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Trade Conditions and Labor Rights:
U.S. Initiatives, Dominican and Central American Responses
University Press of Florida, 1998.
...
------
Arthur P. Whitaker Prize for best book published in 1998-99 awarded by the
Middle
Atlantic Council of Latin American Studies
(MACLAS)
------ Outstanding book award for 1998-2000 by the
Labor Section, Latin
American Studies
Association
In this remarkably wide-ranging study, the author asks whether
trade restrictions stimulate actual labor reform. Taking
Caribbean Basin nations as evidence, Frundt evaluates the
successes and failures of labor requirements in the U.S.'s
Generalized System of Preferences (GSP) and Caribbean Basin
Initiative.
As Frundt demonstrates, GSP conditions have been responsible
for very limited success in El Salvador where agreements broke
down in formulating and implementing a new labor code.
Compliance hardly fared better in Guatemala, although attitudes
improved. In Honduras, Costa Rica, Nicaragua, and Panama, GSP
achieved temporal successes, and in the Dominican Republic, the
trade requirements displayed their greatest effectiveness,
resulting in genuine and substantive labor reforms.
The usefulness of labor rights trade conditionality as an
incentive for respecting worker organizing, bargaining and living
standards has been hotly debated in recent years. Frundt
acknowledges the many barriers to labor code enforcement.
However, the author challenges the widespread notion that
condtionality actually inhibits trade and worker benefits by
encouraging an "informal sector" of laborers with even less
access to legal remedies.
Even-handed and impressively researched, with hundreds of
first-hand accounts and a broad synthesis of empirical data, this
is an important contribution to the debate over the value of
trade-related requirements and social clauses in securing basic
rights for the world's low-income workers.
[Below please
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Table
of Contents
Preface
I. Introduction
PART I: General Considerations on Labor Rights
II. Caribbean Basin Workers Search For Decent
Treatment 22
III.
The Debate over Methods of Achieving Labor Rights 51
IV. Implementing Labor Rights through Trade
Conditions 85
V. The Record of GSP Petitions in Latin
America 119
Part II: Case Studies
VI.
The Labor Petitions in El Salvador: A Weak Code 159
VII. Structural Implications of GSP Pressure
in El Salvador 178
VIII. The Guatemalan Case: A Reluctant
Compromise 217
IX. Structural Residues in Guatemala: An
Analysis 271
X. GSP and Labor Changes in Honduras 326
XI. Petitions in the Dominican Republic:
Stronger Maquila Unions 354
XII. Regional GSP Efforts in Costa Rica,
Panama and Nicaragua 393
XIII. Workers Evaluate Trade-based Labor
Strategies 441
XIV. Conclusions 475
Appendix
I: The Impact of CBI on C. American and Caribbean Nations 494
Bibliography 500
Introduction/Chapter I:
In
November, 1997, U.S. President Bill Clinton was forced to withdraw his
requested renewal of "fast track" authority for negotiating trade
agreements after Congressional Leader Newt Gingrich could not deliver the
necessary votes. Despite White House
pleas that non-renewal would undermine the international stature of the
American Presidency; despite President Clinton's promotional free trade tour to
major countries in South America, U.S. Congressmen had heard from too many
constituents about the failed promises of the North American Free Trade
Agreement--NAFTA, the persistent international violations of labor and environmental
standards, and their own economic fears.
The failed authorization was reminiscent of November 1995 when the U.S.
Congress refused to grant other southern neighbors the "benefits of free
trade" and tariff reductions enjoyed by Mexico. Critics then elaborated the dismal record of Latin nations in
implementing environmental and worker rights.
In a close vote, the Congress
failed to pass the "Caribbean Basin Security Act" which would have
extended trade parity to most other North American nations. Nevertheless, with the renewal of the
General Agreement of Trade and Tariffs (GATT) and the creation of the World
Trade Organization (WTO), free trade advocates retain a forceful position in
policy circles. In December, 1996,
despite U.S. objections, the WTO rejected the inclusion of labor standards for
GATT's next round of debate.
