MAXIMIZING SOCIAL AND LABOUR BENEFITS OF EXTERNAL TRADE AND INVESTMENT AGREEMENTS THROUGH SOCIAL DIALOGUE

Transcription

1 MAXIMIZING SOCIAL AND LABOUR BENEFITS OF EXTERNAL TRADE AND INVESTMENT AGREEMENTS THROUGH SOCIAL DIALOGUE Presented to a Tripartite Caribbean Symposium on Tripartism and Social Dialogue: Comparative Experiences in Dealing with Economic and Social Dev elopement Issues What is Social Dialogue? by Errol L. Humphrey, Consultant - EPA Implementation Ministry of Foreign Affairs & Foreign Trade I do not intend to discuss Social Dialogue per se, because everyone in this room might be better placed than me to undertake such a discussion. Nevertheless, in order to establish the framework within which I propose to make a few observations, I will begin by acknowledging an International Labour Organization (ILO) definition of Social Dialogue to include all types of negotiation, consultation or exchange of information between, or among, representatives of governments, employers and workers, on issues of common interest relating to economic and social policy. Furthermore, this dialogue can be regarded as being a tripartite process when the government is an official party to the dialogue along with trade unions and employers' organizations. Where are we in the Caribbean? In practice, the Social Partnership model in Barbados is often looked at as an example of how such arrangements should work and it is frequently cited as a reference case, both inside and outside of the Caribbean. There are other, less well known examples within the Caribbean social partnerships can now be found in most CARICOM Member States. A common characteristic in all of these processes is that the Government involves, in a structured and transparent way, the social partners and other pertinent actors in policy-making. This creates the opportunity for participatory governance, whereby non-governmental actors can express concerns and interests in a formal institutional structure. This approach also increases the ownership of or buy-in to decisions, which are subsequently taken by Government. The regional dimension At the regional level, the Caribbean Community recognizes social dialogue and tripartism as powerful tools for addressing important regional issues. This is reflected through the adoption of the CARICOM Declaration of Labour and Industrial Relations Principles in 1995 and the CARICOM Charter of Civil Society in This Charter provides for, inter alia, a role for the social partners in decision-making processes and constitutes one of the foundations for participatory democracy. Representatives of regional and sub-regional institutions, including the Caribbean Employers' Confederation, the Caribbean Congress of Labour, the Martinique Economic and Social Council, representatives of national tripartite organizations and a number of international organizations such as the ILO and the European Union (EU) also met in Port-of-Spain in 1

2 April, 2000 and drew up a declaration on the promotion of social dialogue in the wider Caribbean through decentralized cooperation. Therefore, in addition to the national perspectives referred to earlier, there are also established social dialogue mechanisms at the regional level. This regional approach can strengthen the position of CARICOM Member Governments in dealings with international trade issues, such as the CARIFORUM-EU Economic Partnership Agreement (EPA), the WTO or the CARICOM-Canada Trade and Development Agreement. Common Objectives Important It is against this background of the existence of national and regional social dialogue structures that I will make a few brief remarks about the role that Caribbean tripartite partnerships and social dialogue can play in influencing the region s participation in international trade negotiations and in implementing the resulting agreements. This morning, my remarks will be made primarily within the context of the recently concluded EPA negotiations - maybe not so recent - and I will also refer briefly to the current CARICOM negotiations with Canada. Furthermore, since the role of one-third of the tripartite partnership, namely the Government, has a mandatory role in international trade policy, I will be discussing the role of the other two partners. Government is de jure and de facto the responsible and in some cases the negotiating Party for these and all other international trade agreements, Nevertheless, it is important to ensure that the overarching goals and objectives associated with international trade agreements are supported, not only by the Government, but also by the representatives of the Trade Unions and the Employers Organizations because tripartism works best when all three parties have a common goal. It is not by accident or merely through personal chemistry between the principal participants that the Barbados Social Partnership has worked as well as it has. It has been driven by clear objectives, which have been embraced by all three pillars of the Partnership. Social Dialogue in the context of the Economic Partnership Agreement (EPA) With respect to the EPA negotiations, in my view, the key principles and goals approved by Heads of Government and pursued by the region s negotiators were compatible with the interests of the other members of the Social Partnership. Some of CARIFORUM s objectives going into the negotiations, included: o Promoting sustainable development in CARIFORUM member states (This was and remains the key objective); o Improving market access into the EU for CARIFORUM services providers; o Assistance in advancing the region s already ongoing integration process; o Special & Differential Treatment for the small and vulnerable CARIFORUM countries; o An asymmetrical approach to Trade Liberalisation between the parties; o Assistance in improving the capability of the region s services suppliers to deliver a range of quality services competitively in the EU market; o Improving the region s competitiveness by addressing the supply-side constraints, which have been inhibiting the capacity of CARIFORUM Member States to benefit from preferential market access; and 2

