Labour: The spread of bilateral trade agreements

INTERNATIONAL CONFEDERATION OF FREE TRADE UNIONS (ICFTU)

DRAFT - 06-2004

The Spread of Bilateral and Regional Trade Agreements

Introduction: Bilateralism, Regionalism and Multilateralism

The number of both bilateral and regional trade agreements is growing.

Almost all trading nations are pursuing bilateral and/or regional agreements at the
same time as they are following multilateral agendas.

While some of these new agreements will supersede agreements already in
place, many of these new agreements include countries participating in such
arrangements for the first time, indicating a growing number of countries engaged in
such trade agreements. Also, many regional groupings are expanding and bringing in
new members.

Most WTO members are also party to one or more regional trade agreements.

Since the early 1990s some 250 Regional Trade Agreements (RTAs) have been
notified to the GATT/WTO up to December 2002, of which 130 were notified after
January 1995. Over 170 RTAs are currently in force; an additional 70 are estimated to
be operational although not yet notified. By the end of 2005, if RTAs reportedly
planned or already under negotiation are concluded, the total number of RTAs in
force might well approach 300 [1].

There is debate about the extent to which regional or bilateral agreements are
complementary to multilateral agreements, or are either a risk or a distraction to
multilateralism. Either way, the number of regional and bilateral agreements is
growing. Most of the world’s major trading nations are already party to such
agreements, and actively engaged in negotiating further agreements.

While the speed at which such agreements are being negotiated, and the
priority different nations place on bilateral and regional agreements vis-à-vis the
WTO, varies from one agreement to another, most seem to be affected by the situation
at the WTO, and the speed with which multilateral trade liberalisation efforts seem to
be progressing. This is evident from the relatively lower profile given to bilateral and
regional activities in the months after the Doha ministerial, when multilateral trade
negotiations came to the fore once more. Since the failure of progress in Cancún in
September 2003, this has been changing and a rapidly increasing number of regional
and bilateral agreements is being negotiated lately. Both key players, the EU and the
US are undertaking regional and bilateral trade negotiations at the moment, and the
US Trade Representative Zoellick announced after Cancún, that the US would
conclude more bilateral trade deals.

Whether a complement or a distraction to multilateralism, virtually all trading
nations appear to be pursuing bilateral and/or regional, and multilateral agendas at the
same time. It is by no means only the Quad, or even OECD, countries that are now
engaging in bilateral or regional trade agreements, although many such agreements
still include at least one Quad or OECD country. Regional agreements exclusive to
developing countries are increasing, as are developing country bilateral trade
agreements.

The scope of bilateral and regional agreements vary, although the majority are
classified by the WTO as Free Trade Agreements (FTA), meaning that reciprocal
trade preferences between two or more countries cover a large spectrum of the
countries’ trade in goods. Much fewer are Customs Unions (CU), whereby trade
preferences between countries are combined with a common external tariff for
products imported from countries not party to the agreement. There are also numerous
asymmetric relationships, whereby not all the countries party to an agreement make
the same concessions, or have different flexibility criteria or transitions periods
regarding reciprocal concessions.
Trade agreements generally no longer restrict themselves to issues of tariffs
and trade in goods. Just as the WTO was greatly expanded relative to the GATT in
terms of its scope, many bilateral and regional agreements (both already agreed and
currently being negotiated) include the usual broader list of trade-related issues: trade
in services, investment, intellectual property, trade facilitation, competition, and so
on. Furthermore, many trade agreements now being concluded are elements of
broader political, social and economic association agreements. Agreements of this
type are frequently concluded between developed and developing countries, and can
serve as a framework for development assistance. These often provide for cooperation
in various ways and on various themes, sometimes including labour issues.

Trade unions in a number of countries have become more active in recent
years in following their government’s negotiations of trade agreements, and in
pressuring their government to include provisions safeguarding workers’ rights in
those agreements. As a result, there are several examples of trade agreements treating
workers’ rights in various different ways. However, there are far more examples of
trade agreements that make no mention of workers’ rights.

Trade union pressure to include labour considerations in trade agreements has
most often been successful where the trade provisions were a component of a broader
association agreement as mentioned above, rather than where the agreement is more
specifically trade-oriented.