Unregulated trade between the U.S. and Latin and Caribbean Basin
countries will assuredly spark heated exchange in the years ahead.
This
book is about labor standards and augmented trade in the Caribbean region.[i] In 1996, the equity of labor standards
gained notoriety when TV celebrity Kathie Lee Griffin tearfully denied
knowledge of the abusive conditions endured by under-aged workers who sewed her
labels on clothing produced in Honduras.
(She later had to face similar charges about clothing made in New York
City). But Kathie Lee became a cause
celebre because the U.S. public had already been educated about the low wages,
long hours, minuscule benefits and sexual harassment faced by maquila workers
beyond U.S. borders. Shoppers took
notice when labor solidarity organizations such as the National Labor Committee
or the U.S./Guatemala Labor Education Project leafletted stores requesting
retailers to adopt a minimum code of employee standards for their contracting
producers. News media devoted
sympathetic programs and columns to publicize sweatshop conditions abroad. While occasionally, the publicity generated
opposite claims, i.e. that sweatshop workers were happier to have jobs than to
be without them (Rohter, 1996; NYT 97), global discussion mounted.
Publicity
efforts began to show positive results when the Phillips Van Heusen shirt
company agreed to abide by a corporate code and recognize a Guatemalan union in
1992; Levi Strauss Co. voluntarily announced a code for contractors in 1993;
then Starbucks Coffee promised to
enforce purchasing standards, and GAP Clothing committed to honor outside
monitoring of its producing companies in 1995.
In 1997, ten major U.S.-based maquila contractors assented to the White
House "No Sweat Task Force" recommendations. Other name-brand companies were expected to
soon follow.
But
while solidarity leaflets and purchaser efforts to remedy oppressive labor
conditions remained essential, others sought to reach beyond visible targets
and grapple with less visible sub-contractors and local firms that persistently
mistreated their employees with little consequence. They advocated attaching conditions to trade which the U.S. (or
any nation) extends to exporting countries.
In effect, they said: if you want favorable access to U.S. markets, then
you must take steps to improve national observance of basic labor rights. The question this study asks is whether or
not that approach is effective.
The Argument
While
the trade condition argument appears simple, it has not been easily accepted by
a significant number of people, including those who believe that workers in
developing countries are glad to get a job.
They point out that work conditions there cannot be compared to
standards in advanced nations. The
definition of labor rights can be elusive.
Workers have much lower food and housing costs, and life has less
elaborate requirements. Indeed, their
less-adorned, enjoyable livelihoods are something to be admired.
U.S.
workers know that there is more to life than "living standards" can
measure. On wintry days, they might even wistfully dream of trading places with
those living simpler lives in warmer climes.
But they also know that increased trade attracted by the low wages of
campesinos and seamstresses, and the unhealthy and undignified circumstances of
their work have made comparison more of an issue.
The struggle to reconcile standards
reflects a fundamental debate between those who believe each culture or nation
will naturally evolve appropriate standards as its economy develops through
trade with its neighbors; and those who deny that this "market
process" is sufficient to assure worker protection. To put the matter academically, neo-liberal
(also called neo-classical) economists argue that imposed labor standards
interfere with the market, thereby inhibiting overall national growth;
neo-institutional economists insist that without standards, worker exploitation
will remain. Decent treatment may
motivate worker productivity and increase consumer demand, but market driven
companies can still choose intimidation and bare-subsistence wages.
U.S.
workers also believe labor conditions abroad are increasingly tied to similar
conditions at home, and the unrestricted ability of publicly chartered
corporations to shift high-paying, unionized jobs to low-paying, non-unionized
locations outside the U.S. They wonder
who really benefits when untrammeled trade allows jobs to be relocated from
industrial to developing nations with no controls to assure worker
dignity. Again, in explaining this
trend, neo-liberal economists stress the benefits of "market factors:" Seeking a "comparative advantage,"
companies are simply obeying the law of supply and demand. Since modern communications and transport
systems now make it possible to coordinate production and distribution on a
worldwide basis, any firm which desires to remain competitive must take
advantage of lower labor costs wherever it can locate them. If this means having its shirts or auto
parts assembled abroad, then of course that is what a company will choose to do,
but its investments will convey substantial gains for workers in all countries.
