/Trade_Agreements/Bilateral/CAFTA/Trade_Capacity_Building/Section_Index.html. 77 U.S. Department of Labor Bureau of International Labor Affairs (2009) “Progress in Implementing CapacityBuilding Provisions under the Labor Chapter of the Dominican Republic–Central America–United States Free Trade agreement. First Biennial Report Submitted to Congress Pursuant to Section 403(a)(3) of the Dominican Republic–Central America–United States Free Trade agreement Implementation Act”, available at: http://www.dol.gov/ilab/programs/otla/JeffersonReport.pdf. 78 The reports are available at: www.oit.or.cr/verificacion. 79 Full text of the submissions available on the ILAB web site at: www.dol.gov/ilab.

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citing the reluctance of employers to respect labour rights, the insufficient involvement of the social partners and relevant civil society organizations in implementation, as well as the lack of evaluation and accountability of the projects or financial assistance.80 In the context of the Canada–Chile Agreement on Labour Cooperation, a number of workshops and conferences were held, involving information sharing and research into the implementation of labour standards. A three-year review of the agreement conducted in 2002 proposed, among other things, to render the activities more practical and to link them more strongly with the ILO.81 The Canada–Costa Rica Labour Side Agreement has involved the provision of technical assistance with a view to strengthening the labour inspection and alternative dispute settlement in labour matters and promoting social dialogue in the legislative process. 82 Few comprehensive evaluations have been conducted of the impact of promotional labour provisions. An interesting test case is MERCOSUR. Being of promotional character (Mansueti, 2002; Díaz Barrado, 2003), the implementation mechanism utilized in MERCOSUR involves tripartite commissions at the national level and the MERCOSUR Social-Labour Commission at the regional level, which sits at least once a year (Ermida Uriarte, 2001). Its key tasks are the development of programmes and action plans for the promotion of the Social-Labour Declaration, as well as monitoring its implementation (von Potobsky, 1999:779; Corries, 2001; Mansueti, 2002). Central to its activities are the annual reports that the MERCOSUR member States are required to submit, first to national tripartite commissions and, subsequently, to the regional Social-Labour Commission for comments (Godio, 2004).83 While progress has, according to some scholars, so far been rather slow (Motta Veiga and Lengyel, 2006), some authors expect the Social-Labour Declaration to influence the interpretation of national laws by the courts and, in this way, to impact indirectly the national laws of the MERCOSUR countries (Barretto Ghione, 2002). The Social-Labour Declaration has also been used as a platform for social dialogue, at both a national and a sub-regional level (Tokman, 2006). This has, among other things, led to the conclusion of an international framework agreement between the Germany-based transnational company Volkswagen and trade unions of the Mercosur Member States (Godio, 2004).

Concluding remarks Labour provisions in trade agreements have considerably evolved in quantitative terms, in their characteristics, and in their normative scope. More than 35 of the 186 trade agreements that were in force and had been notified to the WTO by December 2009 were found to contain labour provisions, representing a significant increase from only four in 1995. Until 80

U.S. Department of Labor Bureau of International Labor Affairs (2009), op. cit. See also the “Ministerial Council Report on the Three-Year Review of the Canada–Chile Agreement on Labour Cooperation”, December 2002, available at: http://www.hrsdc.gc.ca/eng/lp/spila/ialc/2003_2004/02canada_chili_agreement.shtml. 82 See the website of the Canadian government at: http://www.hrsdc.gc.ca/eng/lp/ila/NIILA/Tech_Ass_CCRALC.shtml. 83 The Commission, generally, adopts its decisions by consensus (von Potobsky, 1999; Ermida Uriarte, 2002). 81

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now, trade agreements including labour provisions are still in the minority, but it appears that labour standards in trade agreements are increasingly accepted among both developed and developing countries (see also Bartels, 2008). While the debate on labour provisions in trade arrangements is generally associated with their conditional dimension, the majority of the labour provisions found in trade agreements are actually of an entirely promotional nature. Notably, the research identified a relatively under-researched phenomenon of a rising incidence of trade agreements containing labour provisions between developing or emerging economies; of these cases, all expect one were promotional in nature. In general, labour provisions in trade agreements increasingly provide for a comprehensive institutional framework as well as for cooperation and technical assistance. In terms of their practical implications, the question of the effectiveness of the labour provisions has proven difficult to answer and evidence is so far mainly limited to those with conditional features, in particular the US trade arrangements. While it would seem that labour provisions in trade arrangements have led in some cases to some improvements of labour standards at the national level, the results have been highly case-specific and have been dependant on the interplay between a variety of political, social and economic factors. This is also due to the variety of the compliance problems at stake in the different cases which range from a lack of political will, or due to economic84 or political85 factors (Kryyoi, 2008), to problems regarding capacity and resources (e.g. OECD, 1996). Given that challenges in the promotion of labour standards often have multiple roots, an integrated and multi-faceted approach seems most promising, the design of which would be adapted to the specific context and aims of the trade partners. While evidence is limited up to now, it seems that incentive-based labour provisions, especially those contained in the US-Cambodia Textile Agreement, carry particularly encouraging results in terms of improving labour standards through trade arrangement while avoiding political difficulties through a “shaming” of trade parties.86 In the future, one possible way to further enhance labour provisions could be to consider including incentivebased elements also in bilateral or regional trade agreements (see also Alston, 2004). One possibility would be to link incentive-based labour provisions to the development of cooperation activities and technical assistance provided under some agreements. Under such an incentive-based arrangement, countries that make a particular effort to improve labour standards in their territory could be accorded additional funds for development cooperation or additional capacity building. Drawing on the experience from the US-Cambodia Textile Agreement, incentives could be linked to dynamic and country-specific goals. Compliance with these conditions could be periodically reviewed and, where necessary, complemented with development cooperation. Furthermore, given the crucial role of social partners and domestic civil society for the functioning of labour provisions, the participation of social partners in earlier stages of the