This report looks at major Customs Unions, Free Trade Areas, and economic
association agreements around the world, with particular attention to any clauses
covering social issues, core labour standards and trade union participation.

- The European Union (EU) - Austria, Belgium, Denmark, Finland, France, Germany,
Greece, Italy, Ireland, Luxembourg, Netherlands, Portugal, Spain, Sweden, the UK,
and the newly acceded members Cyprus, Czech Republic, Estonia, Hungary, Latvia,
Lithuania, Malta, Poland, Slovakia, Slovenia, - entry into force of founding treaty
1957

The European Union (EU) is one of the earliest and best developed examples
of a trade agreement, although because of its broad scope and high profile political
implications, it does not always come to mind when considering trade agreements.
The EU began in the 1950’s as a coal and steel trade agreement and has grown in both
size and scope since then. The EU is now defined as a customs union, and has
essentially a single market in goods and services. There is free movement of workers
within the EU, and there is a “Social Chapter”, which specifies fundamental workers’
rights that are to be respected across the EU.

There is a large body of law at the EU level, as well as a number of permanent
institutions. Trade Unions in Europe have joined to form the European Trade Union
Confederation (ETUC), which represents workers’ interests at EU level. There are
legal provisions that mandate consultation by workers and their representatives,
including at company level and EU level in the tripartite Economic and Social
Committee. This is an institution consisting of workers’, employers’ and NGO
representatives from across the EU, which has the right to consultation on all
European law. Laws have mandated the constitution of European Works Councils,
whereby all large companies employing more than 1,000 employees and operating in
more than one EU country have to facilitate the interaction of workers from different
plants in different EU countries, to provide certain information to workers’
representatives, and to involve them in certain company decision-making.

The decision-making procedure in the EU is such that some laws are subject to
consensus among the 25 member states, and others are subject to a form of majority
voting. Some countries have retained the right to opt out of certain agreements, such
that some EU laws, including the social chapter and laws on European Works
Councils, are not binding across the EU.
Notwithstanding these exceptions, the EU is probably the best example of the
integration of social considerations, including workers’ rights, with the economic
considerations of a trade agreement. In fact the origins of the EU are arguably as
much social as economic, since economic integration was sought as a means of
securing peace and social equality in the post-World War Two period.

The relative priority given in the EU to social considerations is maintained to a
certain extent in agreements between the EU and other countries or other groups of
countries. Most association agreements do contain paragraphs saying that all Parties
will respect human rights. This case should not be overstated, however, as there
remain examples of trade agreements between the EU and other countries, such as
Mexico, where there are no provisions to promote or protect labour standards. There
is much scope for EU negotiators to include more far-reaching clauses concerning
social development and workers’ rights in their bilateral and regional agreements.
The EU has approximately 30 agreements or ongoing negotiations with countries
regarding trade liberalisation. Many of these are broader than just trade liberalisation,
even in its broadest form, and include provisions for social and development cooperation.

- European Union (EU) - Mexico Agreement - entry into force 2000

This agreement is aimed at a free market in goods and services, the opening of
government procurement, and regulation governing both competition and intellectual
property. It takes democratic principles and the respect for human rights as essential
elements of the agreement, but it does not mention trade unions or workers’ rights.
This is notwithstanding pressure by the ETUC, ICFTU and others on the EU trade
negotiators to include these trade union priorities.

- EU - ACP: Cotonou Convention and Regional Economic Partnership Agreements
(EPA’s) - entry into force 2000

The Cotonou Convention, which is itself the descendent of a series of Lomé
Conventions, brings together the EU and 77 states of Africa, the Caribbean and the
Pacific (ACP). Signed on 23 June 2000 in Cotonou, Benin, the agreement will
determine the ACP-EU relationship at least until 2020. The new partnership
agreement builds on the expired Lomé Conventions I-IV, which go back to 1975 and
provided for development cooperation and for trade preferences for the former
colonies of EC member states. The Cotonou Convention is far broader than simply a
trade agreement, and in it, trade is very clearly an element of a development
assistance framework. The trade provisions in the Cotonou Convention are not
reciprocal, and provide for preferential access to the EU market for the members of
the ACP.

