4. Labour

Background

Working people in the Americas believe that a just trading system is one that recognizes that basic labour standards and other measures for improving the welfare of working people cannot be left exclusively to markets. The future hemispheric accord must include provisions that guarantee basic worker rights, that ensure proper assistance for adjustment as markets are opened up, and that promote the improvement of working and living standards of workers and their families.

There exists a long tradition within the international community recognizing the necessity to apply and respect basic international labour standards. This recognition led to the creation in 1919 of the International Labour Organization (ILO), an institution that survives to this day as a UN agency that has the specific mandate of defining and monitoring international labour standards. All 35 countries of the Americas are members of the ILO and have ratified ILO conventions.

Current trade agreements within the hemisphere, such as the MERCOSUR and NAFTA (more precisely, the NAFTA side-agreement on labour, officially called the North American Agreement on Labour Cooperation or NAALC) state that fundamental principles regarding labour conditions should be respected within all member countries and that the agreements should contribute to a general improvement of the living standards of workers.

However, not even the most optimistic analyst of the impact of trade agreements such as NAFTA and the MERCOSUR would claim that these agreements have contributed to a general improvement of working conditions in member countries. On the contrary, the introduction of these agreements has led to greater instability of jobs and insecurity in the workplace. This has been the case most dramatically in Mexico since NAFTA came into effect in 1994. The specific provisions on labour standards, such as NAFTA's NAALC, tend to be strong on principles but weak on any specific mechanisms that can have a real impact on working people.

Moreover, it is a recognized fact that even the most basic labour standards agreed upon at the ILO are regularly flouted by employers throughout most countries of the Americas, more often than not in attempting to obtain a competitive advantage over other employers. This takes place in spite of the fact that all countries of the hemisphere are members of the ILO, thus endorsing in principle the respect of international labour standards.

Guiding Principles

• Working people and their organizations have the right to participate in decision-making at the national and international level regarding the hemispheric integration process in order to ensure that this process contributes to improving the living standards of workers.

• The commitment to apply and respect basic workers' rights should be included in any hemispheric agreement as an obligatory requirement for membership in the accord. An appropriate and effective enforcement mechanism should also be included.

• An appropriate adjustment mechanism must be included to ensure that those workers who find their jobs rendered redundant by the opening-up of markets are provided with the opportunities to find other employment, through measures such as skills retraining, infrastructure development, and specific job-creation schemes.

• The hemispheric accord must include mechanisms to promote and improve the living standards of workers through legal norms and social programs in countries participating in the accord. As a basic principle, these mechanisms should strive to establish basic social programs in countries where they do not presently exist and to raise standards towards the highest standards existing in member countries.

Specific Objectives

1. Worker Rights Clause

Since the early 1990s, the international labour movement has promoted the inclusion in international trade agreements of a "Workers Rights Clause," which would force employers and governments to deal with the frequent and repeated violation of fundamental workers' rights. Within the Americas, the Inter-American Regional Organization of Workers (ORIT), which represents a large majority of unionized workers in the Americas, has proposed the creation of a working group on labour and social issues as part of the FTAA negotiating structures which would have the mandate to negotiate basic labour standards for the Americas. Trade unions of the Americas would have direct participation in this working group.

Our proposed clause in the hemispheric accord for the Americas could result in certain producers losing the privileges accorded by the trade agreement, i.e. tariff-free access to foreign markets included in the free-trade zone, if fundamental workers' rights are not respected. The fundamental rights are defined as those covered by seven core Conventions of the ILO (among the total of 182 that have been adopted between 1919 and 1998), namely:

• Conventions 29 and 105 on the abolition of forced labour;
• Conventions 87 and 98 on the rights to freedom of association, to collective bargaining, and to trade-union action, including the right to elect trade union representatives without employer or government interference, and the right to strike;
• Conventions 100 and 111 on equal pay for work of equal value, and on the prevention of discrimination in the workplace;
• Convention 138 on the minimum working age (i.e., prevention of child labour).

All countries of the Americas have ratified one or more of these "core conventions" of the ILO. Moreover, virtually all governments of the countries of the Americas have stated that they respect and strive to apply the principles contained in these Conventions, even when they have not yet ratified them formally. Despite these assurances, the rights to freedom of association and collective bargaining are routinely violated by a vast number of countries in the hemisphere, and child labour is endemic in several countries, as is workplace discrimination against women and specific racial or ethnic groups.

For these reasons, we propose that the seven fundamental workers' rights Conventions of the ILO as described above be included in a hemispheric agreement, meaning that employers and governments would be obliged to respect these Conventions as a condition of access to the benefits of the agreement.

2. Monitoring and Enforcement

Naturally, such a workers' rights provision would be effective only to the extent that it were accompanied by an effective monitoring and enforcement mechanism. We propose that the monitoring function, as well as that of making recommendations regarding the application of specific enforcement measures, be delegated to the ILO, whose expertise in the field of monitoring the application of international labour standards is universally recognized.

The complaints-based procedure that the ILO currently uses for keeping track of the respect of the freedom of association Conventions would be used for the Americas' workers' rights clause. That is to say, unions or other non-governmental organizations could initiate an examination procedure by the ILO by lodging a complaint to the latter when fundamental rights contained in the core Conventions are violated.

