Friday, November 13, 2015

Why Obama says TPP is historic for workers — and why US labor unions hate it

The Obama administration is crowing about the labor protections in the Trans-Pacific Partnership — the full text of which were finally released last week.
"TPP has the strongest protections for workers of any trade agreement in history," the administration claims in its introduction to its labor chapterOfficials say they've made huge strides for workers abroad — particularly in getting Vietnam's repressive government to agree to recognize workers' rights and allow independent unions, and Malaysia's government to agree to reforms aimed at preventing forced labor.

"This is a real historic moment for countries like Vietnam and the workers in those countries, because as this gets implemented, these countries will have to make very significant changes to their systems," says US Trade representative Michael Froman.
But skeptics aren't convinced. First, they say, the labor protections are similar to those in previous trade agreements, rather than truly game changing. And second, they argue that though the commitments sound nice on paper, they may not make much of a difference in the real world. "Even if you beef up the language — if the political will to enforce isn't there, you don't really have enforcement," says AFL-CIO trade specialist Celeste Drake.
So here's a guide to what's actually in the deal — and the dispute about whether its specifics are even meaningful.

TPP signers will agree to broad pro-labor principles and more specific reforms

According to the agreement, every country signing the TPP will agree to protect these rights:
  • Freedom of association and collective bargaining
  • "The elimination of all forms of forced or compulsory labor"
  • "The effective abolition of child labor"
  • "The elimination of discrimination in respect of employment and occupation"
Additionally, the countries will have to adopt laws or regulations about minimum wages, acceptable work hours, and occupational safety and health — but the agreement doesn't offer more specifics on what those should entail. (For instance, one could imagine a "minimum wage" being set that's incredibly low.)
Countries are also supposed to ensure access to "impartial and independent tribunals" that will enforce labor laws. They're not allowed to avoid compliance with the agreement's labor terms simply by claiming a lack of resources — but they do retain "reasonable enforcement discretion" over particular cases. All these also have to apply to workers in export-processing zones, which have often been loopholed out of previous labor standards.
These changes are most significant for two countries whose inclusion in the TPP has been particularly controversial — Vietnam and Malaysia.
  • Vietnam is still run by a repressive, one-party communist regime, and the "unions" that currently exist there are heavily managed by or affiliated with the government. So its agreement to allow independent unions — and to enact many more specific reforms laid out in a side deal with the US — certainly looks very significant. There are questions, though, about whether Vietnam will follow through in practice, as the New York Times's Keith Bradsher explores.
  • Malaysia's regime has long been criticized for its "indifference to human trafficking abuses" and forced labor, as the Huffington Post's Zach Carter has written. But in the agreement itself Malaysia has committed to eliminating "all forms of forced labor," and in a side agreement with the US, the country will agree to change regulations to "reinforce" that it's illegal for employers to keep their workers' passports and to better inform foreign workers of their rights, among other reforms.
With only one exception, the overall agreement calls for Vietnam and Malaysia to implement all of these changes (including those in their respective side deals with the US) before the Trans-Pacific Partnership goes into effect. The US government will affirm that they've fulfilled their obligations before allowing them access to duty benefits.
The one exception is a commitment from Vietnam to allow larger independent labor confederations across sectors and regions (like the AFL-CIO in the US). The US is giving Vietnam a five-year extension to implement that, and if it fails to do so, the US can suspend or cancel its future tariff reductions affecting Vietnam, including on footwear and apparel.
"Vietnam's agreement to change their laws to allow independent unions to elect their own officials, collect their own finances, engage in strikes, decide who to affiliate with, get outside assistance — this represents a remarkable change to the status quo, and without TPP we wouldn't have it," says Froman.