3 o Finding a more efficient vehicle through which to expedite the delivery of EC development assistance to the region. In addition to the objectives listed above, CARIFORUM wanted to ensure that the Agreement was structured to reflect a number of the key principles, which feature in the region s strategic approach to its international trade policy. These principles include: (i) (ii) (iii) (iv) (v) Emphasis on sustainable economic development and poverty alleviation in CARIFORUM member states; an asymmetric approach with respect to market access for goods and services; the importance of services to the region, particularly tourism and cultural services; respect for CARIFORUM s regional integration process and its variable geometry ; and a phased CARIFORUM tariff liberalisation schedule. Social Partners played their part in EPA Negotiations Although CARIFORUM conducted the EPA negotiations through a College of Negotiators, the region s approach was characterized by consultations with stakeholders before and during the negotiations. Ministries of Foreign Trade consulted on an ongoing basis with other Ministries, with private sector representatives and with Trade Union representatives. In addition, as the ILO concept note indicates: Since the 2006 Tripartite Caribbean Employment Forum, the ILO has held several events for employers and workers with the participation of government representatives so that constituents were informed on content, processes and procedures of past, ongoing and future negotiations of international trade and investment agreements. The then EPA negotiation was a particular focus of these activities and this proactive approach by the social partners was useful in helping to find consensus on regional priorities in order to inform and strengthen the region s negotiating positions. Certain Business Support Organizations (BSOs) were particularly active during the negotiations, the Caribbean Hotel and Tourism Association (CHTA) and the West Indies Rum and Spirits Producers Association (WIRSPA) are two, which deserve special mention. These two BSOs, not only consulted extensively with relevant Ministries and the College of Negotiators, but they even drafted the text, on which the region s positions with respect to their industries was based. They have also continued to be proactive during the implementation phase I would recommend their approach to any BSO interested in providing more effective support before, during, and after trade negotiations. Summary of EPA Provisions A review of the provisions of the Agreement indicates the extent to which the region was able to maintain its principles and achieve key objectives. I do not propose to go into details on this occasion, but will merely note, in passing, that the signed EPA provides for: A more holistic approach to Development Cooperation: An asymmetric outcome to market access in Services - with the EC liberalising 94% of its services sectors while the more developed Cariforum countries (MDC) will liberalise 65% and the lesser developed (LDC) 55%. The Dominican Republic agreed to liberalise 84%. 3

4 With respect to trade in goods, whereas the EU is liberalising immediately all imports from Cariforum; the region, starting from a position where 51% of imports from the EU were already free of duty, agrees to liberalise 86.9% of the value of its imports over twenty-five (25) years. Treatment of ODCs: The region will be able to maintain Other Duties and Charges (those which have a similar impact as a tariff on imports) during the first seven years of the agreement before phasing them out during the subsequent three-year-period. Development cooperation in Agriculture: The Agricultural chapter is consistent with the region s objectives for this sector: i.e. pursuing sustainable development, poverty eradication, enhanced competitiveness and food security. Trade defence measures & other safeguards: The EC agrees to exclude Cariforum exports from multilateral safeguard measures, such as those provided for in the WTO (Art. XIX of the GATT) and agrees to consider the use of constructive remedies, before imposing anti-dumping or countervailing duties in respect of products imported from Cariforum States. Specific Market access in Services: Access has been secured for Caribbean professionals to enter the EU to sell services as Contractual Service Suppliers and as Independent Professionals or self employed persons. The EPA also contains significant development-supporting provisions in Tourism and Cultural industries two areas which are particularly important for our region. Investment: public services, utilities and other sensitive sectors have not been liberalised to foreign investors - special reservations on small and medium enterprises in some sectors - provisions which obligate investors to safeguard the environment and maintain high labour, occupational health and safety standards anti-corruption. Trade Related Issues: - focus is on institutional strengthening and improving the competitiveness of economic operators. EPA implementation challenges Having completed the negotiations and signed the EPA, the Caribbean must now address the real challenges, those associated with implementation. Again there is a key role for the social partners because CARIFORUM Governments, Trade Unions and private sector economic operators must work together in order to: Undertake any necessary fiscal reforms; ensure required institutional strengthening; oversee the restructuring of economic activity away from declining to emerging industries; and make a commitment to improve our competitiveness in every sphere of activity. These are fundamental long term endeavours, which will require the social partners to adopt the objectives as their own and to work together to ensure the future prosperity of our region. It is not enough to prepare for and undertake international trade and development negotiations, because the tangible benefits flow from the implementation of those agreements. Therefore all three social partners must bring to bear on implementation the same level or greater of commitment, engagement and partnership, as was given to the negotiations. Some of the EPA implementation challenges, which could benefit from the general commitment and social dialogue of the tripartite partnership, include: 4