The Cotonou Convention provides for joint parliamentary and civil society
forums, as well as study of the implementation of the agreement by meetings of EU
and ACP social partners and other groups. The agreement’s essential elements include
respect for basic social rights, and specific procedures to be followed in the event that
any party fails to fulfil these obligations. These procedures have been enacted on
several occasions, in recent years involving flagrant breaches of democracy in Fiji and
Zimbabwe.

The trade provisions of the current Cotonou Convention include article 50 on
Trade and Labour Standards, in which the parties reaffirm the commitment to the
ILO’s core conventions [2], and agree to enhance co-operation on how to support these
conventions and enforce national legislation. The Parties also agree to undertake
educational and awareness raising programmes. The Parties agree that labour
standards should not be used for protectionist trade purposes. It is not clear whether
this will be maintained as it is in the Cotonou Convention or whether it will be subject
to partial renegotiation in the new trade agreements.

The non-reciprocal trade relationship has been granted a waiver by the WTO
which will expire in 2008. As a result, the trade provisions will be renegotiated
between 2002 and 2008, in the Economic Partnership Agreements (EPAs) which will
take forms of free trade areas and which may differ between ACP countries and
regions but will all be according to WTO rules. From 2008 on, these free trade
agreements will be implemented up to 2020. The EPA shall include specific
assistance for ACP countries that have to undergo structural adjustments in order to
implement the EPA. ACP countries can conclude EPAs with the EU either
individually or according to their own regional integration schemes.

- EU - Chile Agreement - concluded in 2002

The EU - Chile agreement is very broad in its scope, including provisions on
services, investment, government procurement, competition, intellectual property and
dispute settlement. Its premises include democracy and respect for human rights and
the rule of law, although it is not clear what mechanisms are envisaged to enforce
these essential elements.

In terms of social dimensions, this agreement includes article 44 (Social Cooperation),
which recognises the importance of social development, and the
fundamental role the ILO’s conventions play in this. There is no explicit mention of
trade unions, nor any direct connection between this social co-operation and the trade
section, such that the agreement would ensure that trade improve social and labour
conditions and not the opposite.

- EFTA - European Free Trade Area - Iceland, Liechtenstein, Norway, Switzerland -
established 1959

This is a four country free trade area that provides for a single market in
industrial goods and some other goods and services. Similar to the EU’s Economic
and Social Committee, EFTA has a Consultative Committee with an institutional role
to play in EFTA policy on employment and social affairs as well as other economic
and political topics.

EFTA also has trade agreements with 29 countries outside the EU (of which 8
of the newly acceded countries), among which Turkey, Morocco, Singapore, Mexico,
Mercosur and Chile.

Iceland, Liechtenstein and Norway are also part of the European Economic
Area, which aims at the free movement of goods, services, capital and persons.

- Baltic Free Trade Area (BAFTA) - Estonia, Latvia, Lithuania - established 1993

The objectives of the Free Trade Agreement are the creation of a free trade
area for agriculture, food and fish products between the three countries, the promotion
of a harmonious development of economic relations, and the provision of fair
conditions for competition. There is no reference to workers’ rights or trade unions.

- Central European Free Trade Agreement (CEFTA) - Bulgaria, Czech Republic,
Hungary, Poland, Romania, Slovenia- established 1992

The aim of the agreement was the gradual introduction of a free trade area by
its members during the transition period. The objectives of the agreement are to
harmonise the development of economic relations among signatories through
expansion of trade, to speed up the development of the commercial activities of the
signatories, to raise standards of living, and to ensure better employment
opportunities, increased productivity and financial stability. Another objective of the
agreement is to ensure fair trade between members and, through the removal of trade
barriers, to contribute to the balanced development and expansion of world trade.
There is no reference to workers’ rights or trade unions.

- North American Free Trade Agreement (NAFTA) (Mexico, USA, Canada) and North
American Agreement on Labour Co-operation (NAALC) - came into force 1994

NAFTA is a wide ranging free trade agreement that covers trade in goods and
services, intellectual property, investment, government procurement, free movement
of business people, competition, and a dispute settlement mechanism. Perhaps its
most notable and distinguishing feature is that as concerns investment, and the right of
entry of investors from one party to NAFTA into another party. There is a mechanism
whereby the investor can claim damages from a sovereign party for infringement of
its rights under NAFTA, which is known as investor to state dispute settlement.

