The panel at the hui in October 2018 on What an Alternative and Progressive Trade Strategy for New Zealand Should Look Like on sustainable work, began with this contribution Laila Harré.
Laila has 30 years of involvement in industrial relations policy and practice in a variety of roles. She’s recently completed a thesis on relationships between international investment agreements, labour standards and progressive law reform.
Michael Whaites (PSI, chair): The obvious question to ask you is how have trade and investment agreements affected workers’ rights and what are some of the fundamentals that have been problematic.
Laila: There are obviously much broader impacts of trade and investment agreements on workers and employment than I am going to address today. My specific focus is on the impact of the labour chapters and rules or references to labour standards that are increasingly present in free trade and investment agreements. In NZ they have been largely to date in the form of memorandums of understanding between NZ and various bilateral trading and investment partners – China, Malaysia, Singapore, Hong Kong, and so on. They are not enforceable, but they are understandings about how each party will conduct itself in relation to labour laws and standards domestically. The most recent agreement, CPTPP, includes a full chapter on labour, which is supposedly enforceable.
I want to come to the issue of how these rules do or don’t impact. Basically, there are two kinds of principal issues here. First, do these rules enable countries to improve or protect their existing labour standards? Second, are there elements in these agreements which actually prevent countries from improving or protecting their existing labour standards? In my assessment, having looked at hundreds of agreements in a lot of detail, and the last 50 negotiated globally, and all the cases there have been on the enforcement of labour rules in trade and investment agreements or issues that have arisen from that, if we didn’t have labour rules and standards in these agreements we wouldn’t be in a worse position than we are. Because the detriment of those agreements to jobs and workers is well beyond any arguable benefit from the labour rules and standards.
The second conclusion I have reached is that the investment rules, in particular the rules that enable investors to sue governments for regulatory interventions, although to date they have not had a negative impact on labour regulation, that is only because no country has entered into a process of transformational labour law reform over the last 30-40 years, which is also the period of explosive growth of investor-state dispute settlement (ISDS). If you look at it theoretically and what could happen if, for instance, the living wage campaign or social procurement advocates really succeeded through pressuring and mobilisation and getting central or local government rules that are really transformative of labour rights, then I have no doubt we would be vulnerable to litigation. The way these agreements have been drafted, including the CPTPP which our minister of trade describes as a gold standard agreement, do not have protections in them for the policy space we would need if we had a reassertion of trade unionism and a really successful momentum for progressive labour law reform of the kind that many in this room would aspire to.
Michael: Rhetorical question – if the reality is that we would be no worse off if the labour chapters were removed, is there any point in us being at the table?
Question: We heard earlier that global structures are in crisis because the multinationals break and/or ignore our rules for their own purposes. So should workers and communities in defence of our livelihoods argue for a return to the old world order and a seat at that table, or should we also break existing bad laws in order to establish community focused new world order?
Laila – I’m not sure I can see an equivalence between the options available to those of us with few resources available to us, other than our time or collective energy, and the corporates who bring in large investments and have huge political influence a la Uber and so on to get what they want. What I would say is that I really strongly believe that the method for achieving people-centred regulation is still very rooted in the domestic body politic, and in work in communities. While the area of labour regulation is heavily influenced by the forces of globalisation, investment and so on, the place for developing our industrial relations rules, our culture, is still very much in the domestic environment. If anyone has to break the rules of this kind of international economic regime, it’s the state that needs to break the rules of there are rules against regulating to enhance the wellbeing of communities for which you have responsibility as the state, then the state must break those rules. Obviously the best thing we can do is to stop those rules being put in place, which is why we campaign against these kind of agreements. But there must be a willingness of the state to break those rules in the interests of the community. That’s the level where that responsibility lies.
Question: How do we make sure the work in China and other countries also benefit from our progressive improvements? A few months ago the Indian PM and Chinese Premier said we are all for globalisation. They see the short-term benefits. They don’t see the long-term price that they are going to pay. Taiwan, where I come from, is now a ruined environment. The same as China. Is that part of the price we have to accept because we want cheap labour and they keep moving production around from China to Vietnam or another country? How do we actually keep the balance. Chinese people say “do you realise how polluted it is to produce all the solar panels for the developed countries”. How do we get rid of this kind of dilemma?
Laila: That’s a really good question, and at the nub of the dilemma. I want to relate it back to the trade agreements and how it works within that framework. Traditionally, we had tariffs and other forms of protection for local manufacturing or local capitalism, and local workers. We’ve moved away from that to this believe that a free trade and investment environment will lift standards for China or any other country by some miraculous process around the world. Obviously trade unions and workers in countries that have been negatively impacted by the opening of their markets to cheaper imports have said we want some constraints on that.
Which is why this idea of labour chapters and labour rules came into play. But the reality is that those rules don’t help either party. Despite the fact we’ve had these rules and agreements for 20+ years, it is mainly in the US agreements and often with South American countries or the Middle East. There are very poor connections between those rules and improvements in wages or working conditions in those countries. There has been one case that’s gone the distance on the enforcement of those rules, which is a US case with Guatemala. The US lost that case. Even though the tribunal said yes Guatemala has broken fundamental agreements, the US couldn’t prove that has advantaged Guatemala in terms of its trade with the US and therefore they lost. All our agreements have the same problems. The reality is that these rules have not led to improvements in working conditions in those countries.
What I think is the most important thing we do, is to preserve the democratic space, whether it’s here or China or any other country for the communities in that country to organise and assert themselves in relation to the regulatory system. We might not like things that happen in other countries, but the approach in these agreements hasn’t actually made them better. What it does do is limit the possibility in those countries for them to organise and win improvements themselves at home. We have to be a little less paternalistic about it. Let’s acknowledge that our wealth has come through hundreds of years of exploiting in our own home countries and have exploited people in poorer countries who have provided us with the resources on which richer countries have got richer. We need to delete the paternalism and the most important thing we can do is protect the space for people to organise domestically. We don’t do that by saying these are the rules you have to follow, as we don’t actually enforce those rules because we want cheap products. And we don’t have the capacity in our own civil society organisations and unions to stop imports etc from those countries anyway.