The ILO would, at a first stage, carry out an investigation to verify whether or not the Conventions have in fact been violated. In cases where the Conventions are confirmed to have been violated, the ILO would, at a second stage, formulate recommendations to the country to assist it in complying with the Conventions which have not been respected. Only if this second stage were unsuccessful would the enforcement mechanism be applied, which is to say that the direct perpetrator of the violations would be deprived of specific benefits of the accord, i.e., through trade sanctions.

To the extent that the perpetrator of the violation was a specific company, any specific sanctions would be directly targeted at that company. For example, if an auto-parts manufacturer in Country A were found to have violated the rights of freedom of association of its work-force, the exports coming from that particular manufacturer in Country A would no longer benefit from tariff-free access to all other countries party to the accord. Regular customs duties would be applied, in accordance with WTO agreements, as if the particular export came from outside of the Americas' free-trade area.

More generalized sanctions—i.e., sanctions which would apply to all exports from a particular country—would only be administered if the country's government were shown to be an active and repeated accomplice in the violation of fundamental workers' rights in that country.

If both countries and companies were obligated to respect and apply fundamental workers' rights, this would help to establish and generalize workplace practices throughout the Americas, in which:

• the most extreme forms of labour exploitation would be eliminated;
• workers could, without suffering threats to their jobs and their physical well-being, strive to improve their wages and working conditions; and
• workers and employers could resolve their differences through peaceful means.

3. Mechanisms for Adjustment and Job Creation

The elimination of tariff barriers and other forms of protection will inevitably lead to the elimination of certain people's livelihoods in industries unable to meet the challenges of increased competition. If hemispheric free trade does contribute to greater economic efficiency and thus a general improvement of economic welfare, as its proponents claim it will, there should be no hesitation in assuring that the "losers" are compensated. Failure to do so could entail the marginalization of vast numbers of workers and agricultural producers through the process of hemispheric integration.

For this reason it is important that the future hemispheric agreement include a mechanism for allowing national economies to adjust to the impacts of economic integration, namely in the areas of skill retraining, infrastructure development and specific job-creation programs. Compensatory financing would obviously be necessary in order to take account of the unequal levels of development and capacities to adjust of different national economies and, as well, specific regions within countries. Specific funds would be provided for adjustment programs specifically targeted to assist those women and men working in industries or living in areas that suffer job losses through economic integration.

The European Union (EU) has established precedence for such financial support by providing structural development aid to the lower-income countries in the Union and also to specific geographic regions within higher-income member countries that have suffered from a decrease in protection or otherwise have not been able to reap the benefits of the integrated market. In a similar fashion, a structural development fund should be created as part and parcel of the agreement for the Americas to provide financial support for worker training, infrastructure development and job creation in lower-income countries and in designated regions within countries.

Such a fund could be financed either through levies paid by countries on a scale which varies with the per capita income level (as is the case in Europe), or through a specific financing mechanism such as a Tobin Tax (i.e., a tax on international financial transactions) applied in the Americas.

4. Basic Labour Standards and Social Programs

In addition to the inclusion of a workers' rights clause and appropriate adjustment mechanisms, we believe that the hemispheric agreement must include mechanisms for improving basic labour standards and social programs so that the agreement contributes to a betterment of working and living conditions for working people and a more equalized distribution of income within countries. Given the vastly different levels of development between countries of the Americas, we do not envisage developing anything like a common minimum wage throughout the hemisphere. However, it would certainly be within the scope of the agreement to establish guidelines—for example, in relation to defined levels of subsistence, in setting minimum wages in the national context.

Guidelines could also be established in the area of hours of work, rules on overtime pay, rest periods and vacations. As a first step, there would be a process for meeting minimum ILO standards and, subsequently, harmonizing upwards in order to move towards the highest existing standards within the hemisphere. A more rapid process of harmonization would be put in place regarding the definition of hemispheric norms for the prevention of workplace accidents and work-related disease, based on the highest existing standards in the Americas. These processes would be established with the full participation not only of governments but also of representative trade union and employers' organizations.

There currently exist enormous differences between the countries of the Americas in the area of social and income-support programs, although there is a general tendency throughout the hemisphere for a serious deterioration of these programs as a result of government cutbacks. Even Canada, which used to pride itself on according a level of social protection that put it in the same league as Western European countries, currently has fallen behind all member countries of the European Union in terms of income maintenance for unemployed men and women.

In other countries, universal state pension schemes are being privatized or otherwise eroded, leading to greater inequality of income for retired workers, especially women. If economic integration of the Americas is to contribute to a generalized improvement of living standards in the hemisphere, the rapid erosion of social protection that has taken place over the past decade obviously has to be reversed. Specific targets for basic social and income-support programs should therefore be included in the agreement, including unemployment insurance, compensation for injured workers, and pensions for retired workers.

In addition, financing through the hemispheric agreement must be provided to countries that, because of low per capita income levels, do not have the means to finance such schemes entirely on their own. A financing mechanism, perhaps modelled on the EU's social fund, could provide the necessary financial support.

Hemispheric economic integration can be expected to make capital even more mobile than it already is and, subsequently, lead to greater job instability. The hemispheric agreement should provide for protection of workers against increasing job instability, especially respecting employers who may seek to avoid their obligations with regards to their employees by transferring their production to another country. All employers would be required to adhere to nationally administered funds ensuring the payment of all due wages and other indemnities employees are entitled to in case of job termination. Basic hemispheric standards regarding advance notice of layoffs and protection for part-time and sub-contracted labour would also be put in place.