In NAFTA, this investor to state mechanism, often referred to as Chapter 11,
which is the investment chapter of NAFTA, has produced some examples of the
priority investors’ rights have over public health or environmental protections.
Investors have filed claims for over 13 billion US$ in damages under chapter 11 of
NAFTA. Damages have been awarded, for example, when one of the governments
party to NAFTA banned certain products for environmental reasons, or maintained
zoning laws for environmental reasons.

The preamble of the NAALC (the Commission for Labour Cooperation, which
was established under NAFTA) affirms the importance of improving labour and living
standards, and the agreement outlines the various areas in which the parties will cooperate
to bring this improvement about. The agreement refers only to domestic
labour law, and requires parties to ensure that their domestic law provides for high
labour standards, without in any way defining this. The agreement does require parties
to provide grievance procedures for actors, including trade unions, claiming violations
of domestic law. It also stipulates that parties ensure the enforcement of collective
agreements; however it excludes the rights of association and bargaining from its
enforcement mechanism.

The enforcement mechanism is weak, and none of the cases taken to the
NAALC tribunal have forced the offending party to reform its practices. The process,
and international profile of the cases taken under the NAALC for violations of
workers’ rights have helped to resolve some offending situations, and have also
strengthened co-operation between some trade unions in the three countries.

- Central American Free Trade Agreement (CAFTA) - US, Honduras, Nicaragua,
Costa Rica, Guatemala, El Salvador, and to be included Dominican Republic - 2004

The agreement includes paragraphs on goods (agriculture, manufactures, textiles),
services, government procurement, investor protection, intellectual property, workers’
rights, environmental protection, trade capacity building and dispute settlement.

Labour obligations in CAFTA are part of the core text of the trade agreement and
include provisions that commit CAFTA countries to provide workers with improved
access to procedures that protect their rights. It provides a three-part cooperative
approach. The Agreement requires that all parties shall effectively enforce their own
domestic labor laws, which, however, may not be in line with international standards.

They will work with the ILO to improve existing labor laws and enforcement. And
thirdly strategies will be build to improve workers’ rights (consultations, training
programmes, financial resources and public participation). However, countries are not
obliged to include procedural guarantees or sanctions to correct detected breaches,
and funding to promote cooperation is lacking (The US labour cooperation budget
was just cut by 85% for 2005). Moreover, the ILO core Convention on Discrimination
is not included in the agreement.

- Caribbean Community (CARICOM) - Antigua and Barbuda, The Bahamas, Barbados,
Belize, Dominica, Grenada, Guyana, Jamaica, Montserrat, St. Kitts and Nevis, Saint
Lucia, St. Vincent and the Grenadines, Suriname, Trinidad and Tobago. Entry into
force 1973

Caricom is more than simply a customs union, extending to foreign policy coordination
and wider economic, social and political co-operation. In the treaty
establishing the Caricom, article 73, regarding industrial relations, promotes various
trade union concerns, including tripartite consultations. It also promotes collective
bargaining. There are no explicit linkages - in terms of procedures - between trade
and labour issues in Caricom law, nor are there specified shared labour standards that
countries are required to meet. The Caribbean Congress of Labour, established by
trade unions in the region as a counterpart to Caricom, has a full programme of
activities, and holds regular meetings, including top level meetings, with Caricom
officials and regional leaders.

- Free Trade Agreement of the Americas (FTAA) -

The FTAA will create a single American free trade area, of all North, South
and Central American countries. Deadline for negotiations is the 1st of January 2005
and the agreement should enter into force no later than December 2005. During the
last Ministerial in Miami it was decided that “a common and balanced set of rights
and obligations applicable to all countries should be sought. In addition, negotiations
should allow for countries that so choose, within the FTAA, to agree to additional
obligations and benefits (mainly in the areas of services, investment and intellectual
property rights). One possible course of action would be for these countries to conduct
plurilateral negotiations within the FTAA to define the obligations in the respective
individual areas”. However, FTAA negotiations seem to have come to a standstill.

