Week 9: Avoiding the "Social Dumping" Made Possible by Free Trade
By Elizabeth Pietanza
Within the context of free trade, labor issues have been peripherally addressed by the North American Agreement on Labor Cooperation (NAALC; a side agreement to NAFTA) and the US-Jordan Free Trade Agreement. However, including labor standards as an essential element of the Chile-US Free Trade Agreement (FTA) was a common goal to both US union leaders and Chilean policy makers. The culmination of the negotiators’ fervent efforts are illustrated in the provisions of Chapter 18 of the FTA, which provides an unprecedented agreement on labor objectives with a free trade framework.
According to Chapter 18, both parties affirm to effectively enforce their own labor laws. Labor standards are not equal in both countries, as each party is responsible to establish its own labor laws and maintains discretion to regulate and enforce compliance. However, each party must uphold and enforce laws for fundamental labor standards that include the right to associate, organize and bargain collectively, the prohibition of forced labor, a minimum age for employment and acceptable working conditions concerning minimum wage, weekly work hours and occupational health and safety. Chile’s Dirección del Trabajo (Labor Directorate), which works with a staff of 1800 officials, is in charge of monitoring and enforcing compliance with Chilean labor laws. The US Department of Labor has the comparable responsibility of administrating and enforcing over 180 federal labor statutes according to the terms of the FTA.
Despite the aspirations of the FTA, Chile’s 600,000 temporal agricultural workers complain that little has changed in the two months that the FTA has been in force. They cite to continual problems of excessively long work days, poor transportation and food and the lack of break rooms. Newspapers report that illicit employers (i.e. those who employ temporal workers illegally) employ agents to use mafia-type tactics to hire agricultural workers. The agents show up in small villages demanding a certain number of workers, who are informed that they will be paid 3000 pesos (less than US$6) for a full day’s work. The agents either make false contracts with the workers or no contract at all, which violates Chilean labor law.
The Inspección de Trabajo (Labor Inspectors) cites that in the 2002-2003 temporal work season, labor law violations grew by 46% for agricultural workers. In light of these practices and statistics, Chile is adamant that it does not want to be exposed as a country that sanctions social dumping, which refers to the practice of foreign entities taking advantage of less stringent labor and environmental standards for the purpose of increasing profits. In the US, despite the work of immigration advocates, legislation controlling pesticide use and union efforts, problems also persist with low pay and oppressive work conditions for agricultural workers.
Chapter 18 of the FTA also establishes a Labor Cooperation Mechanism, which provides both countries with the opportunity to work as a team for the purposes of improving labor standards and advancing common goals. The parties plan to host government delegations, share information, develop joint projects and pursue technical exchanges and collaboration with respect to labor law. The labor lessons that one country learns will be shared with the other. This collaborative effort is appropriate as the way some Chilean employers treat there workers reminds us of how undocumented workers from Mexico and Central America are treated in the fields of Southern California and the Central Valley. As Chile and the US become more interconnected, and as there are free trade incentives with the FTA, both countries will hopefully work productively on their common labor goals and successfully realize their commitment to improve and enforce labor standards.