trade union policies and strategies on free trade agreements

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Trade Union Policies Trade Union Policies and Strategies on and Strategies on Free Trade Free Trade Agreements Agreements - Reject? or Govern? - Reject? or Govern? - -

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Trade Union Policies and Strategies on Free Trade Agreements. - Reject? or Govern? -. Issues to be Discussed. Why did WTO Cancun meeting failed? Trends towards Regional/Bi-lateral Free Trade Agreements APEC – Lessons for Trade Unions? Issues for Trade Union Policies - PowerPoint PPT Presentation

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Page 1: Trade Union Policies and Strategies on Free Trade Agreements

Trade Union Policies Trade Union Policies and Strategies onand Strategies on

Free Trade Free Trade AgreementsAgreements

- Reject? or Govern? -- Reject? or Govern? -

Page 2: Trade Union Policies and Strategies on Free Trade Agreements

Issues to be DiscussedIssues to be Discussed Why did WTO Cancun meeting Why did WTO Cancun meeting

failed?failed? Trends towards Regional/Bi-lateral Trends towards Regional/Bi-lateral

Free Trade AgreementsFree Trade Agreements APEC – Lessons for Trade Unions?APEC – Lessons for Trade Unions? Issues for Trade Union PoliciesIssues for Trade Union Policies

Multilateralism or Bilateralism?Multilateralism or Bilateralism? Free trade or Managed trade?Free trade or Managed trade? How to achieve socially-oriented, fair How to achieve socially-oriented, fair

free trade?free trade? What is the best institutional settings?What is the best institutional settings?

Page 3: Trade Union Policies and Strategies on Free Trade Agreements

Why did WTO CancunWhy did WTO Cancunmeeting fail?meeting fail?

Page 4: Trade Union Policies and Strategies on Free Trade Agreements

Agriculture

Domestic subsidies

Export subsidies

Market accessSpecial and differential treatment for LDCs and developing countries

Singapore Issues (investment, competition, transparency in government procurement and trade facilitation)

Openness and transparency of the WTO negotiations

Main Issues at CancunMain Issues at Cancun

Page 5: Trade Union Policies and Strategies on Free Trade Agreements

Trends towards Regional Trends towards Regional and Bilateral Free Trade and Bilateral Free Trade

AgreementsAgreements

Page 6: Trade Union Policies and Strategies on Free Trade Agreements

What is Goal of Free Trade?What is Goal of Free Trade?

Increase global trade through Increase global trade through liberalisation (tariff reduction)liberalisation (tariff reduction)

Opportunity to increase employment Opportunity to increase employment and raise welfareand raise welfare

Full and meaningful participation of Full and meaningful participation of countries in global tradecountries in global trade

Is it true?

Page 7: Trade Union Policies and Strategies on Free Trade Agreements

Stages of Economic Stages of Economic IntegrationIntegration

Free Trade Area (FTA)Free Trade Area (FTA)- starting point- starting point- rules of origin- rules of origin

Customs UnionCustoms Union- common external tariffs- common external tariffs

Common MarketCommon Market- movement of capital and labor- movement of capital and labor

Economic UnionEconomic Union- coordination of fiscal and monetary policy- coordination of fiscal and monetary policy

Complete Economic UnionComplete Economic Union- super-natural institution- super-natural institution

Page 8: Trade Union Policies and Strategies on Free Trade Agreements

Types of Economic Types of Economic Cooperation AgreementsCooperation Agreements

Multilateral (WTO, OECD)Multilateral (WTO, OECD) Regional (APEC, AFTA, NAFTA, Regional (APEC, AFTA, NAFTA,

MERCOSUR)MERCOSUR) Bilateral (Singapore-Japan New Bilateral (Singapore-Japan New

Age Partnership Agreement)Age Partnership Agreement)

Page 9: Trade Union Policies and Strategies on Free Trade Agreements

Examples of Regional Examples of Regional Economic Agreement (1)Economic Agreement (1)

Asia Pacific Economic Cooperation (APEC)Asia Pacific Economic Cooperation (APEC)

