H EARING ON THE FUTURE EU- J APAN FTA EESC, 15 January 2014

I MPACT A SSESSMENT * “…the effect on real wages is estimated to be relatively small (less than 0.7%) for both skilled and unskilled labour in both economies.” “Increased trade between the EU and Japan would lead to an increased demand for labour, and raise the welfare of both parties.” * COMMISSION STAFF WORKING DOCUMENT ON THE IMPACT ASSESSMENT REPORT ON EU-JAPAN TRADE RELATIONS, July 2012

F ROM M YTHS TO F ACTS – ILO/EU P UBLICATION 1. theoretical and empirical literature on trade has been geared towards analysing its growth and overall welfare effects 2. work is often used as a point of reference by trade negotiators 3. most work ignored major trade-related realities, such as the existence of trade costs and the role of individual firms in trade performance 4. existing work that links trade and labour markets tends to be based on strong simplifying assumptions

WTO T RADE P OLICY R EVIEW – 2013 “To be able to sustain growth in the future, the Japanese economy will need to undergo far reaching structural reforms focused on improving productivity in the services sector; and addressing the duality in the labour market between regular and non-regular workers, which has resulted in depressed incomes and increasing revenues through comprehensive tax reforms.”

L ABOUR TRENDS IN J APAN OECD: part-time employment 20.5% in 2012 The gender pay gap at median earnings is the second highest in the OECD and increases with age

L ABOUR TRENDS IN E UROPE Non-regular forms of employment are on the rise Women and young people are disproportionately represented Since 2008, temporary and part-time work increased in 19 and 22 EU countries Rapid growth of agency work Spain, 30.9% of all employment Main job a part-time job: 19.5% (2011) (from 16.2% in 2001) the Netherlands (49.1% in 2011), the United Kingdom, Germany, Sweden, Denmark and Austria (25% to 27%) Fixed-term employment: 14.0% (2011) tendency to increase Poland and Spain, Portugal (20%-22.2 %)

L ABOUR COMMITMENTS IN SD-C HAPTER Maintain and implement national laws and regulations, including those issued by sub-national structures Fundamental labour rights conventions Adherence with the following governance ILO Conventions : No. 81 Labour Inspection Convention No. 122 Employment Policy Convention No. 129 Labour Inspection (Agriculture) Convention No 144 Tripartite Consultation (International Labour Standards) Convention Acceptable conditions of work: wages, hours of work, OSH etc. Up to date ILO Conventions Non-derogation provisions to prevent parties from weakening or waiving labour standards A system of identifying and preventing the import of products made with forced labour and child labour in its worst forms

L ABOUR D ISPUTE S ETTLEMENT Dispute settlement mechanism Clearly defined stages of procedure including time frames A submission process open to any person of any party to the agreement, Cooperative consultations and arbitration with binding decisions Suspension of benefits, not monetary assessments Sanctions must be sufficiently stringent - a sanction floor Benefits suspension should first be targeted at the tariffs lines corresponding to the sector in which the violation occurred, broadened to include the tariff lines of a related sector or sectors. The sanction should increase by 50% for every year of non- compliance

I NSTITUTIONS FOR C OOPERATION ON L ABOUR After procedures that guarantee labour standards are in, there could be: A Labour Affairs Council consisting of cabinet-level officials to oversee the implementation A forum for civil society (for instance, DAGs) that produces research and regular, independent reports on the implementation In general the labour institutions should: Be appropriately resourced with regard to international benchmarks Include genuinely tripartite governance and consultation structures Coordinate, where appropriate, with the ILO and other relevant organizations

J APAN -P HILIPPINES EPA AND J APAN - S WITZERLAND FTA Article 103 Investment and Labor: The Parties recognize that it is inappropriate to encourage investment by weakening or reducing the protections afforded in domestic labor laws. Accordingly, each Party shall strive to ensure that it does not waive or otherwise derogate from, or offer to waive or otherwise derogate from, such laws in a manner that weakens or reduces adherence to the internationally recognized labor rights referred to in paragraph 2 below as an encouragement for the establishment, acquisition, expansion or retention of an investment in its Area. If a Party considers that the other Party has offered such an encouragement, it may request consultations with the other Party and the Parties shall consult with a view to avoiding any such encouragement. (a) the right of association; (b) the right to organize and bargain collectively; (c) a prohibition on the use of any form of forced or compulsory labor; (d) labor protections for children and young people, including a minimum age for the employment of children and the prohibition and elimination of the worst forms of child labor; and (e) acceptable conditions of work with respect to minimum wages, hours of work, and occupational safety and health.