As TPP Deal Inked, Guatemala Labor Case Unmasks Free Trade's Empty Promises
Friday, 09 October 2015 00:00 By Dan DiMaggio, Labor Notes | News Analysis
The US and 11 other nations reached an agreement October 5 on the final text
of the Trans-Pacific Partnership, a massive trade agreement that will cover
two-fifths of the world's economy.
Once President Obama gives notice of his intent to sign it, Congress will
have at least 90 days to review the text before voting it up or down,
without amendments. The earliest a vote could take place is January, though
many predict there won't be a vote until April.
The TPP has been much criticized by unions, who say it does little to
protect jobs and advances the rights of investors and corporations at the
expense of workers and the environment.
As with all the previous trade deals, the president is making lofty claims
about this one. Obama says the TPP will "[open] new markets to American
products while setting high standards for protecting workers and preserving
our environment."
But to see through the hollow rhetoric, you just have to look at the example
of the first-ever labor case brought under a free trade agreement - which is
about to wrap up, likely in the midst of the TPP debate in Congress.
In December, an arbitration panel will issue its ruling on a complaint
brought by the US under the Central American Free Trade Agreement (CAFTA)
against the Guatemalan government for failing to effectively enforce its
labor laws.
It's taken years to bring just one case this far, and the potential penalty
is a mere slap on the wrist.
Snail's Pace
It's been seven years since the AFL-CIO, together with six Guatemalan
unions, first submitted a complaint to the Department of Labor. They accused
Guatemala of failing to protect workers' legally guaranteed rights - to
association, collective bargaining, and acceptable conditions - by not
conducting inspections, registering unions, or ensuring compliance with
court orders.
Only 2 percent of Guatemala's working population belongs to a union. It has
become one of the most dangerous countries in the world for union activists.
The AFL-CIO reported that 72 Guatemalan unionists had been murdered since
CAFTA went into effect, as of August 2014, with near-total impunity for
their assassins.
The slow pace of the CAFTA case is "a huge detriment to workers in
Guatemala," said Stephen Wishart, Central America director for the AFL-CIO
Solidarity Center. "Their rights are being violated in the same ways that
were presented back in 2008."
The delays have simply given the Guatemalan government an opportunity to
"put make-up on the problems," said Homero Fuentes, of a Guatemalan labor
standards monitoring organization called COVERCO.
After deciding to accept the case, the US held consultations with the
Guatemalan government, but failed to reach an agreement. In 2011 the US
requested the establishment of the arbitration panel, which is supposed to
protect workers' rights under CAFTA.
The panel was finally constituted in 2012 - but was put on hold six months
later, when Guatemala signed an Enforcement Plan, agreeing to add more labor
inspectors and increase the Ministry of Labor's budget for enforcement.
But Guatemala failed to act on most of the plan. Finally last September, the
US requested that the panel be reconstituted. The first hearing was held in
June.
"A lot of people would argue that the timing of that is not coincidental -
we're in the middle of a huge trade debate," said Cassandra Waters, a Global
Workers Rights Fellow at the AFL-CIO.
Violence Unaddressed
Anti-union violence isn't among the complaint's charges. The US government
argues that's a problem that falls outside the scope of free-trade pacts.
The AFL-CIO disagrees. "There's nothing in these agreements that prevents
them from taking up violence," said Waters. "Guatemala is required to
enforce its laws related to freedom of association - and that would include
investigating murders of trade unionists."
The violence, coupled with other failures to enforce labor law, make it
extraordinarily difficult for Guatemalan workers to form unions.
For example, according to Fuentes, there are unions in only three of the
country's more than 160 garment factories. Forty percent of total Guatemalan
exports go to the US - and 94 percent of garment exports - are destined for
the US market.
Guatemala, the largest economy in Central America, is the US's largest
banana supplier. It also exports hundreds of millions of dollars of coffee,
apparel, and gold each year.