MembershipMembership- Australia, Brunei, Canada, Indonesia, Japan, Korea, Australia, Brunei, Canada, Indonesia, Japan, Korea,

Malaysia, New Zealand, the Philippines, Singapore, Malaysia, New Zealand, the Philippines, Singapore, Thailand, the U.S. (1989); China, Hong Kong, Taiwan Thailand, the U.S. (1989); China, Hong Kong, Taiwan (1991); Mexico, Papua New Guinea, Chile (1994); (1991); Mexico, Papua New Guinea, Chile (1994); Peru, Russia, Vietnam (1998)Peru, Russia, Vietnam (1998)

Bogor Declaration (1994)Bogor Declaration (1994)- Free trade and investment area by 2010 for Free trade and investment area by 2010 for

developed members and by 2020 for developing developed members and by 2020 for developing membersmembers

Concerted UnilateralismConcerted Unilateralism- Voluntary individual and national action plans rather Voluntary individual and national action plans rather

than a rigid and uniform planthan a rigid and uniform plan Open RegionalismOpen Regionalism

- Concessions to be extended to non-members- Concessions to be extended to non-members

Page 10: Trade Union Policies and Strategies on Free Trade Agreements

Examples of Regional Examples of Regional Economic Agreement (2)Economic Agreement (2)

ASEAN Free Trade Area (AFTA)ASEAN Free Trade Area (AFTA)

MembershipMembership- Now increased to ASEAN 10 (Brunei, Indonesia, - Now increased to ASEAN 10 (Brunei, Indonesia, Malaysia, the Philippines, Singapore, Thailand, Vietnam, Malaysia, the Philippines, Singapore, Thailand, Vietnam, Lao PDR, Myanmar, Cambodia)Lao PDR, Myanmar, Cambodia)

Aim to reduce tariff to 0-5% by 2002/2003.Aim to reduce tariff to 0-5% by 2002/2003. As of January 2002, original ASEAN-6 countries have As of January 2002, original ASEAN-6 countries have

included 98.4% of products into AFTA. Out of this, included 98.4% of products into AFTA. Out of this, 96.2% are between 0-5%.96.2% are between 0-5%.

New members have included 62% of products, of New members have included 62% of products, of which 56% are at 0-5%which 56% are at 0-5%

The secret behind the success lies in realistic The secret behind the success lies in realistic approach.approach.

- Inclusion list, temporary exclusion list, sensitive list, - Inclusion list, temporary exclusion list, sensitive list, and general exception listand general exception list

Page 11: Trade Union Policies and Strategies on Free Trade Agreements

Example of Bilateral Example of Bilateral Economic AgreementEconomic Agreement

Japan-Singapore New Age PartnershipJapan-Singapore New Age Partnership

Japan was not a member of any bilateral FTAs until Japan was not a member of any bilateral FTAs until recentlyrecently- Strong believer of multilateralism- Strong believer of multilateralism- Very sensitive agricultural sector- Very sensitive agricultural sector

Signed in January 2002Signed in January 2002 Wide range of coverageWide range of coverage

- trade, investment, financial services, IT, etctrade, investment, financial services, IT, etc- EXCEPT agricultureEXCEPT agriculture

Beginning of proliferation of bilateral FTAs in the Beginning of proliferation of bilateral FTAs in the works, eg between Singapore and US, HK and Mexico; works, eg between Singapore and US, HK and Mexico; Japan-ROK, etcJapan-ROK, etc

Page 12: Trade Union Policies and Strategies on Free Trade Agreements

Regional and Bi-lateral Regional and Bi-lateral Economic Agreements – Why?Economic Agreements – Why?

