Working Beyond the Border: European Union Trade Agreements and International Labour Standards

Lead Research Organisation: Queen Mary, University of London
Department Name: Geography

Abstract

Recent high profile incidents such as the collapse of the Rana Plaza Building in Bangladesh demonstrate the need for workers' rights to be better protected and enhanced across the globe. Sustainable development clauses in international trade agreements provide one important mechanism by which major trading blocs, such as the European Union, are attempting to do this.

This project investigates this commitment of the EU to improve labour standards beyond its borders. It focuses on the EU pledge "to put more of its commercial weight behind efforts to promote social standards and decent work in bilateral and multilateral trade negotiations", which has been trumpeted in the labour standards provisions contained in "new generation" free trade agreements (FTAs) as a key policy mechanism for promoting labour standards in third countries. This project investigates the impact of these new FTAs on workers in third countries.

Since the 2011 free trade agreement with South Korea, all new EU FTAs contain a specific chapter on 'Trade and Sustainable Development', with commitments to respect core labour standards (freedom of association, eliminating forced labour and abolishing child labour). They also contain institutional mechanisms to monitor and review compliance with those standards including a joint committee of representatives of the two parties to the agreement, an independent body of experts to handle complaints, and a civil society review mechanism.

This model is novel and innovative. It is not a 'hard law' mechanism where sanctions are used to force compliance. Nor is it a 'soft' law mechanism (like Fair Trade) because states are making commitments to take action, and their performance is monitored and reviewed. Consequently, research into existing mechanisms for protecting labour standards is not helpful in understanding how effective the EU's new model is. There is also no existing research which directly investigates what the impact of this new model is on workers in countries that have signed a 'new generation' FTA with the EU; an absence noted by international agencies. This research project therefore fills this important gap.

We will examine three countries that have recently signed such agreements with the EU (South Korea, Moldova and Guyana), to investigate:
(1) the negotiating process for each agreement, and whether these processes have helped domestic coalitions in each country to push for better protection of labour standards;
(2) what is happening in the institutional mechanisms created by the trade agreements and the extent to which key labour standards issues are raised and dealt with;
(3) key export sectors in each country (automobiles, clothing and sugar respectively) to examine what the impact of the negotiating processes and institutional mechanisms in the trade agreements are in the factories and fields of third countries;

Vitally important to this project is the recognition that labour standards provisions in FTAs may have very different effects on workers' lives in third countries depending on a number of factors, including:
(1) How powerful each trading partner is and how this effects the EU's ability to influence its policies and practices;
(2) The geo-political context in which each agreement is implemented (a free standing trade agreement (South Korea), part of a wider economic partnership agreement (Guyana), or as part of much deeper economic integration (Moldova); and
(3) How different economic sectors are affected, hence our research will look at three different industries; capital-intensive manufacturing (automobiles); labour-intensive manufacturing (clothing) and agricultural production and processing (sugar).

Evaluation of this 'new generation' model will be a vital source of evidence to inform the work of international organisations such as the European Commission, the ILO, and trade union/NGO groups over FTA implementation and negotiations.

Planned Impact

The majority of the general public, as well as many politicians and a wide range of civil society actors in the EU and in third countries are concerned that trade liberalisation is leading to a 'race to the bottom' and that globalization provides opportunities for economic growth but increases social inequalities and is profitable only for large companies, not for citizens. The European Commission has identified labour standards provisions in EU trade agreements as a key mechanism for ensuring that such agreements create economic growth in a way that promotes decent work for workers inside and outside the EU.

This research project will therefore provide vital evidence about the effectiveness of the 'new generation' model of labour standards protection and will help to inform policy making communities in this area and to enhance the capacity of international organisations such as the ILO in their efforts to monitor labour standards implementation.