84

The belief that labour standards are too costly may give governments an incentive not to enforce labour standards in their countries. 85 The intensity of these factors ranging from a small political interest of the government in labour standards to indifference and, finally, an interest in not complying with labour standards. 86 It has also been argued that labour clauses based on positive incentives may be easier to use than negative incentives (Polaski/Vyborny, 2006). A number of scholars maintain, for example, that the effect of the US GSP could be enhanced if it included an incentive-based approach (Polaski, 2003; Hogan, 2006; Berik and van der Meulen Rodgers, 2007).

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procedure would support more effective implementation and relieve concerns about the transparency and openness of procedures. First encouraging steps in this regard have been taken, with the participation of social partners, in the Mercosur Social-Labour Commission implementing labour provisions (Compa, 2006) as well as in similar structures established by the recent EC-Cariforum and EC-South Korea Trade Agreements. An important challenge has been to ensure coherence between the application of labour provisions and the ILO’s international labour standards. The majority of labour provisions in trade agreements now refer to ILO instruments, mostly in the form of the ILO 1998 Declaration. Yet, the challenge remains to also align the practical application of these labour provisions with the ILO’s instruments, mechanisms and activities so as to ensure policy coherence on labour standards at the international level. An encouraging example in this regard has been set by the EU which has coordinated its recent action under the GSP labour provisions with the relevant ILO bodies. Such an approach increases the transparency of the decision and can also dispel concerns about potential protectionist motivation behind the sanction measures. In this regard, it will be crucial to interpret the trade agreements that require compliance with ILO 1998 Declaration in light with the rest of the ILO’s relevant legal norms.87 This concerns, in particular, the ILO’s Conventions and Recommendations but also the jurisprudence of the ILO supervisory bodies, such as the ILO Committee of Experts on the Application of Conventions and Recommendations, the ILO Committee of Freedom of Association, and the ILO’s ad-hoc Commissions of Inquiry (see on this also Cabin, 2009). To conclude, labour provisions in trade arrangements offer a number of possibilities to promote labour standards through the mechanisms of international economic governance. Further research is required though to understand how the practical application of labour provisions in trade arrangements, as well as the use of the different conditional or promotional elements, can contribute to the improvement of employment and working conditions in the global economy.

87

It has been suggested in this context that the ILO should have the possibility to give its opinion on this matter (ILO, 2007).

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Recent Discussion Paper Series Titres récents dans la série Documents de travail Títulos recientes en la serie Documentos de trabajo

Using the social capital of nationals abroad as a strategy for development in the IT sector, by Eric A. Charest. No. 172. 2007. ISBN 978-92-9014-820-3. Los derechos sociales en el marco de las reformas laborales en América Latina, by Adrián Goldin. No. 173. 2007. ISBN 978-92-9014-822-7. The Southern European social model: Changes and continuities in recent decades, by Maria Karamessini. No. 174. 2007. ISBN 978-92-9014-832-6. The quest for a fair globalization three years on: Assessing the impact of the World Commission on the Social Dimension of Globalization, by Hamish Jenkins, Eddy Lee, and Gerry Rodgers. No. 175. 2007. ISBN 978-92-9014-828-9. Labour laws in South Asia: The need for an inclusive approach, by Kamala Sankaran. No. 176. 2007. ISBN 978-92-9014-830-2. L’effectivité du droit du travail et l’aspiration au travail décent dans les pays en développement: une grille d’analyse, by Rachid Filali Meknassi. No. 177. 2007. ISBN 978-929014-838-8. Globalization, the impact of trade liberalization, and labour law: The case of South Africa, by Jan Theron, Shane Godfrey and Margareet Visser. No. 178. 2007. ISBN 978-929014-834-0. Trade liberalization, labour law, and development: A contextualization, by Adelle Blackett. No. 179. 2007. ISBN 978-92-9014-846-3. Labour law:A Southern African perspective, by Colin Fenwick, Evance Kalula and Ingrid Landau. No. 180. 2007. ISBN 978-92-9014-842-5. La efectividad de la legislación laboral en América Latina, by Graciela Bensusán. No. 181. 2007. ISBN 978-92-9014-840-1. Gouvernance, droit international et responsabilité sociétale des entreprises Governance, International Law and Corporate Societal Responsibility, edited by Jean-Claude Javillier. No. 182. 2007. ISBN 978-92-9014-836-4. Issues in the analysis of global value chains and their impact on employment and incomes in India, by Dev Nathan and V. Kalpana. No. 183. 2007. ISBN 978-92-9014-844-9.