Disillusionment with work in the Disillusionment with work in the multilateral fora multilateral fora

Unsatisfactory result through Unsatisfactory result through multilateral cooperationmultilateral cooperation

Bigger market to attract FDIBigger market to attract FDI Optimization of resourcesOptimization of resources Stronger voiceStronger voice

Page 13: Trade Union Policies and Strategies on Free Trade Agreements

Benefits of Benefits of Regional/Bilateral Economic Regional/Bilateral Economic

AgreementsAgreements Geographical proximity (same Geographical proximity (same

culture/language); less cost of negotiationsculture/language); less cost of negotiations Lesser member countries, easier to negotiateLesser member countries, easier to negotiate More practical & realistic targetsMore practical & realistic targets Allow developing countries & LDCs (esp. non Allow developing countries & LDCs (esp. non

WTO members) opportunity to start WTO members) opportunity to start liberalizing e.g. Vietnam, Cambodia. liberalizing e.g. Vietnam, Cambodia. Preparation to compete effectively globallyPreparation to compete effectively globally

Possible to achieve regional cooperation in Possible to achieve regional cooperation in other areas beyond tradeother areas beyond trade- NAFTA (e.g. labour)- NAFTA (e.g. labour)- ASEAN (e.g. political & security cooperation; services (GATS - ASEAN (e.g. political & security cooperation; services (GATS

plus)plus)- MERCOSUR (political cooperation; customs union)- MERCOSUR (political cooperation; customs union)

Page 14: Trade Union Policies and Strategies on Free Trade Agreements

Disadvantage of Regional/ Disadvantage of Regional/ Bilateral Economic Bilateral Economic

AgreementsAgreements

PreferentialPreferential Trade diversionTrade diversion Some too ambitious targets, difficult to Some too ambitious targets, difficult to

implementimplement Trade diversion instead of trade Trade diversion instead of trade

creation (protectionist)creation (protectionist) Wastage of resources (duplication/ Wastage of resources (duplication/

overlapping)overlapping)

Page 15: Trade Union Policies and Strategies on Free Trade Agreements

Article XXIV of GATT Article XXIV of GATT 19471947

Sanctions FTAs only if:Sanctions FTAs only if:-- complete liberalisation (100% complete liberalisation (100%

substantially all the trade)substantially all the trade)

-- no increase in outside barrierno increase in outside barrier Ambiguity on:Ambiguity on:

-- how soonhow soon

-- “substantially all the trade”“substantially all the trade”

-- shall not shall not on the whole on the whole be more be more restrictiverestrictive

Page 16: Trade Union Policies and Strategies on Free Trade Agreements

Para 29 of Doha Ministerial Para 29 of Doha Ministerial Declaration 2001Declaration 2001

Agree to negotiate aimed at Agree to negotiate aimed at clarifying and improving clarifying and improving disciplines and procedures under disciplines and procedures under existing WTO provisions.existing WTO provisions.

Negotiations to take into account Negotiations to take into account developmental aspects of RTAs.developmental aspects of RTAs.

Page 17: Trade Union Policies and Strategies on Free Trade Agreements

Are these economic Are these economic agreementsagreements

in line with WTO principlesin line with WTO principles

Note that WTO has never endorsed Note that WTO has never endorsed formally any regional/bilateral economic formally any regional/bilateral economic agreements. agreements.

Only acknowledged their existence under Only acknowledged their existence under Article XXIV of GATT 1947 & 1994. Article XXIV of GATT 1947 & 1994.

Is Article XXIV still adequate and Is Article XXIV still adequate and applicable to FTAs in current context? applicable to FTAs in current context? current context?current context?

Is WTO’s position on FTAs now obsolete??Is WTO’s position on FTAs now obsolete??

Page 18: Trade Union Policies and Strategies on Free Trade Agreements

Possible Options to Possible Options to ConsiderConsider

Revisit Article XXIV againRevisit Article XXIV again Strictly enforce Article XXIV for Strictly enforce Article XXIV for

transparency and discipline purposes. In transparency and discipline purposes. In future, all possible FTAs (bilateral or future, all possible FTAs (bilateral or regional) to be notified to WTO. Note that regional) to be notified to WTO. Note that most new FTAs involve developed most new FTAs involve developed countries e.g. FTAAcountries e.g. FTAA

Allow FTAs to continue and proliferate as Allow FTAs to continue and proliferate as it is complementary to multilateralism. it is complementary to multilateralism. Beneficial to developed and developing Beneficial to developed and developing countries.countries.