Chapter VII of the draft agreement deals with labour provisions and nonimplementation
procedures for environment and labour provisions.

- Mersosur - Argentina, Brasil, Paraguay, Uruguay - entry into force 1991

Mercosur is a customs union. The common external tariff has been suspended
by Argentina, and a series of devaluations have left the alliance less stable than in its
early years. Due to concerted pressure by trade unions in the region, with the support
and assistance of the ICFTU and ORIT, the four member governments signed a Social
and Labour Declaration in 1998. This document is very far reaching and goes beyond
the core ILO conventions or statements and cover also social dialogue, employment
promotion, unemployment protection, health and safety, and social protection. The
Declaration also mandated a Commission to monitor adherence to the Declaration and
to advise on measures to ensure adherence.
Trade unions in the region have formed the Southern Cone Trade Union Coordinating
Committee (Coordinadora) and hold regular meetings to press regional
officials on social and labour issues.

Mercosur is currently in negotiations with the EU regarding a trade and
association agreement, and the Coordinadora is active along with the ETUC, ICFTU
and ORIT in pressing for the importance of social and labour issues in these
negotiations.

Negotiations are expected to start on free trade agreements between Mercosur
and Japan, Mercosur and Singapore, Mercosur and Korea, Mercosur and India and
Mercosur and China.

- Communidad Andina - Bolivia, Colombia, Ecuador, Peru, and Venezuela - entry into
force of free trade area 1993.

Now a customs union, the Communidad Andina (CA) began as a free trade
area, and the customs union developed over time. Peru is still not party to the common
external tariff, but has an agreement to harmonize the external tariff over the next year
to reach full harmonization by the end of 2005.
There is a permanent forum for co-operation on social and labour issues, with
a statement of principles, a work programme and regular meetings of labour ministers.

The statement of principles includes such topics as employment creation and social
security, but does not discuss workers’ rights, nor mention trade unions. There is also
a Declaration on protection of Human Rights, including the International Covenant on
Social, Economic and Cultural Rights, and the freedom to join and form trade unions.
There is a Trade Union Consultative Council (CCLA) which meets regularly with CA
officials on issues of social and labour co-operation.

- Central American Common Market (CACM) - Costa Rica, El Salvador, Guatemala,
Honduras and Nicaragua - Entry into force 1963

The common market came into force in all five countries when Costa Rica
joined in 1963, however the negotiations regarding the customs union lasted for thirty
years before Honduras acceded to the customs union in 1993. The first decade of the
CACM saw a large rise in trade between member countries, and progress in lowering
tariffs and other trade barriers.

The CACM Treaties do not deal with the issues of workers’ rights, nor do they
provide for a tripartite consultative body. There are broad civil society forums, and
trade unions from the region are active in these.

- Association of South East Asian Nations (ASEAN) - Brunei Darussalam, Cambodia,
Indonesia, Laos, Malaysia, Burma (Myanmar), Philippines, Singapore, Thailand,
Vietnam - founded 1967

An agreement to set up a free trade area was signed in 1992, with the goal of
tariff liberalisation down to rates below 5% by 2002, and a fully common market with
0 tariffs by 2015, with recent members of ASEAN given extra flexibility in this
timetable.

There is very little attention paid by ASEAN to social and labour issues. However since 1984 the ASEAN Trade Union Council (ATUC) has sought to bring
workers’ rights and social development into the work of ASEAN. Recently ASEAN
Labour Ministers have called for the development of tripartite dialogue at national and
regional levels.

- SAARC - Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan Sri Lanka -
established 1985, with the Preferential Trading Arrangement (SAPTA) signed in
1993.

SAPTA is a relatively modest Trade Agreement, dealing primarily with trade
in goods and reductions of tariffs and other barriers to trade. During the 12th SAARC
Summit (4-6 January 2004) an agreement for the establishment of the South Asian
Free Trade Area was signed. This agreement will come into force on the 1st of January
2006. SAFTA would be implemented over a period of 7 years, with 8 years for Sri
Lanka and 10 years for the LDCs.

