Working people in the Americas believe that a just trading system is one that recognizes that basic labor standards and other measures for improving the welfare of working people cannot be left exclusively to markets. Any hemispheric agreement 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.
For a century, trade unions and other progressive forces have been campaigning at community, national and international levels for recognition of the need to respect and apply international labor standards. This recognition was one of the forces, together with the profound upheavals of 1917 in Russia and in the following months in a series of other European countries, which led to the creation in 1919 of the International Labor Organization (ILO). That institution that survives to this day as a UN agency that has the specific mandate of defining and monitoring international labor standards. All 35 countries of the Americas are members of the ILO and all ILO members are bound by the ILO Declaration on Fundamental Principles and Rights at Work, which covers the eight core conventions.
Some of the current trade agreements in the hemisphere have adopted specific agreements stating that fundamental principles regarding labor conditions should be respected within all member countries and that the agreements should contribute to a general improvement of the living standards of workers. Such is the case, for example, with the NAFTA side-agreement on labor, officially called the North American Agreement on Labor Cooperation (NAALC) and with the Mercosur' Declaration on Social and Labor issues. 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. Eight years after the introduction of NAFTA , Mexican real wages were lower than prior to the agreement, despite the fact that worker productivity was substantially higher. The specific provisions on labor standards, such as NAFTA's NAALC, tend to be strong on principles but weak on any specific mechanisms that can have a favorable impact on working people.
Moreover, it is a recognized fact that even the most basic labor 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. Governments often turn a blind eye to these violations, believing that such behavior ensures that foreign investment will keep coming their way. For example, much of the recent growth of industrial employment in Mexico, Central America and the Caribbean has taken place in maquiladora or export processing zones that openly feature restrictions on the right to organize and other violations of labor rights in order to guarantee a supply of low-cost labor. 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 fundamental labor rights. Unless concrete steps are taken to ensure respect for and improvements in labor rights, economic liberalization fostered through free trade agreements will continue to drive down labor standards and job security throughout the hemisphere.
Since the early 1990s, the international labor movement - led in the Americas by ORIT (Inter- American Regional Workers' Organization) and other union forces -- has promoted the inclusion in international trade agreements of a "Workers' Rights Clause" that would force employers and governments to confront the frequent and repeated violation of fundamental workers' rights. During the negotiation of NAFTA and its parallel agreement on labor, these unions and civil-society networks in North America rejected the limited nature of that agreement, particularly due to the fact that it did not contain an effective mechanism to guarantee respect for and promotion of basic rights or the possibility of sanctions when that was not the case. Since then, these groups have come to agree that it is not enough to add a labor or social clause to a bad agreement. These groups, together with other sectors of civil society, have advanced numerous proposals to radically reorient the nature and orientation of what was being negotiated in each of the substantive chapters of NAFTA. The years of experience under NAFTA and its parallel agreement on labor issues, as well as the Mercosur Declaration on Social and Labor Issues, have affirmed this evaluation and have taught that the problem was not just the limited nature of the workers' rights clauses in such accords, but rather in the very orientation of the free-trade agreements. Therefore, the Hemispheric Social Alliance, the labor movement and other sectors of society have taken one more step toward integrating the workers' rights clause within a global proposal that refuses to ratify the market as the supreme law, and moreover, they seek to develop a compliance mechanism that truly makes the workers' rights clause effective.
Effective safeguards for fundamental worker rights will not be ensured without substantial changes in the dominant orientation of globalization. Free trade and the elevation of purely mercantilistic criteria above all others are incompatible with the protection of not only labor but also human rights considered integrally: economic and social; environmental; cultural and peoples' rights, including the right to development. But, at the same time, a new logic for the world economy and the agreements that regulate it also requires an explicit and agreed upon mechanism to ensure respect for and promotion of basic labor and social rights. Our proposed clause for any economic, financial or trade agreement in the Americas could result in the application of sanctions that could result in the loss of privileges accorded by the trade agreement if fundamental workers' rights are not respected and the national agencies and ILO recommendations and assistance have not changed that situation.
The fundamental rights were defined in the 1998 ILO Declaration on Fundamental Principles and Rights at Work and are covered by eight core conventions of the ILO, namely:
The 1998 ILO Declaration binds all member countries, whether or not they have ratified the eight conventions on which it is based. However, the rights to freedom of association and collective bargaining are routinely violated by a vast number of countries in the hemisphere, and child labor is endemic in several countries, as is workplace discrimination against women and specific racial or ethnic groups.
For these reasons, we propose that the eight fundamental ILO workers rights conventions described above be included in any economic-financial or trade agreement in the hemisphere and that compliance changes from being a moral and voluntary obligation to an obligation subject to enforcement mechanisms that could result in sanctions. This means that employers and governments would be obliged to respect these conventions as a condition of access to the benefits of the agreement.