Allocate more capacity building to Allocate more capacity building to developing countries (esp. LDCs)developing countries (esp. LDCs)

Page 19: Trade Union Policies and Strategies on Free Trade Agreements

The drive towards the conclusion of RTAs continues unabated.

33 RTAs have been notified to the WTO since November 2001. If the current trend continues we estimate that 300 RTAs will be in force in 2007.

RTAs can clearly help countries integrate into the MTS, but are a fundamental departure from the guiding principle of non-discrimination of the WTO.

Are RTAs a building block or stumbling block?

Need to look at the changing landscape of RTAs

Overview of the TrendsOverview of the Trends

Page 20: Trade Union Policies and Strategies on Free Trade Agreements

Countries traditionally favoring MFN liberalization are increasingly being drawn into RTAs (e.g. Japan).

Those which have been engaged in RTAs for some time are looking further afield for cross-regional partners.

Mega-blocks such as the FTAA or Euro-Mediterranean FTA are under negotiation.

Main Trends IdentifiedMain Trends Identified

Page 21: Trade Union Policies and Strategies on Free Trade Agreements

RTAs notified to the GATT/WTO (1948-RTAs notified to the GATT/WTO (1948-2003) in force and non-notified RTAs2003) in force and non-notified RTAs

0

50

100

150

200

250

300

Notif ied

Notif ied &Non-notif ied

Page 22: Trade Union Policies and Strategies on Free Trade Agreements

152

14

49

FTA

Customs Union

Partial Scope

RTAs in force, as of October 2003, RTAs in force, as of October 2003, by type of agreementby type of agreement

Page 23: Trade Union Policies and Strategies on Free Trade Agreements

0%

20%

40%

60%

80%

100%

In Force Sig/Neg Proposed

Plurilateral

Bilateral

RTAs’ ConfigurationRTAs’ Configuration

Page 24: Trade Union Policies and Strategies on Free Trade Agreements

0%

20%

40%

60%

80%

100%

In Force Sig/Neg Proposed

RTAs

C/R

Cross Regional RTAs are a growing Cross Regional RTAs are a growing phenomenonphenomenon

Page 25: Trade Union Policies and Strategies on Free Trade Agreements

•Canada

•Chile•Peru

•Russia •Korea

•Hong Kong

•China

•Japan

•AustraliaCERCER

ASEAN (AFTA)ASEAN (AFTA)Cambodia Vietnam Myanmar LaosMalaysia PhilippinesIndonesia Brunei

•Thailand

NAFTANAFTA

Singapore

•Mexico

•USA

•New Zealand•Papua New Guinea

RTAs in Effect in the APEC region, 2003RTAs in Effect in the APEC region, 2003•Israel

SAARCSAARCIndia

PakistanBangladeshSri Lanka

NepalBhutan

Maldives

Page 26: Trade Union Policies and Strategies on Free Trade Agreements

The greatest concentration of RTAs is in Europe, where over 100 RTAs are in force.

The main focus of RTA activity has shifted away from Europe in the last two years towards Asia Pacific.

APEC members, in particular, have been among the most active participants in RTAs.

Regional and Cross-Regional and Cross-Regional DevelopmentsRegional Developments

Page 27: Trade Union Policies and Strategies on Free Trade Agreements

Motivations: why do countries Motivations: why do countries engage in RTAs?engage in RTAs?

Economic RationaleEconomic Rationale• search for larger markets• deeper integration• defensive necessity• lock out competition• lock in investment• More secure access to developed markets than GSP programs

Political ReasonsPolitical Reasons• increase bargaining

power• prevent backsliding on political/economic

reforms• ensure or reward

political support

Page 28: Trade Union Policies and Strategies on Free Trade Agreements

Effects of RTAs on the multilateral Effects of RTAs on the multilateral system are manifoldsystem are manifold

PositivePositive• economies of scale• laboratories for change• provide competition• attract FDI• allow countries to hone negotiating skills

NegativeNegative• strains negotiating capacity• dampens enthusiasm for multilateral negotiations• creates vested interests• labyrinthine rules of origin• trade and investment diversion• weakest countries left out

Page 29: Trade Union Policies and Strategies on Free Trade Agreements

Long-standing controversy about the interpretation of provisions relating to RTAs

Impasse in the current examination of agreements.

