The Impact of the TPP, Part One / El Impacto del TPP, Primera Parte

Español abajo

Josh Wise, Minnesota Fair Trade Coalition

For nearly five years now, government bureaucrats and lobbyists on both sides of the Pacific Ocean have been negotiating the Trans-Pacific Partnership (TPP) in secret. Despite claims from the United States Trade Representative (USTR), Michael Froman, that this is going to be a “high-level” agreement that will create lots of jobs, everything we've learned through leaks to the public (which essentially amount to negotiators committing treason just to tell us what our government is proposing) shows that the TPP is poised to become yet another extension of the same failed trade policy and negotiating process that gave us NAFTA, CAFTA and a whole host of other agreements that have accelerated the race to the bottom for labor, environmental and human rights standards. Only this time, it's on a much larger scale.

Free trade advocates point to David Ricardo's theory of comparative advantage as the basis for eliminating trade restrictions. The idea is that if we eliminate government protections for industries, then countries will have to focus on producing what they are most efficient at and everyone pays a lower price for goods while profits are higher because of the efficiency. The reality is that the agreements that have been negotiated so far have been far from free, or even specifically about trade. Instead, what they have amounted to is a host of deregulation, and protections for investors (otherwise known as multinational corporations), which have limited the ability of governments to act in their public interest, whether in terms of labor standards, the environment or public health. This has boosted corporate profits immensely, but has resulted in a race to the bottom for the rest of us in terms of global living standards.

Why is it this way?
Well, it's really inevitable given the way we do trade negotiations. USTR is technically a diplomat, and as such, can keep trade negotiations classified. However, if you lobby the executive branch, you can get appointed as a “cleared adviser” to the negotiations, meaning you can see and influence the proposals. The TPP has more than 600 cleared advisers, many of whom represent major corporations. International treaties, of course, override all conflicting federal and local laws. So what we're left with is a system of lawmaking in which the lobbyists write the laws behind closed doors. It's no surprise then, that the final agreements disproportionately benefit the very same multinational corporations who wrote them.

What are the results?
The North American Free Trade Agreement has been in effect for 20 years as of 2014, and therefore provides the most data to analyze. Since NAFTA was enacted, the US has lost more than 1 million jobs to low-wage labor. And it’s not just low-skilled work that’s going abroad. The auto industry, medical device and chemical manufacturing and even research and development jobs are crossing the border to maquiladoras, where the average manufacturing wage is $2.50 an hour, and labor and environmental regulations are either non-existent or not enforced. Many “low-skilled” jobs, such as those in the textile industry, have long since left, as subsequent World Trade Organization and bi-lateral agreements have sent that work where the wages are even lower, such as Central America and Southeast Asia. The TPP includes Vietnam, where independent unions are illegal, and $2.50 is the average daily wage. The job loss, however, hasn’t just affected the US. Subsidized grain exports have displaced more than 2 million Mexican farm workers (fueling immigration and the drug trade) and millions of acres of land have been expropriated for mining and extractive industries.

Part Two, to be published tomorrow, will delve more into the impact of the TPP and talk about what we as citizens can do to stop it.

El Impacto del TPP

Josh Wise, Coalición por el Comercio Justo de Minnesota

Las negociaciones secretas del Acuerdo Estrategico Trans-Pacifico de la Asociacion Economica o, Trans-Pacific Partnership (TPP) han seguido efectuándose por más de cuatro años. Según las afirmaciones dadas por el Representante Comercial de Estados Unidos (USTR), Michael Froman, el TPP sería un acuerdo “de alto nivel” dando pie a la creación de nuevos trabajos y por ende oportunidades laborales. Sin embargo, toda la información que hemos recibido mediante información que se ha filtrado al público (significando un acto de traición por parte de algunos participantes con el propósito de informarnos lo que propone nuestro propio gobierno) indica que el TPP está a punto de convertirse en otra extensión más del mismo proceso fallido de negociaciones de la política del comercio; los cuales han resultado en muchos otros acuerdos que han acelerado la “carrera hacia el abismo” en cuanto de las normas laborales, ambientales y de derechos humanos. Pero esta vez, en una escala mayor.

Los defensores del comercio libre utilizan la teoría de ventaja comparativa del economista David Ricardo como base teórica para la eliminación de las restricciones del comercio. La idea es que, si eliminamos la protección del estado para ciertas industrias, los países tendrían que enfocarse en la producción de artículos que resulten más eficaces, por consiguiente, todo el mundo pagaría precios más bajos para productos y las ganancias resultarían más grandes por la eficiencia. Sin embargo, la realidad es que los acuerdos actuales se alejan del ideal de “libertad comercial”, perdiendo los hilos conductores y yendo más allá del manejo del comercio. Al contrario, se ha introducido una gran cantidad de desregulación y protecciones para los inversionistas (la mayoría de éstos son corporaciones multinacionales), las cuales han limitado la capacidad de los gobiernos para actuar en favor de los intereses públicos en temas como normas laborales, medioambientales y de salud pública. Es cierto que han resultado en grandes ganancias corporativas, pero a la vez se ha venido generando ésta carrera hacia el abismo para los demás, sobretodo teniendo un impacto en el nivel de vida global.

