Regional trade agreements and decent work Marva Corley-Coulibaly Elizabeth Echeverria Manrique ILO Research Department

Structure of Presentation The trade-labour linkage and the ILO Definition of labour provisions Comparative analysis of labour provisions Do labour provisions set framework conditions for decent work? Questions for further exploration

The beginning of the trade and labour linkage: the ILO Reasons: Moral: charitable urge to constrain appalling working conditions (Servais, 2009) Economic: Level the playing field (Valticos, 1977) 1919 ILO Constitution Economic progress goes hand in hand with social justice, prosperity and peace. “..the failure of any nation to adopt humane conditions of labour is an obstacle in the way of other nations which desire to improve the conditions in their own countries”. If you desire peace, cultivate justice (“si vis pacem, cole justitiam”)

Trade and labour standards linkage: Consensus-Instruments World Summit for Social Development (1995) Singapore Ministerial Declaration (WTO-1996) Declaration on FPRW and its follow-up (ILO, 1998) World Summit of the United Nations (2005) Declaration on Social Justice for a Fair Globalization (ILO, 2008) 2030 Agenda for Sustainable Development and SDGs (2015) Decent work (1999) Rejection of the use of labour standards for protectionist purposes The comparative advantage of any countries, particularly that of low-wage developing countries, must in no way be put into question Violation of fundamental principles and rights at work shall not be invoked or used a legitimate comparative advantage ILO is the competent body to set and deal with international labour standards

ILO’s means of action Technical assistance Upon request the ILO may: Advice, Implement Indirectly: serve as source of information Standards- related action Technical assistance Development cooperation Capacity building Knowledge building and sharing

Source: ESCAP

Definition of Labour Provision (ILO, 2016) (i) any standard which addresses labour relations (for example, with reference to international labour standards) or minimum working conditions and terms of employment (for example, occupational safety and health (OSH), minimum wages and hours of work); (ii) any mechanism to ensure compliance with the standards set, under national law or in the trade agreement; and (iii) any framework for cooperative activities, dialogue and/or monitoring of labour issues (for example, development cooperation, established bodies for facilitating consultation between the parties or regular dialogue).

Number of trade agreements notified to the WTO that entered into force, by year

Reference to labour standards in TAs since 2009 EU EFTA (2010) US Canada Chile Korea NZ ILO 1998 Declaration FPRW X Peru, Turkey, Colombia Philipines, Hong- Kong, CPTPP Effective implementation of national labour laws Turkey, Brunei-NZ- Singapore, Peru, Panama, Colombia, and CPTPP Turkey, Colombia. Australia Korea, CPTPP Non-derogation of labour laws to encourage investment/trade or use of labour laws for protectionist purposes x Thailand, Brunei- NZ- Singapore, Hong-Kong China, CPTPP Colombia, Australia Malaysia, China, Korea, CPTPP Effective implementation of ILO Conventions Central America, Colombia-Peru and Korea, Canada (CETA), Mexico ( as per published text not in force) - EU (CETA) Turkey Decent Work Agenda Honduras, Peru, Colombia, Jordan, Panama* and CETA Colombia CPTPP

Mexico’s overview on labour All 8 fundamental conventions have been ratified (only C. 98 has not been deposited at the ILO yet) Governance conventions only 1 ratified: C144 (tripartite consultation, ILS) Frequent issues at the ILO supervisory system Application of Convention 87: Issues with freedom of association and the right to organise (CEACR, CAS, CFA) But also non-discrimination: there is no recognition in the law of the principle of equal remuneration for men and women for work of equal value New labour chapter in re-negotiated NAFTA (USMCA) includes steps and deadlines for implementation of reforms to effectively apply C. 98. This is not part of CPTPP.

Assessment of labour provisions How and whether LPs set framework conditions for decent work? Cross-country macro-assessment: Based on 260 TAs reported to WTO (including 71 with LPs) Supported by case study analysis & interviews: 50 stakeholders in more than 10 countries across regions. Joint events: 5 academic institutions in Asia, Europe, North America and Latin America.

Key findings on LPs in Trade Arrangements No Trade distortion: LPs in TAs do not divert or decrease trade flows. TAs with and without, have same impact on trade. Gender impacts: LPs ease labour market access, particularly for working age women. There is country-evidence on the narrowing of the gender wage gap. Ratification of ILO Conventions Institutional role and stakeholder involvement: The key mechanism through which LPs have an impact is through strengthening of labour market institutions, supported by stakeholder involvement.

Both trade agreements with and without labour provisions boost trade to a similar extent Estimated impact of trade agreements on trade (selected time periods, in %) Source: ILO Research Department.

Labour provisions and labour markets Ease labour market entry: Increase LFPR by 1.6pp Stronger for women: narrowing of the gender participation gap by 1.1pp Possible links: awareness raising; non discrimination Source: ILO Research Department.

Trade agreements with LPs can reduce gender discrimination – when an accompanying policy mix is in place Source: ILO Research Department.

Labour provisions: importance of institutions and stakeholders Country/ Case Agreement Implementation Actions Effects CAFTA-DR FTA with US (2004) Pre-ratification Capacity buidling to improve implementatin gaps Stakeholder involvement Monitoring &. progress reports Some ratifications (El Salvador) & legislative changes (EPZs) ILO Verification project: Increased MOL budget by 20%; inspectorates by 55%; Increased number of judges Cambodia Bilateral Textile Agreement with US (1999-2004) Monitoring & progress reports Positive incentives Strengthened freedom of association Decrease in gender wage gaps Republic of Korea FTA with EU Monitoring ILO conventions: 1 ratification and follow-up of others Initiatives for cooperation in CSR and non-discrimination

Stakeholder involvement: what has been effective? Synergy: labour advocates combine different mechanisms Cross-border coalitions of civil society organizations are important

Supportive domestics policies are needed Reinforcing LMI Industrial relations collective bargaining Skills & Training Social protection Engaging wtih the private sector CSR ILO MNE Declaration SME upgrading Improving productivity Transition to formalization Enabling business environment

Questions for further exploration How to improve implementation of labour provisions? How to measure & enhance sustained dialogue and commitment? How improve transparency and accountability to stakeholders? Which mechanisms have been most useful for dialogue and progess? How can the ILO best assist it’s Members? How can technical assistance and development cooperation be better tailored to partner countries?

Thank you www.ilo.org/research