Removing trade barriers to support labour rights

Promoting respect for labour rights while boosting exports and trade from developing countries. It sounds like a good plan. But what exactly does this 'Generalised System of Preferences Plus' (GSP+) mean, and does it really work?

Under the Generalised System of Preferences (GSP), import tariffs on products from developing countries are reduced in comparison with traditional import tariffs, enabling access to the European market for these products (such as textiles and garments).

As part of a European programme  known as GSP+, some countries are offered further reduced tariffs under the condition that they comply with a set of labour and environmental conventions. GSP+ is believed to be effective in including social provisions in trade deals.

As the European Commission puts it, 'a regular dialogue with beneficiaries provides the necessary follow-up, which includes temporary withdrawal mechanisms.' ]

Factory fires

Is GSP+ successful in furthering respect for workers' rights?

Pakistan was included in GSP+ as of January 2014.

“Our country had already ratified 38 ILO Conventions”, says Nasir Mansoor of the Pakistani National Trade Union Federation (NTUF). “We also have comparatively good labour laws at the federal and provincial level. The laws are in the books, but on the ground the situation is bleak.” Over 95% of all Pakistani workers have no contract or other papers confirming their job at a certain factory. This is especially problematic when workers try to claim their rights after things have gone wrong. Also, workers generally do not have the financial means to claim their rights in the courts.

And just last month, Mansoor explains, there have been three more factory fires, putting the jobs and lives of workers at risk. “At one of those factories, KBI Textile Mills near Karachi, the situation was comparable with the one at Ali Enterprises. Windows were barred, and access to the site was difficult for the fire-fighters. Workers were lucky to have a narrow escape, as the fire broke out at the end of their shift.”

Complaints mechanism

Generally, Mansoor notes, there is no response from the government and manufacturers to respect labour rights, despite the GSP+ demands.  

But what about the follow-up mechanisms of GSP+ that the EU is referring to? Aren't the government and manufacturers held accountable for complying with the 27 conventions on workers' rights and other social issues?

“The EU should seek direct with the workers and the unions”, Mansoor says. “There should be a clear mechanism where we can report violations of GSP+ conditions, so that the EU can manufacturers and relevant government bodies, get their  points  of view and ask them to resolve the issues. Such a mechanism should be known to the victims. This could be ensured by organising consultation meetings with trade unions in different provinces.”

Fundamentalism

As GSP+ brings Pakistan millions of much-needed jobs and orders, Mansoor underlines that the importance of compliance with GSP+ obligations is not just economic. Continued non-compliance could result in repealing the tariff reductions.

“Higher import duties into the EU would mean that a lot of factories would be closed. Massive job losses would not only be a problem for those involved directly. Our society is vulnerable. Increased unemployment would only be fertile ground for fundamentalist forces to further disrupt our country.” The new orders coming in thanks to GSP+ are certainly having a positive effect, Mansoor says. “Hopefully it will also mean that with GSP+, workers have a new tool in their hands to secure their rights.”

Other countries included in GSP+ are Armenia, Bolivia, Cape Verde, Costa Rica, Ecuador, Georgia, Mongolia, Paraguay, Pakistan and Peru, joined by the Philippines as of January 2015.

Bangladesh

Across the Atlantic, the United States also has a Generalised System of Preferences (GSP) policy.

It is often used by US trade unions to pressure exporting governments to improve on labour rights (or, sometimes, to protect US jobs). The anti-union measures in Bangladesh have long been one of the reasons why the American union AFL-CIO has pressured the US government for the withdrawal of Bangladesh from the US GSP facility. Bangladesh was suspended from the US GSP in 2013.


Export Processing Zones

One of the concerns is that workers in so-called Export Processing Zones are still not afforded equal rights with workers in the rest of the country. These Export Processing Zones (EPZ) are areas set up by the government with a favourable tax and customs regime, intended to attract corporations and investors to set up business there. The zones are usually centred around main ports and industrial zones.

“These zones are excluded from labour laws”, explains Amirul Haque Amin of the National Garment Workers Federation (NGWF) in Bangladesh. “The government is also under pressure from investors from abroad, who threaten to withdraw their investment if labour laws were to be implemented in the EPZ.” Despite this, Amin does not think the repeal of Bangladesh's American GSP status is furthering the rights of Bangladeshi workers. “Trade barriers result in closing down factories and create more suffering”, he says.

 

For more info on EPZ problems, see for instance this well-researched article from Korean newspaper The Hankyoreh



Empowerment

The 4.2 million jobs in the Bangladeshi garment industry are vital in empowering workforces, especially from rural areas.

“Women who were a burden on their families can now earn their own money. They become self-sufficient. In their personal lives, they can take their own decisions. We therefore hope that the European GSP facilities for Bangladesh will continue”, Amin explains.
“It is honestly true that we are facing serious problems regarding trade union rights. Bangladesh has ratified many ILO conventions, but they are not implemented. For example, a worker can be fired without any reason. And before you can start a union, you already need to represent 30% of the workers of a factory, which only creates an artificial barrier for trade unions to be established. But cancellation of GSP and reinstating trade barriers will not help the workers, it only creates more problems for them.”

 

See also:

Statement on the GSP Action Plan, by the Office of the U.S. Trade Representative