Por qué es así?
En realidad, estos resultados son inevitables considerando como hacemos las negociaciones sobre el comercio. Según la definición oficial de su cargo, el USTR Froman es un diplomático, y, por esta razón puede mantener en secreto el contenido de las negociaciones sobre el comercio. Sin embargo, si alguien pide a la sección ejecutiva del gobierno, puede conseguir el título de “consejero autorizado” para las negociaciones, lo que significa que se puede ver y ejercer influencia sobre las propuestas. El TPP tiene más de 600 de estos “consejeros autorizados” y muchos de ellos representan corporaciones grandes. Además, los tratados internacionales se anteponen a todas las leyes nacionales y locales – dejándonos con un sistema de creación de leyes en el cual los grupos de presión (lobbyists) escriben las leyes detrás de puertas, por tanto, no deberían sorprender. Entonces, los acuerdos finales benefician desproporcionalmente a las mismas corporaciones multinacionales que los escriben.

Cuáles son los resultados?
El Tratado de Libre Comercio de América del Norte (TLCAN) cumplió 20 años de vigencia este año, y por ser el acuerdo con mayor longevidad, tiene la mayor cantidad de datos para analizar. Desde que se estableció el TLCAN, los EEUU han perdido más de 1 millón de puestos de trabajo a sitios extranjeros de salario bajo. Y el trabajo no especializado no es el único que va para el exterior. Trabajo de la industria automóvil, de fabricación medica y química, y hasta investigación y desarrollo sigue cruzando la frontera a las maquiladoras, donde el salario promedio es $2,50 por una hora, y las normas laborales y ambientales o no existen o no se aplican. Mucho más trabajo no especializado, como el de la industria textil, desapareció hace mucho tiempo, porque los acuerdos bilaterales y los de la Organización Mundial del Comercio han controlado éste trabajo hasta donde el salario es aún más bajo, en regiones como Centroamérica y el Sudeste de Asia. El TPP incluye a Vietnam, donde los sindicatos independientes son ilegales y, $2,50 es el salario promedio diario. Entonces, la pérdida del trabajo no es solamente un tema de EEUU; las exportaciones subvencionadas de granos han causado el desplazamiento a más de 2 millones de campesinos y trabajadores mexicanos (contribuyendo a la inmigración y el tráfico de drogas) y millones de acres de tierra han sido expropiados para usos y explotación minera y de industrias extractivas.

La segunda parte de este post se publicará mañana, éste explorará más a fondo el impacto del TPP y discutirá que podremos hacer nosotros como ciudadanos para detenerlo.

Free Trade: A Primer / Fundamentos de Libre Comercio

Español abajo

Margaret Boehme, WfP Colombia Team

What does Free Trade mean, exactly?
According to The Economist Magazine, it’s “the ability of people to undertake economic transactions with people in other countries free from any restraints imposed by governments or other regulators.”

What kind of restraints?
Tariffs, for instance, which are taxes paid on certain imports or exports.

That doesn’t sound so bad. I don’t want to pay more than necessary for gas, electronics, clothes, wine, or anything else for that matter. So what’s wrong with an agreement?
For one thing, free trade agreements often go beyond tariff-cutting. According to the World Trade Organization, “[Regional trade agreements] provide for increasingly complex regulations governing intra-trade (e.g. with respect to standards, safeguard provisions, customs administration, etc.) and they often also provide for a preferential regulatory framework for mutual services trade. The most sophisticated RTAs go beyond traditional trade policy mechanisms, to include regional rules on investment, competition, environment and labour.”

That’s confusing. I thought you told me earlier that Free Trade meant people could do business with people from other countries without restraints. Here the WTO is saying that free trade agreements are full of regulations and rules. 
It is confusing, and contradictory, too.

Okay, then. So who benefits from these trade agreements?
Corporations, mostly. As Thomas Edsall opined in the New York Times in February, “Free-trade agreements clearly do have a corporatist dimension that is highly vulnerable to pressure from special interests.”

Special interests such as . . . ?
In the case of the TPP, Chevron, Comcast, PHRMA, Halliburton, and the Motion Picture Association of America. These companies have seats on the committee that advises the U.S. Trade Representative on how to negotiate the TPP, even though the negotiations are a secret to the rest of us.

Back up. What is the TPP?
It’s the Trans-Pacific Strategic Economic Partnership Agreement, the largest economic treaty in history, and is being negotiated in secret between 12 countries: United States, Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.

Last November Wikileaks released draft text of all 95 pages of the TPP Intellectual Property Rights Chapter, but the rest of the agreement is secret, even from Congressional representatives that would be voting on it.

Anything of concern in there?
Yes, plenty. After the Wikileaks publication, Nobel Prize winner and former World Bank chief economist Joseph Stiglitz wrote an open letter to TPP negotiators voicing some of his concerns. He said the TPP negotiators should reject certain proposals, such as mandates that extend patent terms and certain mandates that have to do with medicines, surgical operations, and test data for drugs, as well as specific recommendations about copyrights. He said negotiators should resist text that would “restrict access to knowledge”. Read his letter here.

