From: Molly McGrath (memcgrat2000@yahoo.com)
Date: Tue Jun 04 2002 - 11:17:02 EDT
*** LINKING TEXTILES TO LABOR STANDARDS: PROSPECTS FOR
CAMBODIA AND VIETNAM ***
By Andrew Wells-Dang
(Editor‚s Note: Excerpted from a new FPIF Policy
Report available in its entirety at:
http://www.fpif.org/papers/txt-labor.html .)
Efforts to craft effective vehicles to link trade and
labor rights continue to be a major goal for fair
trade advocates and members of the global justice
movement. Much of this debate has focused on the issue
of a social clause in the World Trade Organization
(WTO) and the appropriate use of sanctions as a policy
tool to advance labor rights. Alongside this debate, a
different approach linking trade and labor rights has
emerged in the context of the textile trade between
the U.S. and Cambodia. The first trade agreement of
its kind, the 1999 U.S.-Cambodian textile compact
links increases in garment export quotas to
improvements in labor conditions. Labor provisions
similar to those in the Cambodian textile agreement,
but applying to all sectors of the economy, also make
up part of the U.S.-Jordan Free Trade Agreement,
signed in 2001. Senate Finance Committee leaders Max
Baucus (D-MT) and Charles Grassley (R-IA), despite
their different political views, see both the Jordan
and Cambodia agreements as setting a precedent for
future negotiations.
This policy report focuses on the cases of Cambodia
and Vietnam, two countries with clear historical
reasons for wanting trade and improved relations with
the U.S. In the quarter century since the end of the
Vietnam War, normalization of relations with both
countries has come gradually. Since Cambodia was
granted NTR in 1996, however, its total exports to the
U.S. have skyrocketed from $3.7 million in 1996 to
$300 million in 1998 and nearly $1 billion in 2001.
Clothing constitutes over 95% of this total.
After years of delay, Vietnam's bilateral trade
agreement (BTA) with the U.S. was signed in 2000 and
ratified in the fall of 2001. As part of the debate
over Normal Trade Relations (NTR) for Vietnam, several
members of Congress conditioned their approval on the
approval of a textile agreement along similar lines to
Cambodia's. Preliminary negotiations between
Washington and Hanoi have already begun, in what is
bound to be a contentious process on both sides. In
light of the Cambodian experience, American and
Vietnamese officials need to consider a number of
complex policy issues as they work toward an
agreement.
In the U.S., responses to the Cambodian textile
agreement have been generally positive across partisan
lines. Labor activists, while continuing to criticize
working conditions and legal abuses in Cambodia, agree
that labor standards are improving. Free-traders,
while opposed to quotas along with other trade
barriers, have also responded favorably to the
agreement's use of incentives for "good" behavior,
rather than sanctions for non-compliance.
Textiles are not included in general trade agreements
due to the provisions of the Multi-Fiber Agreement
(MFA) and the WTO Agreement on Textiles and Clothing
(ATC). The MFA, which dates from 1975, assigns quotas
as a means to limit textile imports to the U.S. It is
due to MFA quotas that clothing sold in U.S. stores
often comes from unlikely locations such as Nicaragua,
Bangladesh, or Mauritius--as well as Cambodia. Quotas
may benefit some small country producers that might
otherwise have difficulty selling to the U.S., but the
MFA is a prime example of how the U.S. has sought to
protect key domestic industries while preaching free
trade for others. In the words of a recent Oxfam
report, "from its inception, the MFA has been a clear
departure from the principles underpinning the entire
multilateral trading system." Few other industries
have such obvious double standards.
The best possible solution to the dilemma of bilateral
agreements would be an international agreement on
labor standards that applies to all U.S. trading
partners and all sectors of the economy equally,
rather than individual accords that must be negotiated
separately. But such a common standard is still a long
way in the future. In the meantime, Vietnam and the
U.S. both stand to benefit from a textile agreement,
with or without labor conditions. Given the inherent
inequalities and political obstacles in trade
negotiations, both sides may have to settle for
second- or third-best. With patience and a little
luck, a compromise should be possible in the short
term, though much work still lies ahead.
(Andrew Wells-Dang is Washington representative of the
Fund for Reconciliation and Development, a nonprofit
organization advocating for normal economic, cultural,
educational, and diplomatic relations with Cambodia,
Laos, and Vietnam.)
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