SAARC is in the process of drafting a Social Charter, but current texts do not
include any mention of workers’ rights, nor of tripartite consultative mechanisms.
The South Asian Regional Trade Union Council (SARTUC) has promoted workers’
concerns within SAARC.

- Asia Pacific Economic Cooperation (APEC) - Australia; Brunei Darussalam;
Canada; Chile; People’s Republic of China; Hong Kong, China; Indonesia; Japan;
Republic of Korea; Malaysia; Mexico; New Zealand; Papua New Guinea; Peru; The
Republic of the Philippines; The Russian Federation; Singapore; Chinese Taipei;
Thailand; United States of America; Viet Nam - established 1989

APEC is a forum to facilitate economic growth, cooperation trade and
investment in the Asia Pacific region. There are no treaty obligations and decisions
are reached by consensus, whereas commitments are undertaken on a voluntary basis.
Objectives of the forum are free and open trade and investment, as well as a
safe and efficient movement of goods, services and people across borders in the
region.

- Arab Maghreb Union (AMU) - Algeria, Libya, Mauritania, Morocco and Tunisia,
established 1989, with the Maghreb Common Market and Customs Union to take
effect from 1995.

The AMU was established in 1989 to promote cooperation and integration
among the Arab states of North Africa. However progress in economic and trade
integration has been slow, the 1995 timetable for the creation of a Maghreb Common
Market and Customs Union has been missed, and there remain significant tariff and
non-tariff barriers to trade.

At trade union level, the Union des Syndicats des Travailleurs du Maghreb
Arabe (USTMA) brings together trade union federations in the sub-region. In 1991,
USTMA issued the Charter of Fundamental Social Rights of Workers in the Maghreb.
The charter welcomed the creation of the AMU and emphasised the need to make the
social dimension an integral part of integration efforts.

- Common Market for Eastern and Southern Africa (COMESA) - Angola, Burundi,
Comoros, Democratic Republic of Congo, Djibouti, Egypt, Eritrea, Ethiopia, Kenya,
Madagascar, Malawi, Mauritius, Namibia, Rwanda, Seychelles, Sudan, Swaziland,
Uganda, Zambia and Zimbabwe - entry into force 1994

Specific areas of intended cooperation between COMESA states are (in
addition to trade and customs facilitation) transport, communication, energy,
monetary affairs and finance, as well as agriculture, economic and social
development. However, poor transportation, communication and infrastructural links,
cumbersome licensing procedures, remaining tariff and non-tariff barriers, and
currency inconvertibility have hampered the development of trade, hence minimising
the realisation of COMESA objectives.
There is no sub-regional trade union counterpart to the COMESA, nor are
workers’ rights included in the COMESA mandate.

- East AfricanCommunity-Kenya, Tanzania and Uganda

The EAC states have signed The East African Customs Union on 2 March
2004in order to enhance regional integration, economic growth and development.
Measures will include the elimination of custom duties, the removal of non-tariff
barriers, and a common external tariff.

The East African Trade Union Council (EATUC) is an umbrella organisation
bringing together the national trade union centres within the three East Africa
Community members states: Kenya, Uganda and Tanzania, and works to ensure that
the East African Community involves labour in all issues regarding regional
integration, institute tripartism as a method of work, promote the ratification of
international labour standards by the member states, harmonisation of labour laws and
policies in East Africa, and the promotion of the concept of free movement of factors
of production in the region.

- South African Customs Union (SACU) - Botswana, Lesotho, Namibia, South Africa
and Swaziland, entry into force 1970.

Its aim is to maintain the free interchange of goods between member countries. It
provides for a common external tariff and a common excise tariff to this common
customs area. All customs and excise collected in the common customs area are paid
into South Africa’ national Revenue Fund. The Revenue is shared among members,
partially inversely according to their GDP per capita. There are no social provisions in
the SACU mandate.

- Southern African Development Community (SADC) - Angola, Botswana, Democratic
Republic of Congo, Lesotho, Malawi, Mauritius, Mozambique, Namibia, Seychelles,
South Africa, Swaziland, Tanzania, Zambia, Zimbabwe - founded 1992.