However,
neo-institutionalists emphasize that it is not just a matter of corporations
relocating for the best market advantage (see Dietz, 1995). They also justify economic systems that
perpetuate a small minority of wealthy families and a large underclass ready to
work for pittance remuneration.
Consciously or unconsciously they thereby help formulate political
policies that encourage enclaves of low-wage opportunity. Under the rationalization of national security,
they support authoritarian governments and quasi-military dictatorships that
guarantee stability. In the process,
even within 'market' conditions, they cultivate a breeding ground for
anti-union sentiment which inhibits the natural ability of working people to
demand their own work requirements.
Background: Changing Economies of Caribbean Basin
Nations
To
contribute to this debate, our study focuses on labor standards in the
Caribbean region as they relate to augmented trade. In the process, we will evaluate the merits of the neo-classical
and neo-institutional arguments. The
historical transformation of work in this region remains a key factor in such
evaluation.
Over
the last fifteen years (1983-98), largely due to trade, a growing number of the
still mostly agricultural workers in Caribbean basin nations have been
transformed into wage laborers in foreign industries. Far from setting their own pace of life, they have quickly been
forced into tasks previously performed by assembly workers in U.S.
factories.
As
with work conditions in the U.S., the transformation of trade is not solely
responsible for converting the work process in Caribbean basin nations. The other factors, while stimulated by
trade, are also operative: augmented mechanization of agriculture, land
concentration, urbanization, improvements in communications technology,
enhanced industrialization, and consumer substitution of formulated products
(such as corn syrup for sugar, and coffee substitutes). But the among these factors, the
export/import decisions of both national and international upper classes have a
significant influence as our study will discover.
Until
the 1980s, the pace of change was slower in the Caribbean basin than in much of
Latin America. Some have attributed
this to the conservative policies of a relatively isolated elite which has
controlled the political and economic system.
Satisfied with traditional export income, they were reluctant to
reinvest to improve output, offering minuscule opportunities to the vast number
of poor, landless peasants and part-time workers who sustained production (see
DuBray, 197x). However, others stress
that international class interests were complicitous in maintaining the region's
dependent state. The Caribbean basin's
strategic value became defined as an area for corporate sourcing and
investment, and for political alliances against the Soviet Union. Although structural imbalances persisted,
policy-makers were oriented to protect U.S. interests and property (see Coleman
and Herring, 1991; Hamilton, et. al. 1988; Weaver, 1994).
For
many years the region's peasants and workers, sometimes separately, sometimes
jointly, demanded change. Occasionally,
as in Guatemala, between 1944 and 1954, and Cuba after 1959, they enjoyed
periods of control and improved conditions.
However, neither the local nor the North American upper classes
envisioned peasant/worker revolutions as an acceptable formula for advancement
(Paige, 19xx). Critics charge that
international and national elites coordinated their forces to brutally repress
any indigenous efforts at national freedom:
U.S. officials would not tolerate an independent Guatemala, so they
encouraged CIA operatives to overthrow its elected government (Immerman, 1982;
Gleijeses, 1991). They isolated and
blockaded Cuba, whose autonomy might inspire similar efforts elsewhere
(Franklin, 19xx). They evolved a
double-prong approach: Thoughtful Northern development theorists realized that
peasant/worker solutions to inequality had to be replaced by an Alliance for
Progress of improved land redistribution and employment. At the same time, U.S. government operatives
infiltrated every free-spirited, democratically chosen alternative to the structure
of power. They would either divide it,
or eliminate it directly, as they did with Juan Bosch's brief presidency of the
Dominican Republic.
