[CTC] Froman Details TPP Labor Reform Goals With Vietnam, Brunei, Malaysia

[Arthur Stamoulis]

Inside US Trade

Froman Details TPP Labor Reform Goals With Vietnam, Brunei, Malaysia

Posted: September 11, 2015 
U.S. Trade Representative Michael Froman has provided new details about the specific labor reforms that the United States is seeking from Vietnam, Brunei and Malaysia in the context of the Trans-Pacific Partnership (TPP), as well as the agreement's labor and environment chapters, in a journal article touting the TPP as a progressive trade deal.

In an article in the fall edition of the journal Democracy that was circulated by USTR on Sept. 8, Froman acknowledged that the U.S. is “working with our TPP partners on the steps they'll need to take to meet . . . obligations” in the labor chapter.

This is an apparent reference to the labor “consistency plans” USTR officials have said they are negotiating with Vietnam, Mexico, Brunei and Malaysia. However, Froman did not spell out whether these countries would have to meet these obligations upon entry into force of the TPP or have phase-in periods and how long these would be.

Froman for the first time publicly said that Vietnam “will need to allow workers to form and join independent labor unions” as part of the steps needed to comply with the TPP labor chapter. Vietnam currently bars unions other than the Vietnam General Confederation of Labor, which is affiliated with the ruling Communist Party.

He said Brunei “will have to pass a minimum wage law and adopt laws to eliminate discrimination,” while Malaysia “will need to make a range of legal and institutional changes, including addressing forced labor and human trafficking.”

Froman did not say what reforms, if any, Mexico would have to make to its labor regime in the context of the TPP deal. This is a sensitive issue for the Mexican government, which has emphasized that its implementation <http://insidetrade.com/node/149548> of labor reforms is not linked to the conclusion of the TPP negotiations.

“While each country requires a tailored approach, the goal is the same: to make trade work better for workers,” Froman said.

According to Froman, the labor chapter will require countries to uphold in their laws and regulations the fundamental rights established by the International Labor Organization, including freedom of association, the right to collective bargaining, elimination of forced labor, abolition of child labor, and elimination of workplace discrimination. These are the principles and rights reflected in the 1998 ILO Declaration On The Fundamental Principles and Rights at Work, which ILO members pledge to promote, whether or not they have ratified the relevant conventions. The U.S. has ratified only two of the eight ILO core conventions, the ones on the abolition of forced labor and on the elimination of worst forms of child labor.

Adherence to the 1998 declaration was set as the standard for U.S. free trade agreements in the May 10, 2007, agreement between the George W. Bush administration and House Democrats. This obligation was subsequently reflected in the U.S. free trade agreements with Peru, Panama, South Korea and Colombia.

But Froman indicated the TPP labor chapter will go beyond the May 10 template by including three new elements, all of which were part of a U.S. labor proposal tabled in 2011. They are “requirements for countries to adopt laws on minimum wages, work hours, and occupational safety and health; to act against trade in goods produced by forced labor, including such goods made outside TPP countries; and to accept special protections against degradation of workers’ rights and working conditions in 'export processing zones,'” he wrote. He said that labor problems are often at their worst in these export processing zones.

Congressional Republicans in a December 2011 letter to then-USTR Ron Kirk criticized the U.S. labor proposal <http://insidetrade.com/node/25549> in TPP for going beyond the May 10 template. They argued that expanding the scope of labor obligations would "seriously undermine support for the TPP and jeopardize congressional approval of the agreement" and possibly delay the TPP negotiations.

On environment, Froman was less specific about the obligations that will be included in the TPP agreement, although he expressed confidence that U.S. priorities to combat fisheries subsidies and illegal wildlife trafficking would somehow be addressed in a final deal.

He said the TPP will be the first trade agreement to “prohibit some of the most harmful fishing subsidies, such as those provided to illegal fishing vessels,” although he did not identify which specific subsidies would be banned.

The U.S. had initially sought a broad ban on subsidies that contribute to overcapacity and overfishing, but TPP countries subsequently pushed for a narrower focus on subsidies that “target fishing of fish stocks that are in an overfished condition" or vessels known to have engaged in illegal, unreported or unregulated (IUU) fishing activities, according to a January 2011 compromise environment text drafted by Canada <http://insidetrade.com/node/138785> that was subsequently leaked.

But a lawyer with a prominent ocean conservation group said in March <http://insidetrade.com/node/146793> that he was confident the TPP provisions on fisheries were shaping up to be stronger than those contained in the Canadian compromise text.

Froman also said the TPP agreement would require countries “to implement measures to combat illegal fishing, including inspections and seizures at ports and monitoring, surveillance, and enforcement systems to curb trade in pirated fish.”

But he signaled that the agreement would fall short of demands by environmental groups for a binding obligation to prohibit the practice of harvesting sharks for their fins. He said TPP countries will merely be required “to promote the long-term conservation of sharks, whales, and sea turtles."

On the trafficking of plants and animals, Froman also was not specific, saying only that the “TPP includes commitments against wildlife trafficking.”

The U.S. had initially sought an obligation for countries to implement laws similar to the U.S. Lacey Act that prohibit the sale of illegally obtained plants and animals, but the 2011 Canadian compromise text indicated that other TPP members were seeking language that was more vague.

In the journal article, Froman did not mention whether the TPP would include commitments for participating countries to implement their obligations under seven multilateral environmental agreements (MEAs), which is a commitment subject to dispute settlement under the May 10 template.

Informed sources said the TPP environment chapter will only refer to three of these MEAs: the Convention on International Trade in Endangered Species of Wild Flora and Fauna (CITES), which prohibits trade in certain endangered plant and animal specifies; the Montreal Protocol on Substances that Deplete the Ozone; and the International Convention for the Prevention of Pollution from Ships (MARPOL).

Some sources said they expect CITES will be the only MEA for which TPP countries will be required to uphold their commitments, subject to TPP dispute settlement.

The third TPP area that Froman highlighted as reflecting progressive values was rules promoting digital trade. He expressed confidence that a final TPP deal would include the U.S.-proposed obligations for countries to maintain open cross-border data flows and avoid requirements that data be stored on a local servers within a given country, though some TPP countries such as Vietnam and Singapore had sought exceptions to some or all of those commitments.

But Froman said these digital trade commitments will be subject under TPP to “important safeguards such as privacy and consumer protection.” The latter safeguard would include an obligation for TPP countries to “stop junk emails, phishing schemes, and other unsolicited commercial electronic messages.”

With respect to privacy, Froman said that “[w]hile each country will retain the policy space necessary to implement its own privacy laws, TPP will require them to be transparent, predictable, and in the public interest.”

Froman highlighted these obligations on labor, environment and digital trade in order to back up his point that the TPP will allow the U.S. to play a leading role in shaping the rules for global trade that reflect its values. He said the TPP is an answer to the challenge of alternative trade models like China's that do not include labor and environmental rules; allow state-owned enterprises to benefit from subsidies; and allow governments to force the transfer of technology and intellectual property.

In addition to the benefits of being able to set the rules, Froman argued that the TPP will spur growth both within the United States and developing countries.

More generally, he sought to frame the Obama administration's push for TPP as following a bipartisan tradition of trade liberalization stretching back to President Franklin D. Roosevelt, who Froman said helped the U.S. overcome the Great Depression in part by negotiating reciprocal trade agreements that lowered U.S. tariffs.

Those efforts followed the Smoot-Hawley tariff increase of 1930 during the Herbert Hoover administration, a move that Froman argued “contributed to the depth and length of the Great Depression.”
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