SADC is an association agreement with broader political and development
objectives than simply a trade agreement, but it includes trade as a component, and
trade liberalisation negotiations are ongoing under SADC auspices. Importantly, there
is an Employment and Labour Sector, as one of SADC’s core activities, and a
tripartite commission, SALC, for social and labour affairs.

The Southern African Trade Union Co-ordination Council (SATUCC) is the
trade union counterpart to SADC and is involved in SADC’s tripartite activities, as
well as bringing the trade union perspective to other SADC activities. The SALC has
adopted the SATUCC Social Charter of Fundamental Rights of Workers in Southern
Africa.

- Union Economique et Monetaire de l’Ouest Afrique (UEMOA) - Benin, Burkina Faso,
Coté d’Ivoire, Guinée Buisseau, Mali, Niger, Senegal and Togo - established in 1994

This is a broad ranging partnership agreement, consisting of a monetary union,
customs union, single central bank and judicial authority, and political co-operation.

Its main focus is monetary union and responsibility for the common currency.

- Economic Community of West African States (ECOWAS) - Benin, Burkina Faso, Cabo
Verde, Coté d’Ivoire, Gambia, Ghana, Guinée, Guinée Buisseau, Liberia, Mali,
Niger, Nigeria, Senegal, Sierra Leone and Togo - established in 1975

The Treaty of ECOWAS includes a provision for an Economic and Social
Council, to include various social and economic actors, without specifying that this
ought to include trade unions.
African Union (AU) - all African states
Under the treaties constituting the African Union (AU), and the African
Economic Community, all of these aforementioned sub-regional agreements are
meant to be consolidated. A major focus of the AU and the African Economic
Community will be the trade relationships, with a view toward an eventual free trade
area and customs union.

- Gulf Co-operation Council (GCC) - Bahrain, Kuwait, Qatar, Saudi Arabia, Oman
and the United Arab Emirates - founded 1981

GCC is an agreement for co-operation and convergence between Gulf States
on economic and political matters. It includes trade and customs provisions but is not
strictly a free trade agreement. A regional standards organisation, patent office, and
commercial arbitration facility were all instituted to further commercial integration,
which has progressed relatively quickly. A customs union was scheduled to enter into
force in 2003, which was also a pre-condition for a free trade agreement with the EU,
negotiations for which are under way.

- Commonwealth of Independent States (CIS) - Azerbaijan Republic, Republic of
Armenia, Republic of Belarus, Georgia, Republic of Kazakstan, Kyrgyz Republic,
Republic of Moldova, Russian Federation, Republic of Tajikistan, Republic of
Uzbekistan and Ukraine - founded 1991, multilateral trade agreement initiated 1993

This is an association for political and economic co-operation, including trade
integration. A CIS-wide customs union is envisaged. At present a sub-set of five
countries, Republic of Belarus, Republic of Kazakstan, Kyrgyz Republic, Russian
Federation, and Republic of Tajikistan, have constituted a customs union.

- Canada - Costa Rica Free Trade Agreement - signed 2001

Signed in 2001, this FTA involves trade in a broad sense, including all the
elements (investment, government procurement, etc) listed above. There is also an
agreement on Labour cooperation. This takes the same name and same format as the
labour agreements between Canada, the United States and Mexico. In this agreement,
the parties are obliged to embody in their labour law the principles enshrined in the
ILO Declaration and to effectively enforce these laws. The preamble reaffirms the
importance of social development for economic development, and there are
procedures for review of a country’s compliance in the event of a complaint by the
other party. There are no explicit mechanisms for trade union organisations to be
involved in the agreement, nor in the review procedure for complaints.

Other agreements involving Canada
Canada also has free trade agreements with Chile, which includes labour
references, and Israel. It also negotiates agreements with CARICOM, EFTA, the other
four members - minus Costa Rica - of the Central American Common Market, and
Singapore.

- US-Jordan free trade agreement - entry into force 2001

This is a wide ranging FTA, including provisions on services, intellectual
property rights protection, and dispute settlement. As concerns social standards, it
includes the following clauses in the preamble: “Desiring to promote higher labor
standards by building on their respective international commitments and strengthening
their cooperation on labour matters; and...Wishing to promote effective enforcement
of their respective environmental and labour law;” The text of the agreement refers to
the ILO and the ILO Declaration, and recognises that it is inappropriate to seek
competitiveness through lowering standards. It says that while setting labour
legislation is a national matter, national legislation should meet the ILO’s standards. It
specifically lists freedom of association, the right to collective bargaining, minimum
age, prohibition of forced labour, and conditions of work as the relevant key
principles. It does not include non-discrimination in this list.