From
this perspective, these interventions protected traditional class privileges,
but they also created fresh institutional forces which unleashed a counter-insurgency
monster that viewed all reform efforts as 'communistic." Military henchmen schooled in Panama or Fort
Benning, Georgia returned to rule their nations with unapologetic blood and
torture. Any activity to improve local
conditions was suspect. Not only did
this halt grassroots development; it also stymied the proper functioning of
traditional structures of justice. As
they became subjected to the brutalizing authority, government ministries,
police, and courts surrendered previous legitimacy. They hesitated to apply established principles of human rights
and labor standards, and abuses persisted.
Although
they are open and generous, Central American and Caribbean peoples were not
prone to accept injustice, and pockets of resistance persisted. Other endeavors via the U.S. Agency for
International Development failed to mitigate conditions and inequalities exacerbated. Campesinos, intellectuals, and even
disillusioned military officers fled to the mountains to organize their
rebellion.
"The
Guerilla Wars of Central America" and other movements in the Caribbean
began as a thirty-year struggle to redress the gross imbalances in land and
power and the resulting grinding poverty and mistreatment (Burbach and Flynn,
1984, LaFeber, 1984, Landau, 1994, PACCA, 1984, Pierce, 19 , Walker, 19 ; cf. also Lernoux, 19 ; Berryman, 1984, 1987, 1995 for religious influence). In the late 1970s, these paramilitary forces
won important victories in Guatemala (Jonas, 1991) and El Salvador (Armstrong
and Shenk, 1982). The Sandinistas
celebrated the achievement of state power in Nicaragua in 1979 (Vilas, 1986,
Walker, 1985). In the Caribbean, the
New Jewel movement gained office in Grenada.
Rather than dealing with such changes constructively, once again, U.S.
policy-makers chose ideology over humanity.
They flooded the region with military aid and advisors. In Central America, local armies unleashed a
reign of terror against virtually all members of popular organizations, and
indigenous communities. They would stop
the guerillas, as one Guatemalan general put it, "killing the fish by
draining the sea." For reasons
partly related to the war effort, prices which these nations received for their
traditional agricultural exports dropped significantly.
U.S. Policy Promotes Regional Job Shift
In
the early 1980s, North American strategists again reached consensus that brute
force alone would not bring order to the region's population. They could not wean themselves from military
force, since they blamed the region's social and political crisis on "Cuba's regime and the presence of
other antidemocratic forces in Nicaragua, Grenada, and other parts of the
region". The U.S.'s overt/covert
war would still have to deal with them.
However, they also admitted
"this crisis was triggered by escalating costs of imported oil and
declining prices of the Basin's major traditional exports" (USTO:
1994). To remedy this, they urged an
economic development strategy that stepped beyond the designated assistance
programs of USAID. In 1983, President
Reagan invited Henry Kissinger to head the BiPartisan Commission on Central
America in 1983, The Commission gave a
fresh emphasis to freer regional trade:
along with overt military force, and other forms of development aid, trade
would become the solution for improving living standards in Central
America/Caribbean (see Report, 1984; U.S. State Department, 1986).
To
implement this plan, Congress enacted the Caribbean Basin Economic Recovery Act
(CBERA) in August 1983 (usually
designated as the Caribbean Basin Initiative--CBI). The U.S. hoped that CBI would mollify the mushrooming economic
and political crisis in the region. CBI
was designed to promote regional stability "principally by providing
incentives to foreign and domestic private investors in non-traditional
economic sectors" (USTO, 1994).
The package of CBI trade preferences and tax incentives were geared to
diversify production and exports away from traditional Caribbean Basin
commodities.
Twenty-four
of the region's twenty-nine nations were eventually included. CBI made it possible for Central American
and Caribbean nations to dramatically increase their duty-free exports to the
U.S., and the Reagan Administration reorganized its multiple aid agencies to
offer advice and financial assistance (see Johnson, 1993). All told, over the next twelve years CBI
programs spent nearly $16 billion to transform the region into an
agro/industrial complex valued at 12% of overall regional exports to the U.S.
From Cane cutter and Coffee picker to Stitcher
and Seamstress
CBI
stimulated a new pattern of exports.