Key beneficiary groups and the main benefits to each group are as follows:
(1) Officials from the European Commission who are involved in the negotiation of trade agreements with third countries. Benefits: (a) Findings about the efficacy of existing mechanisms to protect and promote labour standards, and (b) recommendations for how such mechanisms can be enhanced in the future which will inform ongoing trade negotiations.
(2) National policy-makers from the UK and other EU member states and other key EU actors (e.g. the European Parliament and European industry associations) with the power to influence future negotiating positions of the EU and to push for amendments to future labour provisions in trade agreements. Benefits: analysis of the strengths and weaknesses of the current 'new generation' model and recommendations for how the model can be enhanced for the future.
(3) Third country policy-makers who are negotiating trade agreements with the EU. Benefits: As (2) above.
(4) Policy-makers from other countries who are developing their own labour standards provisions in trade agreements with third countries and who are copying (elements of) the EU model (e.g. Switzerland). Benefits: As (2) above.
(5) Actors who are participating in the institutional mechanisms set up by the Sustainable Development Chapters of the EU's 'new generation' FTAs (business representatives, trade union actors, civil society actors and government officials). Benefits: Findings in relation to the functioning of the institutional mechanisms which will inform participants about how best to engage with those mechanisms in the future, and where to call for reforms.
(6) Civil society and trade union groups working on the promotion and protection of labour standards. Benefits: Empirical evidence of the effectiveness of the 'new generation' model and recommendations for enhancement will inform lobbying strategies of these organisations.
(7) International Organisations developing methodologies for studying the impact of bilateral and regional trade agreements on workers' lives. Benefits: The development of new methodologies for studying the 'promotional' model of labour standards protection which are found in an increasing number of trade agreements signed by the EU and a range of other countries across the globe.
(8) Public understanding of FTAs. Benefits: Vital evidence to inform public debate about whether labour standards provisions in EU trade agreements are working to ensure that trade liberalisation creates economic growth in a way that promotes decent work for workers inside and outside the EU.
 
Description First, we have conducted the first, comparative, qualitative analysis of the negotiation and implementation of the labour provisions - which are emerging as a new resource for global labour governance - contained in European Union free trade agreements. Until now, existing studies have focused on either single case studies or quantitative analysis of relationships between trade and labour. Our study has, by contrast, been able to unearth the social and political dynamics at work in understanding how the labour provisions have taken the form they have and how they have been implemented with varying effects on the governance of labour conditions in trade partner countries.
Second, we have found that the ability of the EU's labour provisions to have meaningful impact on working conditions and labour relations in trade partner countries is significantly constrained by the design and "promotional" approach taken by the European Commission. In the absence of establishing mechanisms with stronger legal purchase, the implementation of the provisions establishes a model based on discussion and negotiation between social partners. While this framework may work in the context of the EU, we have found it wanting in trade partner countries with very different civil society configurations and, often, more antagonistic labour relations.
Third, we have found that a major constraint on the ability of labour provisions to operate effectively in trade partner country contexts are the commercial constraints operating in global value chains integrated into major export markets. For example, in the Moldovan case we found the supplier firms were under considerable commercial pressure to constrain wage growth and intensify working conditions, leading to significant problems over working conditions in the local labour regime. In Korea, we found that there are important parts of key value chains in the automotive sector where the labour provisions fail to reach and that the European Commission has repeatedly failed to address public requests to deal with systematic labour abuses, despite being able to do so via its labour provisions. In Guyana, we found that trade-related restructuring and economic decline in the sugar sector are not dealt with in the trade agreement and that industrial relations are highly politicised and not amenable to appeals to social dialogue, which characterises the approach of the agreement.
Fourth, we have fed new research findings into the debate taking place over possible reform to the Trade and Sustainable Development approach of the EU. This has involved a deep engagement with European Parliamentary, trade union and NGO communities, allowing our research to shape the strategies to reform taken by these groups.
Exploitation Route One of the features of this project has been the impact that the findings have had in informing debates over possible reform to the European Union's trade and sustainable development approach. The research has been taken up already by key actors in the European Parliament, the NGO community and the wider trade union movement to help to inform their positions in this debate. We would expect this impact to be taken forward as the debate develops and as the European Commission formulates more concrete proposals for reform. Equally, within the context of the UK's exit from the European Union how potentially "independent" trade policy developed by the UK government incorporates labour provisions will continue to be a key public policy issue.
Sectors Financial Services, and Management Consultancy,Government, Democracy and Justice,Manufacturing, including Industrial Biotechology

URL http://www.geog.qmul.ac.uk/research/research-projects/beyondtheborder/
 
Description The research has involved extensive engagement with international institutions such as the European Parliament, International Labour Organisation, the European Trade Union Institute and European/international trade unions and NGO groups over analysis of and reporting on labour standards dimensions in free trade agreements. These collaborations are on-going.
First Year Of Impact 2015
Sector Other
Impact Types Policy & public services

 
Description Input into Transatlantic Trade & Investment Partnership labour standards formulation
Geographic Reach Multiple continents/international 
Policy Influence Type Participation in a advisory committee
 
Description Invited assessment of, and written contribution to, ILO publication
Geographic Reach Multiple continents/international 
Policy Influence Type Membership of a guideline committee
 