5 Overcoming the daunting EPA-related information deficit. Clearly, there is a need for more effective dissemination of reliable and actionable information on the agreement. Whereas a few regional academics have been vocal in their criticisms of the EPA, regional governments and their social partners have been reluctant to enter the debate and explain the potential benefits to be derived from the Agreement. I think there is a role for the social partners to be more proactive in organizing symposia and other forums through which more information can be disseminated about the EPA, particularly the opportunities that the region is not exploiting. Accelerating the establishment of oversight institutions: The EPA provides for the establishment of a number of institutions to ensure the proper oversight and implementation of the Agreement. The Joint CARIFORUM EU Council was established in Madrid in May 2010, but the other institutions are still to be set-up. The entire process has been placed on a go slow because the institutions, which are supposed to oversee the implementation have not yet been made operational. We are three years and five months after the completion of negotiations; two years and seven months after signature of the EPA; two years and four months after the start of provisional application of the Agreement and the critical oversight institutions still exists only on paper. Of course I can speak with the Minister and Permanent Secretary (Foreign Trade) about the need to get these institutions working. They understand the importance of the institutions and we are making an effort to move forward with our CARIFORUM colleagues. However, just imagine how much more urgency the Political Directorates would bring to this process if Trade Unions and Private Sector Organizations, in Barbados and across the region, were calling for these institutions to be established. I am of the view that, faced with such a concerted call from their Social Partners, Heads of Government and Trade Ministers, instead of saying: we have to try and establish those EPA institutions, would be moved to say: Let us have those EPA oversight institutions up and running before the end of June. In other words, your proactive involvement is likely to move the process from one of temporizing acknowledgement of something that should be done to an action-oriented commitment to do something tangible by a given date. What Committees are we discussing? The CARIFORUM-EC Trade and Development Committee, which is seen by many as critical because it is the body responsible for supervising the day-to-day implementation of the Agreement, has not yet been constituted despite several aborted attempts (It is now scheduled to meet here in Barbados on 9 th & 10 th of June). I hope that we are finally able to get this Committee up and running next month, but a number of other Committees remain dormant - the Special Committee on Customs Cooperation and Trade Facilitation - the CARIFORUM-EC Parliamentary Committee remains one for the future and CARIFORUM seems unable to agree on the composition of its representation on the Joint Consultative Committee, which is to promote dialogue and cooperation between civil society of the Parties (including academics, social and economic partners). This is the Committee specifically placed in the Agreement to facilitate your participation in that aspect of the implementation process. Aid-for-Trade promises remain unfulfilled: The EU Aid for Trade (AfT) facility, in theory, represents a potentially significant source of funding for EPA implementation projects. The EU AfT commitment envisaged increasing trade-related development support to 2 billion per year from 2010, half of that to be earmarked for EPA-related support in ACP countries, and the EPA text includes a declaration that CARIFORUM will benefit from an equitable share of EU Member States AfT commitments for EPA implementation. 5