- US - Singapore, US - Chile and US - Morocco free trade agreements - signed 2003

Chile and Singapore, and 2004 Morrocco
Labour obligations are part of the core text of the free trade agreement. Both parties
reaffirm their obligations as members of the International Labor Organization (ILO),
and shall strive to ensure that their domestic laws provide for labor standards
consistent with internationally recognized labor principles. The agreement makes
clear that it is inappropriate to weaken or reduce domestic labor protections to
encourage trade or investment. And the agreement requires that parties shall
effectively enforce their own domestic labor laws. This obligation is enforceable
through the Agreement’s dispute settlement procedures.

- US - Australia free trade agreement - draft agreement February 2004

As regards the Australian FTA, the AFL-CIO and the ACTU released a joint
statement in 2001 outlining their priorities for the proposed agreement, offering their
support for an agreement that includes provisions for workers’ rights, transparency,
and the right to regulate, and promising their opposition to any agreement that only
serves to promote corporate interests. The draft text agreement was concluded on the
8th of February 2004.

A report by the Labour Advisory Committee stated that: “The labor provisions
of the Australia FTA will not protect the core rights of workers in either country, and
represent a big step backwards from the Jordan FTA and our unilateral trade
preference programs. The agreement’s enforcement procedures completely exclude
obligations for governments to meet international standards on workers’ rights.

Provisions on investment, procurement, and services constrain our ability to regulate
in the public interest, pursue responsible procurement policies, and provide public
services. Intellectual property provisions reduce the flexibility available under WTO
rules for governments to address public health crises. Rules of origin and safeguards
provisions invite producers to circumvent the intended beneficiaries of the trade
agreement and fail to protect workers from the import surges that may result”.

A comment by the NTEU stated that “there are statements in the FTA about
ILO obligations and the need for high levels of environment protection. However,
according to DFAT the only provisions that are enforceable through the agreement’s
dispute-resolution mechanism are those to the effect that neither party shall fail to
enforce domestic labour and environmental laws to achieve a trade advantage”.

- Other agreements involving the US

The agreement between the United States and Cambodia on textiles contains
provisions regarding labour standards. The US has started negotiations for a free trade
agreement with Bahrain and announced a framework agreement on trade and
investment with the United Arab Emirates. A free trade agreement is under
negotiation with the SACU countries. And another one with the Middle East
countries. Peru and Colombia are negotiating free trade agreements with the US,
which are due to be signed before November 2004.

- Negotiations involving Japan

Japan continues to explore FTA’s with Canada, Chile and Mexico, among
others, and is undertaking negotiations with Singapore. It is not yet party to any
bilateral FTA. RENGO has been active in pressing for labour issues in the Singapore
negotiations as well as in investment negotiations underway between Japan and
Korea.

- Negotiations involving New Zealand

New Zealand and Singapore have concluded an FTA, which does not include
mention of labour standards or consultation with trade unions, in spite of pressure by
the New Zealand Council of Trade Unions. The NZCTU also pressed the government
to include such concerns in the negotiations with Hong Kong, and in 2001, the New
Zealand government agreed a framework for integrating labour standards into its trade
activities.

The New Zealand Government is currently involved in a number of FTA
negotiations. The New Zealand-Thailand negotiations are expected to be concluded
by November. The NZ Government has a policy to "better integrate" trade and labour
standards but is developing a separate Memorandum of Understanding with Thailand
on labour standards.

There is a three-way negotiation between New Zealand, Singapore and Chile.
New Zealand already has an FTA with Singapore, one of the issues for unions include
the dangers of a negative list approach to services.

There is also a negotiation process being established for a New Zealand-China
FTA.

Footnotes:

[1WTO website

[2Note that the Cotonou Convention does not refer explicitly to ILO Convention 138 on the Minimum
Age for Employment.