Don't Even Bother
The basis for the complaint is a CAFTA provision that the parties may not
repeatedly fail to enforce labor laws in a way that affects trade.
It cites palm oil plantations where workers allege they were paid $5 dollar
a day - half the legal minimum - and suffered burns when they were forced to
fumigate fields without protection.
It also refers to workers in a number of industries who were illegally fired
for organizing on the job, and who have waited years to get their jobs back.
A major stumbling block to labor law enforcement is that the Guatemalan
Ministry of Labor's cannot legally fine employers. Instead it must go
through the courts, which delays sanctions.
And even then, employers often ignore court orders, and the government
stands by.
"There's a large number of cases where the Ministry of Labor hasn't acted,"
said Waters, "but there's even more cases where the workers no longer bother
to contact the Ministry because they have no hope that anything's going to
happen."
Weak and Skewed
The panel has three members, chosen from a roster established under CAFTA.
Each party chooses one member, and the two sides pick a chair together.
Guatemala chose a constitutional law scholar who, according to some
activists, has close ties to the private sector.
"For us, this is a first negative decision of the arbitral process, since as
we understand it the arbitrators should be suitable, honorable, and
independent professionals," said Mirna Nij of the Union of Workers in the
Informal Economy (Sindicato de Trabajadores de la Economía Informal). "We
believe this lawyer does not have these characteristics."
If the panel finds against Guatemala, it will face a fine of up to $15
million a year. This money would go into a fund dedicated to strengthening
the country's labor institutions.
"The best-case scenario is that Guatemala pays a fine to itself - which
isn't a very effective deterrent," said Waters.
And as José Pinzón, of the Central General de Trabajadores de Guatemala,
points out, "It won't be the government, or the business sector, who will
pay it - it will be the more than 15 million Guatemalans who have to pay
it."
Still, Waters said, "the fact that the US chose to take Guatemala to
arbitration is good, because we should be taking these commitments
seriously."
Provisions do exist that would allow the US to suspend some trade benefits,
but only if Guatemala fails to pay the fine.
Trust Us This Time
Since CAFTA, US free-trade agreements have made some advances, including an
enforceable obligation to adopt and maintain basic principles recognized by
the International Labor Organization: freedom of association, the right to
collective bargaining, the effective abolition of forced labor and child
labor, and the elimination of employment discrimination.
"There have been significant improvements about what rights [newer trade
agreements] govern," said Waters. "But the actual reality about whether
those laws are enforced hasn't gotten any better."
The Obama administration promotes the TPP as "the most progressive trade
bill in history," with the highest labor standards yet.
But as a report from Sen. Elizabeth Warren's staff pointed out, similar
promises have been trotted out to justify every free-trade agreement from
NAFTA on.
For example, in 2005, US Trade Rep. Rob Portman said CAFTA "has the
strongest labor and environmental provisions of any trade agreement ever
negotiated by the US"
Wishart argues that in all these agreements, the "mechanisms are weaker than
what existed under the Generalized System of Preferences," which provides
preferential tariff treatment to developing countries and applied to
Guatemala prior to CAFTA.
The GSP is still in effect for countries not covered by a trade agreement,
like Bangladesh, which had its preferential tariffs revoked in 2013 after
1,129 factory workers were killed in the Rana Plaza disaster.
This US action "immediately triggered some reforms," Wishart said - unlike
the CAFTA process that has allowed Guatemala to drag its feet for years.
Enforecement Gap
A Government Accountability Office report last year found that the US is
systematically failing to monitor and enforce compliance with the labor
provisions in its free trade agreements.
The agency highlighted the same problem in a similar report five years
earlier.
In all five cases where the Department of Labor has accepted submissions
alleging violations of labor provisions in free-trade agreements, it's
missed its 180-day timeline to review them. The average lateness: nine
months.
Most recently, it took over three years to review a submission from the
AFL-CIO and Honduran unions alleging a systematic failure by the government
of Honduras to enforce its labor laws.
