The TPP's Uneven Attempt at Labor Protection

The agreement puts pressure on some countries, such as Vietnam and Malaysia, to improve worker’s rights. But it leaves out Mexico, a major U.S. trade partner.

A worker in a factory in Vietnam (Nguyen Huy Kham / Reuters)

When the Obama administration finally reached an agreement with 11 other countries on the Trans-Pacific Partnership, the president listed improving labor rights in other nations as one of the hallmarks of the deal. “When more than 95 percent of our potential customers live outside our borders, we can’t let countries like China write the rules of the global economy. We should write those rules, opening new markets to American products while setting high standards for protecting workers and preserving our environment,” Obama said in a statement.

But does the TPP really change anything in member countries such as Vietnam, Brunei, and Mexico, where worker abuses are rampant?

Most everyone agrees the agreement is an improvement over NAFTA, signed in 1995. Labor advocates have many complaints about that decades-old agreement, one being that many of the provisions meant to improve life for workers were unenforceable. In response to complaints about the lack of labor rights in NAFTA and other trade agreements, Congress came up in 2007 with the May 10th agreement, a bipartisan compromise aimed at ensuring that trade partners were actually working to improve labor conditions. It required that member countries adopt and enforce the basic labor standards set in the 1988 Declaration of the International Labor Organization. It also made labor disputes subject to the same settlement procedures as commercial trade disputes, meaning that countries that violated labor rules could be subject to sanctions. May 10th required the U.S. to hold countries more accountable for labor standards—Congress did not vote on trade agreements negotiated with Peru, Colombia, and Panama until those countries had changed their labor laws.

The TPP’s Labour chapter reiterates that all members should adopt and maintain the labor rights of the ILO. It also calls for all participants to end child labor and forced labor, and to allow workers to form unions and collectively bargain. It requires a minimum-wage, and safety and health standards meant to prevent common abuses like overcrowding, fire hazards, and overwork. But the document does not specify how any of those measures should work. And that’s a big shortcoming, according to John Sifton, the Asia advocacy director with Human Rights Watch. The minimum wage, for example, could be set at a penny an hour—which wouldn’t do much to help workers.

Countries such as Vietnam would have to completely revolutionize their legal systems to comply with the labor-union requirements, which doesn’t seem likely, Sifton said. That’s why the U.S. Trade Representative (USTR) negotiated the real teeth of the improvements on labor rights in consistency plans with some of the countries with the most serious human-rights violation records: Vietnam, Malaysia, and Brunei, he said. A consistency plan outlines changes a country needs to make before the trade agreement comes into force—and then relies on the U.S. to enforce those changes.

The new Vietnam consistency plan requires that the country enact legal reforms that allow members to organize into unions, increase protections against employment discrimination, and stiffen penalties for forced labor. Vietnam will not be able to officially join the TPP until the United States has determined that the country has met the labor requirements outlined, which include allowing workers to join a union.

Malaysia—where workers often end up in forced labor, according to Sifton—also has a consistency plan. It requires that the country lift restrictions that prevent workers from forming unions and improve the labor rights of migrant workers. It also requires that Malaysia make it illegal for employers to retain a worker’s passport. The country recently passed amendments to an anti-trafficking law, which the TPP would require the country to enforce, according to the office of the U.S. Trade Representative. The U.S. and Malaysian governments will meet annually for seven years after the agreement is signed to make sure labor changes are implemented, according to the plan.

There is also a consistency plan with Brunei, where the legal code is based on Sharia and where there are tens of thousands of migrant laborers. Brunei has recently amended its labor laws under pressure from TPP, according to a spokesman for the U.S. Trade Representative. The amendments prevent the government from canceling a trade union’s registration and ask it to strengthen child-labor protections. The consistency plan calls for the country to end document confiscation, to ban employment discrimination, and implement—for the first time—a minimum wage.

But the U.S. failed to negotiate such a plan with Mexico, where very few workers are able to join independent unions and where the U.S. does 15 percent of its trade. Mexico is the U.S.’s third-largest trading partner, after China and Canada. Only one percent of workers in Mexico are members of independent unions, but many are covered by protection contracts, which are essentially agreements between a company and a company-friendly union with no input from workers, according to the AFL-CIO. Workers there are advocating for more rights, so far, with little success. A consistency plan may have finally forced the Mexican government to follow through on labor reforms, Sifton said. “When they do negotiate these labor consistency plans, they do a good job,” he said. “That’s the tragedy of Mexico.”

The absence of a Mexico consistency plan is one of the many reasons the Labor Advisory Committee, an organization of U.S. labor-union representatives that weighed in during TPP negotiations, opposed the deal.

“There is not even a ‘consistency plan’ for Mexico despite the U.S. government’s extensive knowledge of the problems—problems that not only impoverish Mexico’s workers, but act as an inducement to transfer production out of the U.S.,” the labor committee writes.

But the committee isn’t confident that the plans are even all that useful.The Vietnam consistency plan, for example, gives the country a five-year grace period to allow workers at the factory level to unionize. Even if Vietnam does not implement the changes by the fifth year, the process for hashing out tariff reductions is so convoluted that they might not even happen, said Cathy Feingold, the director of the International Department at the AFL-CIO. Once the U.S. allows companies to access the benefits of the TPP, it’s very unlikely that the government would withhold those benefits should it come across labor abuses, Feingold said.

The plans for Brunei and Malaysia have similar flaws, the committee says. The Brunei agreement “fails to provide for labor courts or other structures free from the political influence of the Sultan,” the report says. And though Brunei is supposed to implement labor reforms before it joins the TPP, there is no independent evaluation mechanism, just the governments of the U.S. and Brunei.

The labor committee put forward dozens of proposals for how to improve the language in the consistency plans so that countries would be held accountable for improving labor rights, but very few are in the actual text, according to Feingold. “Consistency plans are an attempt to make the labor and human rights committee feel good that we talked about this, that we’re engaged in it, but a lot of it is unenforceable,” she said.

Democrats on the Hill aren’t quite as pessimistic. After all, last year, the U.S. brought forth a labor enforcement case against Guatemala, a sign that the government will hold its partners accountable (Critics say they first brought the violations to the government’s attention seven years ago). And when Costa Rica hadn’t passed intellectual property laws in the time period required, the U.S. blocked sugar imports, according to The administration says that consistency plans included in the TPP go further than any past trade agreements in labor rights. Matthew McAlvanah, a USTR spokesman, put it this way:

The groundbreaking implementation plans included in TPP which will, among other things, allow workers to join and establish independent unions in Vietnam and address human trafficking violation in Malaysia, are fully enforceable and backed up by trade sanctions. The plans will also be continually monitored and enforced and allow the U.S. to withhold access to benefits of the agreement if these countries are not meeting their commitments.

Mexico might not have a consistency plan, McAlvanah said, but he says that the country is working on reforms that would implement a better system of collective bargaining.  But it's a little hard to take those changes seriously when companies are allegedly firing Mexican workers who try to unionize.

Democrats on the Hill concede that consistency plans require whatever administration is in power in the U.S. to make sure that labor rights are being upheld. "You’re putting a lot of faith in an administration to take a role in policing, implementation, and doing a thorough job of judging when implementation has been fulfilled," one Congressional staffer told me.

Sifton thinks the consistency plans can work, or at least that they’re a good step toward requiring U.S. partners to improve their labor conditions. “The consistency plan has a shot—it could have done a lot more, but on balance, it could help,” he said.