This pattern expanded after 1986 when U.S. President Ronald Reagan
announced a "Special Access Program" for textiles and apparel which
brought a crucial shift in regional employment. Apparel, which constituted only 5.5 percent of overall U.S.
imports from the area in 1984, reached
39.8 percent in 1993, making "Caribbean countries collectively the
fastest growing U.S. supplier in 1989‑93," followed by Mexico and
China (USTO, 1994). At the same time,
similar jobs developed in footwear, instruments, and sporting goods. Most were products that lent themselves to
the final assembly of components produced in the U.S. Eying an opportunity to industrialize, notes USTO, "regional
policy-makers recruited export‑oriented assembly operations" known
as maquilas. The number of factories
and export processing zones in the region magnified dramatically, as
illustrated in the following pages.
Jobs
also remained with the region's traditional exports such as bananas, coffee,
sugar, beef, and from several Caribbean islands, aluminum ore and petroleum
products. But even here the new exports
came from seafood and such "non-traditional" agricultural export crops as vegetables and
fruit sold to the U.S. market. Jobs in
these areas did not pull people toward urban areas but they transformed life in
the countryside (e.g. see Burnham et. al., 1992 on changes in family
roles).
The
CBI contained references to human and labor rights, as elaborated below. However, in their promotion of the new
maquila assembly plants or the non-traditional agricultural sector, U.S.
policy-makers minimized references to this aspect of the policy. The subject also remained verboten among
their counterpart basin technocrats who often informally agreed that the local
labor laws would not be enforced in export-related facilities. Thus, an aspect of the promotion of trade in
place of autonomous development was an insistence on maintaining labor control.
Impact on U.S. Workers
At
the time that the U.S.'s Caribbean basin neighbors experienced a massive
transformation in employment, U.S. working families faced a drop in income
(Ehrenreich, 1993; Sklar, 1995).
Despite more of its members joining the work force, the average U.S.
family had less buying power in 1994
than it enjoyed in 1964. Social
scientists offered several reasons for this loss of U.S. family income standards,
including the changing value of the American dollar, job-displacing technology
(Rifkin, 1995), longer work hours (Schor, 1992) and the growing importance of
lower paid service sector occupations (Labor Institute, 1995). But the run-away
corporation and increased exports from abroad remained the most popular
rationale in a growing national debate.[ii]
Affected
by job-transfers argument, U.S. policy-makers justified their actions by
claiming that increasing trade abroad meant more jobs for the U.S. In any case, CBI imports did not account for
much loss. Aside from apparel, said USTO,
CBI-produced goods rarely surpassed 10% of U.S. production in any category.
Those over 5% included luggage, leather apparel, frozen vegetables, and cigars.
Medical instruments was highest at (12%) followed by electrical resistors
(11%). USTO unconvincingly argued that
these figures did not constitute a job displacement effect.[iii]
Nevertheless, especially from industrial areas, the U.S. public demanded
restrictions on the ability of corporations to relocate to Mexico, the
Caribbean Basin, and elsewhere.
"It is not just a question of free market economics," they
insisted. "U.S. workers have
devoted their lives to the construction of corporate America. Their sweat and tears helped create the
investment potential of these companies.
Their families should not be treated as a commodity that can simply be
moved about at will. Both family and
community health depend on a stable and lasting environment which deserves
protection."[iv]
During
the 1980s, these 'populists' developed several strategies to prevent corporate
dislocation (see Ramney, 1987). Some
sought restrictive clauses in corporate charters; others demanded early warning
legislation so that workers might have an opportunity to either collaborate
with a company to achieve desired savings or to buy it with some government
financing. The official labor movement
remained wary of these solutions, preferring laws that would specify domestic
product content. The AFL-CIO urged the
public to "Buy American," thereby preserving U.S. jobs and living standards. In the 1990s, public figures like Ross
Perot and Pat Buchanan capitalized on
widespread popular discontent over factory closings by promising to redraft
U.S. trade policies to retard plant dislocations. While such efforts won
notoriety, the trend toward corporate globalization and job transfers
accelerated.[v]
The Labor Rights Argument
However,
another approach to the work force impact of
corporate globalization emerged in the 1980s (see Cavanagh, et. al.,
1988). Rank and file trade unionists as
well as an articulate group of social scientists postulated the linkage:
uncontrolled transnational investment and trade was detrimental to workers in
the U.S and it did not necessarily improve the living standards of those
working in other countries either. In
fact, argued the group, most of the countries where jobs were transferred had
highly authoritarian governments that tightly controlled the income levels of
the population. They would often summon
their U.S.-trained armies to enforce local laws prohibiting strikes, factory
occupations or even organizing--i.e. activities designed to improve the quality
of life of the nation's work force. In
other words, it was not just market factors which stimulated the transfer of U.S.