6 A major area of disappointment for the region since the signing of the EPA has been the paucity of Aid-for-Trade (AfT) resources made available to the region because Aid-for-Trade funding was seen as an important contribution from EU Member States to reduce the demands on Regional and National Indicative Programmes. I am suggesting that this is another area where the Social Partners can be more than helpful. In this case, rather than mobilizing your constituents to pressure Caribbean Governments to become more proactive in taking necessary implementation actions, you can engage your counterparts in the EU, both private sector NGOs and Trade Unions to lobby their Governments to deliver on EPA-related promises. I believe your European counterparts would be receptive of a message which made the case that it would be better for their Governments in Europe to fulfill their EPA-related commitments, by providing modest support now to enable a group of progressive developing countries to help themselves rather than reneging on their promises and having to deal later with a series of economic basket cases. EPA Articles Specifically Addressing Work-related Issues: The EPA contains two sets of articles, which speak specifically to workers issues. In the chapter on Investment or Commercial Presence, articles 72 & 73 address investor behaviour as it relates to unethical actions and adherence to core labour standards. The chapter on Social Aspects, articles , reaffirms the obligations of the Parties as members of the ILO and their commitments under various ILO Declarations. In addition, article 196 provides for development cooperation support in areas such as the strengthening of labour legislation, measures to promote the Decent Work Agenda, skills training, and other capacity building activities. The onus is on you, the social partners, to develop suitable projects, which can benefit under the development cooperation framework outlined in that article. CARICOM-Canada Trade and Development Agreement The key principles and objectives relating to the region s decision to negotiate a Trade and Development Agreement with Canada are very similar to those, which were listed earlier with respect to the EPA negotiations. Therefore, I do not propose to repeat what I have already said. Furthermore, since the negotiations with Canada are ongoing and I have no mandate to report on them, I will limit my observations to two problem areas. In November 2009, the Member States of the Caribbean Community (CARICOM) and the Government of Canada commenced negotiations for a Trade and Development Agreement (TDA). In giving consideration to Canada s proposal to negotiate comprehensive provisions on Labour as part of the TDA, CARICOM Heads of Government mandated that the Region would not engage in negotiations on Side Agreements on Labour (and Environment). The Canadian Side has indicated that Labour (and environment) form part of the mandate of all bilateral trade negotiations in which Canada is involved and that its exclusion would put at risk Canada s ability to ratify the Trade Agreement. I believe this is an area of the negotiations with Canada where the other Social Partners should join with their Governments in fighting for the CARICOM position. Although the Canadian model for labour rights and principles seem basically the same as those to which CARICOM countries affirmed their commitment in other fora, there is one key difference. The Canadian model envisages that the full scope of the dispute settlement mechanism of the Agreement, including the imposition of monetary penalties, would apply to any violations. 6

7 CARICOM Member States have expressed strong concern at the dispute settlement provisions contained in the Canadian model text and reject the imposition of monetary penalties as being inappropriate and excessive. This impasse has led to the region convening a special Working Group on Labour two weeks ago in Barbados (May 3-4). I am pleased to note that the Social Partners are represented on that Working Group, which comprises Labour and Trade Officials from each Member State, the Caribbean Congress of Labour (CCL), the Caribbean Employers Confederation (CEC), the Caribbean Policy Development Centre (CPDC), the Organization of Eastern Caribbean States Secretariat (OECS) and the CARICOM Secretariat. CARICOM s position remains that if the region enters into a trade and development agreement with CANADA, which incorporates substantive labour provisions, it should not include dispute settlement procedures, which provide for trade sanctions and monetary penalties for breaches. Rather, it should incorporate capacity building, technical co-operation and trade facilitation. The other issue, which I wish to flag, is Alcoholic Beverages. CARICOM, which as you would imagine, has considerable interest in expanding its exports of rum to Canada and the region faces an uphill struggle in overcoming certain built-in Canadian barriers. CARICOM s negotiating mandate calls for National Treatment for the region s alcoholic beverages imported into Canada and the elimination of discriminatory measures such as blending requirements. I will not go into detail on this issue at this time, but I merely wish to signal that this is another area where the support of the Social Partners might be required. WIRSPA, as usual, is actively involved, but an even stronger lobby might be required. Functional cooperation between the Region s negotiators and the Social Partners The Social Partners can play an important role in international trade and investment negotiations by supporting the region s negotiating positions and, mindful of this reality, the negotiators should make provision for a structured interface with representatives of the private sector and the Trade Unions. A transparent negotiating process in which the Social Partners have the opportunity to discuss their concerns with the negotiators would make for a more effective arrangement than having the Social Partners feel excluded and consequently motivated to engage in protests or spreading false information, not necessary out of malevolence, but simply because they are not sufficiently well informed. Indeed, well-informed social partners can be an asset to CARICOM or CARIFORUM negotiators by taking various initiatives in support of the region s negotiating mandate when confronted by conflicting positions, which are inimical to their interests, from the other Party. In this context, the Social Partners can take their lobbying efforts to the press by writing articles, issuing press releases and making press statements in support of the positions being put forward by the region s negotiators. The region s Social Partners can also be effective in conveying CARICOM s message to civil society organizations in the other country. In effect, the Social Partners can become informal lobbyists, protestors or whatever might be necessary in order to help promote the interests and negotiating positions of the region. We also need to be wary of the other side of the coin because ill-informed or frustrated Social Partners, who feel excluded from the process, can convey the wrong impression, dilute the message of the region s negotiators, and become a negative rather than positive force. Therefore, you, the Social Partners must not forget that the region s negotiators usually share the same goals as you and are committed to securing the best result for our country or region. 7