Department of Labor officials expect that the TPP - which includes serial
labor-rights violator Vietnam, where it is still illegal to form an
independent union - will strain their resources even further.
Most of the leverage on labor rights, Waters feels, comes before an
agreement is signed. "Guatemala's an excellent example of a country that
wasn't even compliant with CAFTA requirements when it came into force," she
said.
"The idea that these agreements are going to raise labor standards is
completely false. There's been no improvement on labor rights in Guatemala -
if anything things have gotten worse."
Some Guatemalan activists think unions should play a stronger role in
monitoring compliance with any obligations in free-trade agreements. Fuentes
said more official resources could have been allotted to Guatemalan labor to
document what was happening to workers. He said a type of union-run
monitoring board could have been set up.
That certainly sounds like a more effective approach than relying on the
Guatemalan government, widely regarded as one of the most corrupt in the
hemisphere. The country's president and vice president were both recently
forced to resign in a massive corruption scandal, and are now in prison
awaiting trial.
In November, the International Labor Organization will decide whether to
establish a Commission of Inquiry - its highest form of supervision - to
investigate Guatemala's systematic violations of workers' rights.
New book from Labor Notes: How to Jump-Start Your Union: Lessons from the
Chicago Teachers tells how activists transformed their union and gave
members hope. "A beacon to all rank-and-file members on how to bring
democracy to their locals." Buy one today, only $15.
This piece was reprinted by Truthout with permission or license. It may not
be reproduced in any form without permission or license from the source.
RELATED STORIES
TPP in the USA Is Why We Occupy
By William Rivers Pitt, Truthout | Op-Ed
TPP Would Deepen Income Divide
By Roger Bybee, TripleCrisis | Report
________________________________________
Show Comments
Hide Comments
<a href="http://truthout.disqus.com/?url=ref";>View the discussion
thread.</a>
Error! Hyperlink reference not valid.
As TPP Deal Inked, Guatemala Labor Case Unmasks Free Trade's Empty Promises
Friday, 09 October 2015 00:00 By Dan DiMaggio, Labor Notes | News Analysis
font size Error! Hyperlink reference not valid. Error! Hyperlink
reference not valid.Error! Hyperlink reference not valid. Error! Hyperlink
reference not valid.
The US and 11 other nations reached an agreement October 5 on the
final text of the Trans-Pacific Partnership, a massive trade agreement that
will cover two-fifths of the world's economy.
Once President Obama gives notice of his intent to sign it, Congress
will have at least 90 days to review the text before voting it up or down,
without amendments. The earliest a vote could take place is January, though
many predict there won't be a vote until April.
The TPP has been much criticized by unions, who say it does little to
protect jobs and advances the rights of investors and corporations at the
expense of workers and the environment.
As with all the previous trade deals, the president is making lofty claims
about this one. Obama says the TPP will "[open] new markets to American
products while setting high standards for protecting workers and preserving
our environment."
But to see through the hollow rhetoric, you just have to look at the example
of the first-ever labor case brought under a free trade agreement - which is
about to wrap up, likely in the midst of the TPP debate in Congress.
In December, an arbitration panel will issue its ruling on a complaint
brought by the US under the Central American Free Trade Agreement (CAFTA)
against the Guatemalan government for failing to effectively enforce its
labor laws.
It's taken years to bring just one case this far, and the potential penalty
is a mere slap on the wrist.
Snail's Pace
It's been seven years since the AFL-CIO, together with six Guatemalan
unions, first submitted a complaint to the Department of Labor. They accused
Guatemala of failing to protect workers' legally guaranteed rights - to
association, collective bargaining, and acceptable conditions - by not
conducting inspections, registering unions, or ensuring compliance with
court orders.
Only 2 percent of Guatemala's working population belongs to a union. It has
become one of the most dangerous countries in the world for union activists.