Description Review of European Trade Union Institute report
Geographic Reach Multiple continents/international 
Policy Influence Type Membership of a guideline committee
 
Description Review of draft International Labour Organisation report
Geographic Reach Multiple continents/international 
Policy Influence Type Participation in a advisory committee
 
Description Conference presentation (European Urban and Regional Studies) 
Form Of Engagement Activity A talk or presentation
Part Of Official Scheme? No
Geographic Reach International
Primary Audience Other audiences
Results and Impact Presentation of "Towards responsible global trade? Global value chains and labour standards in the European Union free trade agreements"
Year(s) Of Engagement Activity 2016
 
Description Early career workshop presentation (2016) 
Form Of Engagement Activity Participation in an activity, workshop or similar
Part Of Official Scheme? No
Geographic Reach International
Primary Audience Other audiences
Results and Impact Presentation to workshop of early career researchers working on global production networks
Year(s) Of Engagement Activity 2016
 
Description International Initiative for the Promotion of Political Economy (IIPPE) conference presentation (2016) 
Form Of Engagement Activity Participation in an activity, workshop or similar
Part Of Official Scheme? No
Geographic Reach International
Primary Audience Other audiences
Results and Impact Conference presentation to International Initiative for the Promotion of Political Economy (IIPPE).
Year(s) Of Engagement Activity 2015
 
Description Invitation to research dissemination meeting at European Commission 
Form Of Engagement Activity A formal working group, expert panel or dialogue
Part Of Official Scheme? No
Geographic Reach International
Primary Audience Policymakers/politicians
Results and Impact Adrian Smith and James Harrison were invited to present research findings to the European Commission group responsible for Trade and Sustainable Development chapters in EU free trade agreeements
Year(s) Of Engagement Activity 2017
 
Description Invited presentation to European Parliament 
Form Of Engagement Activity A talk or presentation
Part Of Official Scheme? No
Geographic Reach International
Primary Audience Policymakers/politicians
Results and Impact Adrian Smith was invited to present research findings to the European Parliament
Year(s) Of Engagement Activity 2017
 
Description Presentation (ILO & European Commission workshop) 
Form Of Engagement Activity A formal working group, expert panel or dialogue
Part Of Official Scheme? No
Geographic Reach International
Primary Audience Policymakers/politicians
Results and Impact Presentation of 'Labour provisions in the European Union-Republic of Moldova Association Agreement', International Labour Organisation seminar on Labour Provisions in Trade Agreements: Design, Implementation and Stakeholder Involvement, European Economic and Social Committee, Brussels, December
Year(s) Of Engagement Activity 2016
URL http://ec.europa.eu/social/main.jsp?langId=en&catId=88&eventsId=1181&furtherEvents=yes
 
Description Presentation to European Union Trade Union Institute and European Trade Union Confederation workshop on "Can trade and investment agreements promote decent work?" 
Form Of Engagement Activity A talk or presentation
Part Of Official Scheme? No
Geographic Reach International
Primary Audience Policymakers/politicians
Results and Impact Adrian Smith presented the primary research findings to an ETUI/ETUC meeting on social standards in trade agreements
Year(s) Of Engagement Activity 2017
 
Description Workshop on The Future of Trade and Sustainable Development (TSD) Chapters in EU Trade Agreements (FTAs): Perspectives from Labour Voices in Trade Partner Countries 
Form Of Engagement Activity Participation in an activity, workshop or similar
Part Of Official Scheme? No
Geographic Reach International
Primary Audience Third sector organisations
Results and Impact A dissemination workshop was held with trade union representatives from EU trade partner countries and a public event was held to discuss the reach of EU labour provisions into trade partner countries
Year(s) Of Engagement Activity 2017
 
Description Workshop presentation (Brussels) 
Form Of Engagement Activity A talk or presentation
Part Of Official Scheme? No
Geographic Reach International
Primary Audience Professional Practitioners
Results and Impact Presentation of "Governing labour standards through the European Union's trade agreements: civil society and the limits of dialogue and cooperative engagement"
Year(s) Of Engagement Activity 2016
URL http://giftaproject.org/wp-content/uploads/2016/06/ESRC-GIFTA-project-workshop-5-of-6-final.pdf
 
Description Yonsei University presentation (2016) 
Form Of Engagement Activity Participation in an activity, workshop or similar
Part Of Official Scheme? No
Geographic Reach International
Primary Audience Other audiences
Results and Impact To be added.
Year(s) Of Engagement Activity 2016