industrial jobs elsewhere; rather it was the attraction of "labor
repressive" regimes which made it possible for transnational corporations
to exploit their work force more easily.
These advocates challenged the "protectionist" AFL-CIO
"buy American" campaign as both ineffective and insensitive to the
genuine needs of workers abroad who needed jobs but were also being
persecuted. Instead, they promoted an
enforced requirement for labor rights in all countries.
In
1984, this perspective won a sufficient number of adherents to win legal
recognition for the principle of labor rights as an element of fair trade: U.S. trade benefits such as those of the CBI
program must arrive in the context of a nation's respect for labor rights.
Requirements for worker standards were elaborated in the Generalized System of
Preferences (GSP), a trade program which grants tariff reductions to "most
favored nations." If a country's
exports were to obtain favored nation treatment the country would have to show
that it was "taking steps" toward full respect of worker dignity and
free organizational rights. GSP
contained a provision which permitted interested parties to petition for review
of participating nations to verify that they were complying with five core
areas of labor rights: freedom of association; the right to negotiate and
bargain; prohibitions against using child labor and against slave labor; and
humane working conditions. At first,
few people comprehended the potential effect of this new legislative requirement. By the early 1990s, however, a significant
number of countries had been cited for labor abuses and "labor rights
trade conditionality" had emerged as a major public issue.
By
the time of Kathie Lee Griffin's dramatic televised confession, "labor rights"
had become a primary union response to the expansion of hemispheric free
trade. The work had effect: In 1990,
GSP worker rights provisions were attached to the Caribbean Basin Initiative
discussed above. Such monitoring
provisions were excluded in the final round of the North American Free Trade
Agreement (NAFTA), and the side agreement on labor issues was much weaker than
advocates had hoped. Nevertheless, it did contain important provisions that
could generate pressure (see Compa, 1996; Cook, et. al, 1997; Herzenberg,
1996). The Miami Summit of the Americas
promoted labor rights in 1994. The same
year, the U.S. won a commitment that labor rights would be on the agenda of the
World Trade Organization preparatory committee created to implement the General
Agreement on Trade and Tariffs (GATT).
Although the U.S. remained ambivalent on trade conditionality for China
(see Tonelson, 1996), it did take stronger actions viz. Japan for non-labor
related market protections. In 1997,
partly for labor rights concerns, the U.S. Congress balked at renewing
"fast track" treatment of trade legislation Unions remained adamant about "social contract"
provisions in future agreements. The
issue of trade conditionality promised to remain on the public policy agenda in
the years ahead.
This
study hopes to enlighten debate by examining the impact of U.S. labor rights
trade provisions on labor standards in Central America and the Caribbean. The region is constituted by a number of
small economies, most of which have historically resisted trade union rights,
more so than their larger neighbors to the south. Central-America/Caribbean nations are also more dependant on
U.S.-based trade, and potentially more affected by labor rights
conditions. While the area has been
subjected to considerable worker-rights pressure, up to this point policy
advocates have had virtually no scientifically-assessed results.
Major Hypothesis
The
basic hypothesis of this study is that in the Central-America/Caribbean, labor
rights provisions positively influence national labor rights legislation and
enforcement. To put it another way,
were it not for the application of trade-based conditions,
Central-America/Caribbean countries would be much slower to legislate trade
union protections. Specifically, if GSP
requirements were not invoked, these nations would still be governed by
antiquated labor codes and little enforced monitoring.