The AFL-CIO reported that 72 Guatemalan unionists had been murdered since
CAFTA went into effect, as of August 2014, with near-total impunity for
their assassins.
The slow pace of the CAFTA case is "a huge detriment to workers in
Guatemala," said Stephen Wishart, Central America director for the AFL-CIO
Solidarity Center. "Their rights are being violated in the same ways that
were presented back in 2008."
The delays have simply given the Guatemalan government an opportunity to
"put make-up on the problems," said Homero Fuentes, of a Guatemalan labor
standards monitoring organization called COVERCO.
After deciding to accept the case, the US held consultations with the
Guatemalan government, but failed to reach an agreement. In 2011 the US
requested the establishment of the arbitration panel, which is supposed to
protect workers' rights under CAFTA.
The panel was finally constituted in 2012 - but was put on hold six months
later, when Guatemala signed an Enforcement Plan, agreeing to add more labor
inspectors and increase the Ministry of Labor's budget for enforcement.
But Guatemala failed to act on most of the plan. Finally last September, the
US requested that the panel be reconstituted. The first hearing was held in
June.
"A lot of people would argue that the timing of that is not coincidental -
we're in the middle of a huge trade debate," said Cassandra Waters, a Global
Workers Rights Fellow at the AFL-CIO.
Violence Unaddressed
Anti-union violence isn't among the complaint's charges. The US government
argues that's a problem that falls outside the scope of free-trade pacts.
The AFL-CIO disagrees. "There's nothing in these agreements that prevents
them from taking up violence," said Waters. "Guatemala is required to
enforce its laws related to freedom of association - and that would include
investigating murders of trade unionists."
The violence, coupled with other failures to enforce labor law, make it
extraordinarily difficult for Guatemalan workers to form unions.
For example, according to Fuentes, there are unions in only three of the
country's more than 160 garment factories. Forty percent of total Guatemalan
exports go to the US - and 94 percent of garment exports - are destined for
the US market.
Guatemala, the largest economy in Central America, is the US's largest
banana supplier. It also exports hundreds of millions of dollars of coffee,
apparel, and gold each year.
Don't Even Bother
The basis for the complaint is a CAFTA provision that the parties may not
repeatedly fail to enforce labor laws in a way that affects trade.
It cites palm oil plantations where workers allege they were paid $5 dollar
a day - half the legal minimum - and suffered burns when they were forced to
fumigate fields without protection.
It also refers to workers in a number of industries who were illegally fired
for organizing on the job, and who have waited years to get their jobs back.
A major stumbling block to labor law enforcement is that the Guatemalan
Ministry of Labor's cannot legally fine employers. Instead it must go
through the courts, which delays sanctions.
And even then, employers often ignore court orders, and the government
stands by.
"There's a large number of cases where the Ministry of Labor hasn't acted,"
said Waters, "but there's even more cases where the workers no longer bother
to contact the Ministry because they have no hope that anything's going to
happen."
Weak and Skewed
The panel has three members, chosen from a roster established under CAFTA.
Each party chooses one member, and the two sides pick a chair together.
Guatemala chose a constitutional law scholar who, according to some
activists, has close ties to the private sector.
"For us, this is a first negative decision of the arbitral process, since as
we understand it the arbitrators should be suitable, honorable, and
independent professionals," said Mirna Nij of the Union of Workers in the
Informal Economy (Sindicato de Trabajadores de la Economía Informal). "We
believe this lawyer does not have these characteristics."
If the panel finds against Guatemala, it will face a fine of up to $15
million a year. This money would go into a fund dedicated to strengthening
the country's labor institutions.
"The best-case scenario is that Guatemala pays a fine to itself - which
isn't a very effective deterrent," said Waters.
And as José Pinzón, of the Central General de Trabajadores de Guatemala,
points out, "It won't be the government, or the business sector, who will
pay it - it will be the more than 15 million Guatemalans who have to pay
it."