Naturally, such a workers' rights provision would be effective only to the extent that nothing else in the economic-financial agreements in the hemisphere weakens the ability of nation-states to enforce worker rights and that it is accompanied by monitoring and effective international enforcement mechanisms. This monitoring and enforcement mechanism should imply gradual steps that would result in sanctions in extreme cases.
a) We propose that the monitoring function be delegated to the ILO, whose expertise in the field of monitoring the application of international labor standards is universally recognized.
The ILO would, as a first step, be used to receive and investigate complaints under the worker rights clause in the Americas. However, the current ILO complaints procedures are not efficient, in that they are not able to rapidly receive and process these complaints. They must be improved to achieve greater agility and efficacy. Unions and other nongovernmental organizations should be able to present a complaint and request a swift review process by the ILO when fundamental rights contained in the core conventions are violated. The second step would be for the ILO to promptly carry out an investigation to verify if the conventions have been violated or not. In cases where the conventions are confirmed to have been violated, the ILO would, at a third stage, formulate recommendations to the country to assist it in complying with the conventions that have not been respected.
b) In those cases in which the procedure described above does not achieve the expected results and the violations are serious and repeated, we believe that a mechanism should be established to apply sanctions. Any sanctions mechanism should operate in a public and open manner, with suitable representation of workers. The mechanism should only enter into force when its intervention is expressly requested by organizations representing the workers whose rights have been violated, and when other opportunities for the violating government or company to accept technical and financial assistance to remedy the problem have not been successful. Affected workers should also have the right to participate in decisions on the size, nature and duration of any sanction authorized by that mechanism. It should provide for the possibility of directly sanctioning companies, not only governments, and the sanctions applied should correspond to the gravity of the violations and last until the violations cease.
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 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. For this reason it is important that any agreement on trade and investment include mechanisms to allow national economies to adjust to the impacts of increased competition through the creation of high quality jobs, with special allocations for women.
These mechanisms should consist of:
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, particular regions within countries. Specific funds would be provided for adjustment programs 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 EU 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 the EU), or through a specific financing mechanism such as a Tobin Tax (i.e., a tax on international financial transactions) applied in the Americas.
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 EU in terms of income maintenance for unemployed men and women. In other countries, universal state pension schemes are being privatized or otherwise eroded, and in most cases do not cover the growing number of informal-sector workers. This has the effect of penalizing all retired workers, but especially women, who participate in lower proportions in the jobs covered by social security.
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 income-support programs should therefore be included in the agreement, including unemployment insurance, compensation for injured workers, and pensions for retired workers (whether they were formal sector workers or not) that in no case should be less than what is need to cover minimum living standards as defined internationally. Similar targets for basic social programs such as health care, education and childcare would also be established. 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.
Over and above the inclusion of a workers' rights clause and appropriate adjustment mechanisms, we believe that any economic integration process among our countries must include mechanisms for improving basic labor standards and social programs so that the agreement contributes to improvements in 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, but internationally defined minimum living standards should be covered by each country's minimum wage.
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 in these areas and making them obligatory, and, over the medium term, 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.
Hemispheric economic integration can be expected to make capital even more mobile than it already is and, subsequently, lead to greater employment instability. Any hemispheric agreement should provide for protection of workers against increasing job instability, especially with respect to employers who may seek to avoid their obligations 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 labor would also be put in place.
Furthermore, the effects of free trade on women are disturbing. In the Americas, women often work in poorly paid jobs, with appalling working conditions (impossible schedules, mandatory overtime, bonus work, production quotas that are sky-high, deficient health and safety conditions, lay-offs without notice, among others). Inside the maquiladoras (assembly plants), women's most basic rights are ignored. They are subjected to pregnancy tests and sexual harassment, and often fired when found to be pregnant. Miserable working conditions, job insecurity and unemployment have forced many women to find work in the informal sector. As most women are responsible for educating their children, for providing care to family members (sick or aging people) and for domestic work, the reduction in the State's role in social policy, combined with the degradation of public services, has greatly impeded the achievement of a balance between work and family. Together, these factors have produced a generalized impoverishment of women and a noticeable deterioration of their living conditions. (Please see chapter on Gender for additional detail).
Any international agreement should acknowledge the needs of women, notably by giving official recognition to the core convention of the ILO on equal pay for work of equal value and also the convention on the prevention of discrimination in the workplace (Conventions 100 and 111). Any hemispheric agreement should also require participating governments to implement social programs (such as daycare, flexible work schedule, strict limits on overtime) that improve the work-family balance or that enable women to undertake waged work if they wish to do so Governments must periodically analyse the impact of trade liberalization on women and track the impact of trade agreements and policies on the formal, informal and unwaged sectors, through sex-desegregated data gathering.
Any future hemispheric agreement must recognize the dramatic growth of the informal sector and develop mechanisms to extend minimum labor rights and standards to workers in this sector. The latter would include ratification, implementation and enforcement, by governments of the Americas, of ILO Conventions 177 on home work and 175 on part-time work.
Finally, the agreement must ensure access to labor rights for migrant workers wherever they are working. (Please see chapter on Immigration for additional detail.)