Corollary to this fundamental hypothesis is another important principle:
enforced labor rights improves a society's labor conditions. This subsequent proposition will test the
claim that enforced labor standards are counterproductive, that they serve as a
barrier to market forces which would more rapidly lead to better conditions for
a larger number of people. To examine
this possibility, we will probe other potential causes of labor standards
improvement which could serve as "intervening variables" that could
affect this relationship. These include
economic development, political forces, private sector flexibility, and
union strength.
The
two hypotheses bear on the neo-classical/neo-institutional debate about the
role of market forces in improving labor conditions. The hypotheses will motivate an exploration of the nuances of
these theories as they affect conditions in Central America/Caribbean nations
where corporations have few restrictions on investment and trade. One such nuance is the admission by some
neo-institutionalists that enforcement of labor standards might stimulate
corporate scofflaws to clandestinely transfer production to the lower-paying
informal sector.
Research Design
Economists
may be inclined to study the impact of labor rights by examining econometric
outcomes on export income, job creation, wage increases and overall economic
growth (e.g. Rodick, 1995). However, we
believe that the above hypotheses require a much broader approach that
integrates several types of evidence:
comparative historical examination of the changes in national labor
legislation, its compliance in specific countries, and personal testimonies by
those affected. While testimonies are
not always objective, they do convey the experience of trade impact as a social
reality. This study proposes to
reconcile various forms of evidence.
It will look at the results of imposed trade requirements in seven
Caribbean Basin nations: Costa Rica, the Dominican Republic, El Salvador,
Guatemala, Nicaragua, Panama, and Honduras.
All seven have been subjected to GSP petitions. Then, the study will give special emphasis
to the development of labor rights in El Salvador, Guatemala, Honduras and the
Dominican Republic since these nations have exemplified extreme labor rights
violations on the one hand, and clearly delineated government and private
sector responses to labor rights trade provisions on the other.
To
test the specific impact of GSP on local labor rights practice, the project is
organized into three parts and fourteen chapters. The first part examines the arguments surrounding labor rights
and specific aspects of labor legislation in Latin America. The second part constitutes case
studies. The final part summarizes the
results.
I. Introduction and Research Design: The chapter briefly discusses the
historical context of the trade conditions debate and the impact of trade on
employment. It follows this with the
evolution of the "labor rights strategy." Then it offers an approach for testing the suitability of that
strategy in Central America and the Caribbean.
PART I: General Considerations on Labor Rights
II. Workers Experience Their Rights: This chapter serves as a vehicle for
individual workers to tell their own stories about conditions resulting from
increased global trade. While they
recount experiences at specific work sites, they also tell of challenging
repressive work conditions through moribund legal systems, and of their recent
frustration with unilateral decision by their governments to privatize public
services.
III.
The Debate over Labor Rights Standards:
The chapter presents the evolution of how worker rights came to be
codified through the International Labor Organization (ILO), beginning with the
early conventions on hours and mandated rest in 1919. The dispute between neo-classical and neo-institutional
economists regarding labor rights standards is examined in detail, as well as the beneficial and
detrimental role of the market, the government, and an enlightened private
sector in redressing employee grievances.
Finally, the study focuses on the utility of trade requirements for
gaining observance of such rights.
IV. Implementing Labor Rights through Trade
Conditions via the GSP Petition Process:
This chapter briefly details the history and legal mechanisms used to
tie trade conditions to labor rights.
It then reviews the evolution and function of the U.S. General System of
Preferences (GSP) trade legislation.
GSP is the most concrete example of a policy that limits trade with
nations less committed to improving respect for such rights. The discussion addresses the selection of
rights to be enforced, procedures for reviewing these rights, and measures of
trade condition effectiveness. It then
proposes an approach for testing the usefulness of labor rights requirements on
corporate and government behavior.