8 Caribbean s Experience Fortunately, in the Caribbean, the regional Governments and the regional negotiators are committed to interfacing with the Social Partners and regard their involvement to be an integral part of the negotiating process. Therefore, at both the political and technical levels, CARIFORUM leaders have decided that it is advantageous to hear the concerns and views of the Social Partners when the region s positions on various issues are being developed. The periodic consultations between the negotiators and the Social Partners, not only enable the negotiators to appreciate better the concerns of the private sector and the Trade Unions, but also provide the opportunity for the negotiators to bring the civil society representatives up to date with the negotiations. Consequently, these exchanges are extremely valuable for both the non-state actors and the negotiators. Mechanisms to Enhance the Role of Social Partners in Trade Negotiations Some recommendations on actions to achieve a more effective participation by Social Partners in international trade negotiations, include: Support for capacity building: This is important because in small developing countries, such as those in our region, the institutional weakness of civil society organizations is particularly acute and could limit severely their ability to play a meaningful role in supporting the region s negotiators. The institutional shortcomings often manifest themselves in the lack of technical capacity to analyze trade or related data in order to determine the likely impact of proposals on the interests of the Social Partners. Initiatives to ensure transparent management: Social Partners must be properly organized and be seen as credible partners in the trade negotiating process and not just as agents provocateurs or proponents of chaos. In other words, we might wish to be wary of those groups, whose only philosophy seems to be creating mayhem, but can offer no constructive solutions. Establish structured arrangements for consultation: Effective consultation processes should be established to ensure that the Social Partners have the opportunity to consult with policy makers and negotiators on issues such as regional integration priorities, structural reforms, programmes to be supported or implemented by the region and the development of regional negotiating positions. During the EPA negotiations, the regional negotiators considered their outreach to non-state actors as an important aspect of their outreach activities as a whole, and these initiatives included: Collaboration: Convening joint Seminars/Workshops in partnership with NGOs and BSOs; Briefings: Members of the College of negotiators met regularly with representatives of the Social Partners to exchange views on various aspects of the negotiations; Dissemination of Information: The then CRNM, now the OTN regularly updated the Social Partners and other NGOs on developments in trade negotiations germane to the Caribbean, via its newsletter and direct communication; and 8

9 Participating in NGO Forums: Members of the College of Negotiators and CRNM staff participated, sometimes as featured speakers and sometimes as interested attendees, in a variety of NGO-sponsored forums. I am not as involved in the negotiations with Canada as I was with the EPA and I don t know whether these types of interactions currently take place. If they do, I hope that you are making full use of them. If they do not now take place, I suggest that you might wish to lobby for more of this kind of outreach. Ladies and gentlemen, the value of tripartite social partnerships has been demonstrated in a number of areas. I am convinced, and I hope you are as well, that there is a critical role for the Social Partners in helping Governments to prepare for, to undertake, and to implement international trade agreements. Be responsible, be responsive, be proactive. Thank you! Errol Humphrey is a Consultant on EPA implementation to the Foreign Trade Division, Ministry of Foreign Affairs and Foreign Trade in Barbados. He served as Vice-Dean of the CARIFORUM College of EPA negotiators and as the Ambassador of Barbados to Belgium and the European Communities from 2001 to He was also Barbados non-resident Ambassador to Austria, France, Germany, Luxembourg, and The Netherlands. 9