How these labor protections would be enforced

Now, those principles might sound nice. But how does the US ensure that the other signers of the TPP — particularly Vietnam and Malaysia — live up to them?
Theoretically, that's where the enforcement provisions come in. The labor chapter of the TPP sets up three ways that these concerns can be adjudicated:
  • The first, a cooperative labor dialogue, is the least confrontational. With this, one country can "request dialogue" with another TPP-signing country "on any matter under this Chapter at any time by delivering a written request." Then within 30 days, a dialogue between the two countries begins, where the issues will be discussed. There's no real teeth here, but it could be a way for the US to try to resolve an issue in another country without too much drama.
  • The second, labor consultations, is a more formal process in which one country basically starts a case against another for an alleged infraction of the agreement. Still, though, it's just the countries involved consulting with one another. But if there's no agreement reached within 60 days, the complaining country can choose to escalate the case to...
  • ...the dispute settlement process. In general, dispute settlement is what gives TPP and other trade agreements teeth for its economic obligations. That's because it takes the matter at issue out of the countries' hands and places it before a panel composed of "three objective international trade and subject matter experts,"according to the administration. This panel will decide which country is in the right, and if a country is found to be violating the agreement, it can be penalized via trade sanctions. So countries' labor commitments in this agreement are subject to dispute settlement just like their economic agreements.

But skeptics aren't convinced the US government will stand up against labor abuses in other countries

Of course, it remains to be seen how serious these countries will be in implementing these reforms — and, if they fall short, how seriously the US will take them to task.
"I do think that members of the administration attempted to negotiate with Vietnam in good faith," John Sifton of Human Rights Watch said on a conference call last week. "You read the bilateral agreement between the US and Vietnam, and it sounds great. Lots of obligations on Vietnam to change its labor laws, change its practices to allow unions and confederations. If those things happen, that would be great."
The problem, in his view, is that the agreement puts the impetus on the US government — not, say, workers and union members — to invoke the process described above. That is, there's no process like ISDS — which lets corporations effectively sue foreign governments in a special court — that labor or workers can use. (Ezra Klein explained the ISDS process here.)
Sifton and other critics fear that the US government will be too eager to look the other way, since retaliating against Vietnam could harm American corporate interests. "Our concern is that Vietnam will turn around and not allow [independent] unions to be created," he says. "Will the US have the capacity, the desire, and the will to enforce its terms, and to seek consequences against Vietnam if they fail to meet the obligations of the agreement?"
Celeste Drake of the AFL-CIO agrees. She argues that there were infractions against workers' rights in Guatemala that violated CAFTA for years, but the US did little. Only in 2014 did the US bring Guatemala to dispute settlement — the part of the process with teeth. And this was the first labor case against a trading partner that the US had ever brought to dispute settlement. So, she asks, why should we expect the US to be more aggressive in Vietnam and Malaysia? "It's easy for a one-party government to change a law on paper," she says. "The much harder thing is to say, 'You're going to implement that change.'" (For their part, administration officials argue that, in contrast to CAFTA, TPP includes many stronger and more specific labor standards that would make it easier to hold other countries accountable.)
But critics believe that the US has already watered down its assessment of conditions in certain countries for political reasons. Earlier this year, the State Department improved its assessment of Malaysia's efforts to combat human trafficking, moving it up from "Tier 3" (countries not making a serious effort) to "Tier 2" (countries trying to crack down). But as the New York Times's Matthew Rosenberg and Joe Cochrane reported, this was shortly after Congress gave Obama fast-track authority for the TPP under the condition that no countries listed in Tier 3 in that State report could be part of the agreement. Activist groups cried foul. (The State Department said the change had nothing to do with a desire to get TPP approved.)

But the administration argues that it's won big, historic changes — and it can't control future enforcement anyway

Obama administration officials, though, argue that the commitments they won from Vietnam and Malaysia are strong, specific, and historic. They say they've used the leverage the trade deal provides to win commitments for big changes from these countries that could greatly improve people's lives. "Without TPP, we wouldn't be able to make any steps in these areas," Froman says.
As for the skepticism about whether these commitments will be enforced, officials see this as goalpost-moving. Previous trade agreements tended to be criticized for not having strong enough standards, or for not having any way to enforce those standards. Now, officials argue, the focus on whether there's the political will for enforcement shows how strong the TPP's text actually is.
They also say they're trying to institutionalize enforcement in various ways to make it more likely future presidents will actually do it — for instance, by setting up a regular process with Congress to consult on enforcement priorities, and pushing to authorize an Interagency Trade Enforcement Center in the customs bill.
In any case, the TPP — if Congress approves it — is unlikely to enter into effect until 2017 at the earliest. So it won't be Obama's administration that decides how stringently to enforce these commitments. The ball will be in the next president's court.

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