Negotiations launched at Doha have resulted in fruitful discussions on transparency, but no « early harvest » was achieved in time for Cancun.

Informal discussions on the more controversial systemic issues began in June.

RTAs in the WTO contextRTAs in the WTO context

Page 30: Trade Union Policies and Strategies on Free Trade Agreements

Issues for Trade UnionsIssues for Trade Unions

Page 31: Trade Union Policies and Strategies on Free Trade Agreements

What policies should trade What policies should trade unions support?unions support?

Multilateral trades or bi-lateral Multilateral trades or bi-lateral trades?trades?

Free trades or managed trades?Free trades or managed trades?

How to achieve socially-oriented, fair How to achieve socially-oriented, fair free trades? free trades?

Page 32: Trade Union Policies and Strategies on Free Trade Agreements

Case 1Case 1 ASEAN and China has signed a Free ASEAN and China has signed a Free

Trade AgreementTrade Agreement What are the implications of this agreement?What are the implications of this agreement?

Workers in ASEANWorkers in ASEAN Workers in ChinaWorkers in China Workers in Japan and KoreaWorkers in Japan and Korea Workers in SAARC countriesWorkers in SAARC countries

In terms ofIn terms of Economic and social development of the Economic and social development of the

countriescountries Employment, working conditions and worker Employment, working conditions and worker

rightsrights Decide your union’s position on this.Decide your union’s position on this.

Page 33: Trade Union Policies and Strategies on Free Trade Agreements

Trade Union Agenda 1Trade Union Agenda 1 Employment generation (reduction)Employment generation (reduction) Fair competitionFair competition Adequacy of economic and social safety Adequacy of economic and social safety

nets (for sectors affected by free trade)nets (for sectors affected by free trade) Education, training and retrainingEducation, training and retraining Assurance of corporate governance, Assurance of corporate governance,

transparency and accountabilitytransparency and accountability Fairer profit-sharing, gain-sharing and Fairer profit-sharing, gain-sharing and

productivity-oriented remuneration productivity-oriented remuneration schemesschemes

Respect for core labour standardsRespect for core labour standards Revisions of national labour legislation in Revisions of national labour legislation in

conformity with international standardsconformity with international standards

Page 34: Trade Union Policies and Strategies on Free Trade Agreements

Trade Union Agenda 2Trade Union Agenda 2 Socially oriented macroeconomic, trade and Socially oriented macroeconomic, trade and

investment policies (poverty eradication, etc.)investment policies (poverty eradication, etc.) Promotion of tripartism - trade union Promotion of tripartism - trade union

participation through “smart partnership”participation through “smart partnership” Information sharing and promotion of ICTInformation sharing and promotion of ICT Workers’ health and safety, and the Workers’ health and safety, and the

envenvironmentironment Promotion of gender equalityPromotion of gender equality Protection of the rights of migrant workersProtection of the rights of migrant workers Sufficient attention to informal economySufficient attention to informal economy Transfer of technologyTransfer of technology Contributions to local economic/social wellbeingContributions to local economic/social wellbeing

Page 35: Trade Union Policies and Strategies on Free Trade Agreements

Trade Union Agenda Trade Union Agenda 33 Promotion of technical skills within trade Promotion of technical skills within trade

unions on trade issuesunions on trade issues Setting up of a department/unit on trade issuesSetting up of a department/unit on trade issues Training and educationTraining and education Alliance with academics and NGOsAlliance with academics and NGOs

Promotion of Promotion of bi-lateral, regional and bi-lateral, regional and international trade union alliancesinternational trade union alliances Joint researchJoint research/study groups on trade issues/study groups on trade issues Information sharing and coordinated Information sharing and coordinated

lobbying/campaignlobbying/campaign Establishment of Establishment of trade union policies and trade union policies and

strategies on trades and investmentsstrategies on trades and investments

Page 36: Trade Union Policies and Strategies on Free Trade Agreements

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