Explaining non-compliance with labour legislation in Latin America: A cross-country analysis, by Adriana Marshall. No. 184. 2007. ISBN 978-92-9014-848-7. Corporate social responsibility in multinational companies: Management initiatives or negotiated agreements? by Tony Edwards, Paul Marginson, Paul Edwards, Anthony Ferner, and Olga Tregaskis. No. 185. 2007. ISBN 978-92-9014-856-2. The influence of the EU on the evolution of national employment models, by Jill Rubery, Gerhard Bosch, and Steffen Lehndorff. No. 186. 2008. ISBN 978-92-9014-864-7. Harnessing globalization for development: Opportunities and obstacles, by Eddy Lee. No. 187. 2008. ISBN 978-92-9014-866-1. Deepening the Social Dimensions of Regional Integration: An Overview of Recent Trends and Future Challenges in Light of the Recommendations of the Report of the World Commission on the Social Dimension of Globalisation, by UNU-CRIS. No. 188. 2008. ISBN 978-92-9014-870-8. The Swedish model: Revival after the turbulent 1990s?, by Dominique Anxo, Harald Niklasson. No. 189. 2008. ISBN 978-92-9014-872-2. Executive compensation: Trends and policy issues, by Franz Ebert, Raymond Torres and Konstantinos Papadakis. No. 190. 2008. ISBN 978-92-9014-888-3. The effects of financial globalization on global imbalances, employment and inequality, by Ekkehard Ernst and Verónica Escudero. No. 191. 2008. ISBN 978-92-9014-890-6. Labour, Globalization and Inequality: Are Trade Unions Still Redistributive?, by Lucio Baccaro. No. 192. 2008. ISBN 978-92-9014-885-2. Impact of changing work patterns on income inequality, by Uma Rani. No. 193. 2008. ISBN 978-92-9014-886-9. Policies for redistribution: The use of taxes and social transfers, by Naren Prasad. No. 194. 2008. ISBN 978-92-9014-887-6. Dynamics of labour-intensive clusters in China: Relying on low labour costs or cultivating innovation?, Jici Wang and Lixia Mei. No. 195. 2009. 978-92-9014-926-2. Stimulus Packages to Counter Global Economic Crisis: A review, by Sameer Khatiwada. No. 196. 2009. ISBN 978-92-9014-911-8. Effects of the crisis on the financial sector: Trends and policy issues, by Verónica Escudero. No. 197. 2009. ISBN 978-92-9014-912-5. Global economic linkages. A model of employment and income dynamics in open economies, by Ekkehard Ernst and Matthieu Charpe. No. 198. 2009. ISBN 978-929014-914-9.

Non-Standard Employment in Japan: Gender Dimensions, by Shiho Futagami. No. 200. 2010. ISBN ISBN Print: 978-92-9014-950-7. Youth Employment in Crisis, by Byung-jin, Ha Caroline McInerney, Steven Tobin and Raymond Torres. No. 201. 2010. ISBN 978-92-9014-942-2. L’emploi des jeunes en période de crise, by Byung-jin, Ha Caroline McInerney, Steven Tobin and Raymond Torres. No. 201. 2010. ISBN 978-92-9014-944-6. El empleo de los jóvenes ante la crisis, by Byung-jin, Ha Caroline McInerney, Steven Tobin and Raymond Torres. No. 201. 2010. ISBN 978-92-9014-946-0. The Impact of the Crisis on Employment and the Role of Labour Market Institutions, by Werner Eichhorst, Verónica Escudero, Paul Marx, Steven Tobin. No. 202. 2010. ISBN 978-92-9014-956-9. Employment prospects: A global model of recovery and rebalancing, by Rudiger von Arnim. No. 203. 2010. ISBN 978-92-9014-954-5. Labour provisions in trade arrangements: current trends and perspectives, by Franz Christian Ebert and Anne Posthuma. No. 205. 2010. ISBN 978-92-9014-993-4. (Web/pdf). Did the financial sector profit at the expense of the rest of the economy? Evidence from the United States, by Sameer Khatiwada. No. 206. 2010. ISBN 978-92-9014-960-6. Safeguarding jobs in times of crisis – Lessons from the German experience, by Martin Dietz, Michael Stops and Ulrich Walwei. No. 207. 2011. ISBN 978-92-9014-976-7. Assessing policy effectiveness during the crisis: The case of Indonesia, by Djoni Hartono, No. 208. 2011. ISBN 978-92-9014-980-4. Labour market policies in Spain under the current recession, by Miguel Á. Malo, No. 210. 2011. ISBN: 978-92-9014-991-0 (Web/pdf).

A complete list of IILS publications can be obtained from http://www.ilo.org/public/english/bureau/inst/papers/index.htm Une liste complète de nos publications peut être obtenue sur http://www.ilo.org/public/french/bureau/inst/papers/index.htm Se puede obtener una lista completa de las publicaciones en http://www.ilo.org/public/spanish/bureau/inst/papers/index.htm