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Trade rules threaten workers’ rights and public services

16 May 2018
Trade unions are developing strategies to address the harm a new generation of trade agreements may have on workers and access to public services in the Asia-Pacific region.

Kate Lappin, the Asia Pacific Regional Secretary of Public Services International (PSI) talked to the Friedrich Ebert Stiftung about how the agreement will affect workers to a greater extent than many initially belived:

The TPP-11 [Comprehensive and Progressive Agreement for Trans-Pacific Partnership] is likely to have a range of impacts on workers, from limiting labour regulations and cutting the numbers of public employees to enabling increased outsourcing within and beyond borders.

Lappin attended a strategy meeting on trade justice held in Singapore on 3-4 May. Trade unions and partner organisations from the region gathered to discuss how to build stronger capacity to analyse trade agreements from a labour perspective and to develop joint campaigning and advocacy strategies to challenge them. 

Read: The full interview Kate Lappin did with Friedrich Ebert Stiftung. 

According to Lappin, while unions have played an important role in opposing and amending global policies that pose a threat to workers and the public, they have had less success in raising awareness of the potential harm a new generations of trade agreements, like the TPP-11 and the Regional Comprehensive Economic Partnership (RCEP), may have on workers in the Asia-Pacific region. 

Four reasons for why trade agreements are bad for public services

Trade and investment agreements have already had a significant impact on workers and on access to quality public services. PSI and Lappin says the new generation agreements pose an even greater threat  to public services. She says the agreements will diminish quality services, by:

  1. Diminishing government revenue required to invest in public services.
  2. increasing costs for governments.
  3. Removing and restricting regulations on service providers.
  4. Severly curtailling the potential for municipalisation.

A central purpose of new-generation trade and investment agreements is the removal of any regulatory constraints on foreign investment and the placement of regulatory constraints on governments’ capacity to intervene in the economy.

The agreements are not merely about tariffs or duties, they go beyond the border and impose restrictions of governments’ ability to regulate across the economy including in relation to labour, professional standards, health, environmental protections, and access to services.

Trade agreements seek to expand market access and liberalize trade in services, the key policy ingredients required to advance privatization. They generally require any service that has either been supplied in part on a commercial basis or in competition with commercial service provider.

In most countries health, education, childcare, water, energy, sanitation, road building have all been commercialized at some point, which means that, unless they are explicitly excluded, they must be open to foreign investors and subject to the agreements deregulatory requirements. Once a public service comes within the scope of the agreement, foreign investors must be subsidized to the same extent that public subsidies are provided and regulations must not be “more burdensome than necessary”—a broad and dangerous term.

Will prevent governments taking back control of public services

Trade agreements use a ratchet mechanism to ensure that regulation of services is reduced over time: provisions move forwards in increments that cannot be reversed, and governments cannot introduce new regulations that may be essential in the future. This will have two significant impacts:

  1. It will prevent governments taking back control of service provision, even in the case of market failure. 
  2. It will prevent governments from addressing the growing influence of digital data, introducing new initiatives to combat environmental harms, or regulating for unforeseen risks. It could also preclude the introduction of minimum staffing levels and qualifications in areas such as nursing, childcare, community service and care for the aged, regardless of evidence supporting such minimum rations.

How will the trade agreement (TPP-11) affect workers in Asia and the Pacific?

According to Lapping the TPP-11 is likely to have a range of impacts on workers, from limiting labour regulations, cutting the numbers of public employees, enabling increased outsourcing within and beyond borders. Trade agreements are designed to enable capital to locate the cheapest possible labour creating a race to the bottom in wages and conditions around the world. 

The limited protections for workers within the TPP-11 are weak and experience demonstrates that labour chapters in trade agreements are incapable of addressing labour rights violations. PSI is of the opinion that the ILO is the most appropriate body to enforce labour rights obligations.

Encourages trade unions to mobilize against trade agreements

To effectively mobilize an opposition to trade agreements, it is necessary for workers to understand what’s at stake. Lappin says the first challenge is to make the threat clearer to union members and the public.

Together we are stronger, so we need to collaborate, and we need to find allies. Students, farmers and users of public services must be part of our alliances. We need to mobilize and demand an open and democratic process to properly debate and understand the consequences of secretive negotiations. It won’t be easy, but the union movement has shown many times that when we are united, we can win.

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