Still, Waters said, "the fact that the US chose to take Guatemala to
arbitration is good, because we should be taking these commitments
seriously."
Provisions do exist that would allow the US to suspend some trade benefits,
but only if Guatemala fails to pay the fine.
Trust Us This Time
Since CAFTA, US free-trade agreements have made some advances, including an
enforceable obligation to adopt and maintain basic principles recognized by
the International Labor Organization: freedom of association, the right to
collective bargaining, the effective abolition of forced labor and child
labor, and the elimination of employment discrimination.
"There have been significant improvements about what rights [newer trade
agreements] govern," said Waters. "But the actual reality about whether
those laws are enforced hasn't gotten any better."
The Obama administration promotes the TPP as "the most progressive trade
bill in history," with the highest labor standards yet.
But as a report from Sen. Elizabeth Warren's staff pointed out, similar
promises have been trotted out to justify every free-trade agreement from
NAFTA on.
For example, in 2005, US Trade Rep. Rob Portman said CAFTA "has the
strongest labor and environmental provisions of any trade agreement ever
negotiated by the US"
Wishart argues that in all these agreements, the "mechanisms are weaker than
what existed under the Generalized System of Preferences," which provides
preferential tariff treatment to developing countries and applied to
Guatemala prior to CAFTA.
The GSP is still in effect for countries not covered by a trade agreement,
like Bangladesh, which had its preferential tariffs revoked in 2013 after
1,129 factory workers were killed in the Rana Plaza disaster.
This US action "immediately triggered some reforms," Wishart said - unlike
the CAFTA process that has allowed Guatemala to drag its feet for years.
Enforecement Gap
A Government Accountability Office report last year found that the US is
systematically failing to monitor and enforce compliance with the labor
provisions in its free trade agreements.
The agency highlighted the same problem in a similar report five years
earlier.
In all five cases where the Department of Labor has accepted submissions
alleging violations of labor provisions in free-trade agreements, it's
missed its 180-day timeline to review them. The average lateness: nine
months.
Most recently, it took over three years to review a submission from the
AFL-CIO and Honduran unions alleging a systematic failure by the government
of Honduras to enforce its labor laws.
Department of Labor officials expect that the TPP - which includes serial
labor-rights violator Vietnam, where it is still illegal to form an
independent union - will strain their resources even further.
Most of the leverage on labor rights, Waters feels, comes before an
agreement is signed. "Guatemala's an excellent example of a country that
wasn't even compliant with CAFTA requirements when it came into force," she
said.
"The idea that these agreements are going to raise labor standards is
completely false. There's been no improvement on labor rights in Guatemala -
if anything things have gotten worse."
Some Guatemalan activists think unions should play a stronger role in
monitoring compliance with any obligations in free-trade agreements. Fuentes
said more official resources could have been allotted to Guatemalan labor to
document what was happening to workers. He said a type of union-run
monitoring board could have been set up.
That certainly sounds like a more effective approach than relying on the
Guatemalan government, widely regarded as one of the most corrupt in the
hemisphere. The country's president and vice president were both recently
forced to resign in a massive corruption scandal, and are now in prison
awaiting trial.
In November, the International Labor Organization will decide whether to
establish a Commission of Inquiry - its highest form of supervision - to
investigate Guatemala's systematic violations of workers' rights.
New book from Labor Notes: How to Jump-Start Your Union: Lessons from the
Chicago Teachers tells how activists transformed their union and gave
members hope. "A beacon to all rank-and-file members on how to bring
democracy to their locals." Buy one today, only $15.
This piece was reprinted by Truthout with permission or license. It may not
be reproduced in any form without permission or license from the source.
Related Stories
TPP in the USA Is Why We Occupy
By William Rivers Pitt, Truthout | Op-EdTPP Would Deepen Income Divide
By Roger Bybee, TripleCrisis | Report
Show Comments