V. GSP Petitions and Economic Changes in
Latin America:
This chapter briefly summarizes the economic and
labor conditions extant in Latin America countries prior to the introduction of
GSP petitions. After some introductory
comments describing the evolution of labor rights in Latin America in general,
it describes the process in which the AFL-CIO invoked GSP to review labor
conditions in Chile and Paraguay. Then
it places Central American/Caribbean national conditions within the overall
context of world trade. It also traces
the past and present role of U.S. trade on C.A./Caribbean economies. The
chapter then questions the effect of the GSP process in Central America and the
Caribbean, asking how the GSP petition process has affected specific national
labor policies over the past ten years.
Part II:
Case Studies
VI.
The Labor Petitions in El Salvador: A Weak Code: This case recounts what happened following
the first major drive in Central America to tie together trade and labor
rights. In the midst of a relatively
upbeat national mood following implementation of the 1992 Peace Accords, it
reveals how business interests succeeded in substituting a relatively weak code
for genuine private sector reform and substantive labor dialogue, even .
VII. The Structural Impact of GSP in El
Salvador: The chapter scrutinizes
institutional behavior to assess changes following passage of El Salvador's code.
Included are the Labor Ministry, the Courts and tripartite
dialogue.
VIII. Labor Rights in Guatemala: The GSP
Process: The Guatemalan case, which
began in 1986, represents a more complex outcome of labor rights
observance. The first of two related
chapters presents the step-by-step chronology of the legal petitions,
government/corporate responses, and trade-union assessment.
IX. Labor Rights in Guatemala: Institutional
Results: Utilizing statistical
tables and expert appraisal, the follow-up chapter examines modifications in
Guatemala's Ministry of Labor, Courts, Wage Structure, Health Services, tripartite
discussions and broader social transformations that are linked to labor rights
conditions.
X. Honduran Petitions: After discussing the failure of a New York
union-sponsored petition, the study focuses on an agreement between the
government and the AFL-CIO to equitably apply labor law in the maquila
sector. The chapter considers the
evolution of labor activism in Honduras.
XI. The Labor Petitions in the Dominican
Republic: Stronger Unions in the Maquila Sector: Here, the trade condition strategy achieved its most substantial
victory--the actual functioning of maquila unions. The section answers why among many misses, the GSP strategy
brought success. It examines the
evolution of labor rights; petition antecedents; the Haitian question; the
passage of a new labor code; and the battle over code implementation in the
free zones.
XII.
Other Regional GSP Efforts: Costa Rica, Nicaragua, Panama:
The chapter briefly chronicles the impact of the trade conditions
approach with three additional nations.
AFL-CIO sponsored petitions stimulated important, though reluctant
improvements in Costa Rican labor legislation and prevented a major backsliding
in Panama. Results from the Nicaraguan
case also offers salient insights on the application of labor rights principles
under divergent types of governments.
XIII. Workers Evaluate Trade-based Labor
Strategies: Here, trade union
leaders who have participated in GSP actions reflect on the lessons of a
labor-conditioned approach to regional trade.
In addition to their insights and reservations, they discuss what this
portends for future trade union cooperation and for "social charters"
that affect trade.
XIV. Conclusions
The
project reflects the results of 1994-1996 fieldwork in Guatemala and El
Salvador, including more than 80 lengthy interviews with businessmen, trade
union leaders and government officials.
It also incorporates data from other nations in Central America and the
Caribbean, and abstracts of GSP-related labor reform legislation. While the results are largely drawn from
qualitative research and the reconciliation of conflicting views, quantitative
data that test relationships and measure institutional performance add
legitimacy to qualitative findings.
Finally, after discussing the
complexities of testing the two hypotheses about the impact of trade conditions
on worker rights, the study suggests
policy implications that combine state and non-governmental approaches
to achieve a more humane model for trade.
Refreshing Pauses: Coca‑Cola and Human Rights in
Guatemala. Praeger Press, 1987
"Gulf and Western in the Dominican Republic: An
Evaluation." Interfaith Center
on Corporate
Responsibility, New York, 1979 (subsequently reissued in Spanish
by the Institute
for Social Science, Dominican Republic).
(ed.) An Agribusiness Manual: working papers on
corporate responsibility and food
issues,
Interfaith Center on Corporate Responsibility, New York, 1978.