Tell me more.
Okay. In March, Stiglitz wrote:

Provisions already incorporated in other trade agreements are being used elsewhere to undermine environmental and other regulations. Developing countries pay a high price for signing on to these provisions, but the evidence that they get more investment in return is scant and controversial. And though these countries are the most obvious victims, the same issue could become a problem for the United States, as well. American corporations could conceivably create a subsidiary in some Pacific Rim country, invest in the United States through that subsidiary, and then take action against the United States government — getting rights as a “foreign” company that they would not have had as an American company. Again, this is not just a theoretical possibility: There is already some evidence that companies are choosing how to funnel their money into different countries on the basis of where their legal position in relation to the government is strongest. 

In fact, you can read the whole New York Times article, “On the Wrong Side of Globalization”, here.

But if Free Trade Agreements boost U.S. exports abroad, won’t new markets and increased demand create more American jobs?
Well, the Economic Policy Institute released a report in 2012 which said that trade growth between U.S. and China “has had a dramatic effect on U.S. workers and the domestic economy, though in neither case has this effect been beneficial. The United States is piling up foreign debt and losing export capacity, and the growing trade deficit with China has been a prime contributor to the crisis in U.S. manufacturing employment.” According to their report, the growing U.S. trade deficit with China cost the U.S. more than 2.7 million jobs between 2001 and 2011. Similarly, a recent report from Public Citizen states that the North American Free Trade Agreement (NAFTA) created a net loss of one million U.S. jobs over the last 20 years due to outsourcing. That’s a lot of lost jobs.

Wait, what’s outsourcing again?
At a basic level, it just means contracting certain job functions to a third party. Under Free Trade Agreements, large companies have more freedom to offshore-outsource, that is, to send production jobs and even services (like call centers) to countries where labor is cheaper and there are fewer mandated worker protections, and human rights, safety and environmental regulations. Economists term this a “race to the bottom,” since it consists of companies and countries competing with each other to see who can cut costs the most, to the detriment of workers. The goods and services produced under outsourcing are then re-exported to global markets—including those U.S. workers who are now out of a job and have less purchasing power.

In conclusion, Professor Stiglitz?
“Trickle-down economics is a myth. Enriching corporations — as the TPP would — will not necessarily help those in the middle, let alone those at the bottom.”


Fundamentos de Libre Comercio

Por Margaret Boehme, Equipo de APP Colombia

¿Qué significa Libre Comercio, exactamente?
Según la revista The Economist, es “la capacidad de las personas para llevar a cabo las transacciones económicas con personas de otros países libres de cualquier restricción que imponen los gobiernos u otros organismos reguladores.”

¿Qué tipos de restricciones?
Los aranceles, por ejemplo, que son impuestos pagados por algunas clases de importaciones y exportaciones.

No suena tan mal. No quiero pagar más de lo necesario por petróleo, electrónicos, ropa, vino, ni ninguna otra cosa. ¿Entonces cuál es el problema con un acuerdo?
De un lado, los acuerdos comerciales regionales (ACR) frecuentemente tienden a ser mucho más que ejercicios de reducción arancelaria. Según la Organización Mundial de Comercio, los ACR “contienen disposiciones cada vez más complejas que rigen el comercio intrarregional (por ejemplo, en relación con las normas, las cláusulas de salvaguardia, la práctica aduanera, etc.) y con frecuencia también prevén un marco normativo preferencial para el comercio mutuo de servicios. Los ACR más sofisticados van más allá de los mecanismos de política comercial tradicionales e incluyen normas regionales en materia de inversiones, competencia, medio ambiente y mano de obra.

Eso es confuso. Pensé que me dijiste antes que Libre Comercio significa que las personas pueden hacer negocios con personas de otros países sin restricciones. Aquí el OMC está diciendo que los tratados de libre comercio están llenos de regulaciones y reglas.Es confuso y contradictorio también.

Bueno, pues. ¿Quién se beneficia con estos acuerdos de comercio?
Las corporaciones, más que todo. Como Thomas Edsall opinó en el New York Times en febrero, "Los acuerdos de libre comercio claramente tienen una dimensión corporativista que es altamente vulnerable a la presión de intereses especiales".

¿Cuáles intereses especiales?
En el caso del TPP, Chevron, Comcast, PHRMA, Halliburton, and the Motion Picture Association of America. Estas compañías tienen asientos en el comité que conseja al Representante de Comercio de EE.UU. como negociar el TPP, aunque las negociones son secretas para los demás.

¿Espera. Qué es el TPP?
El Acuerdo Estratégico Trans-Pacífico de Asociación Económica, el tratado económico más grande en la historia. Está en proceso de negociaciones secretas entre 12 países: Estados Unidos, Australia, Brunei, Canadá, Chile, Japón, Malasia, México, Nueva Zelanda, Perú, Singapur y Vietnam.

En noviembre del año pasado, Wikileaks lanzó un borrador de las 95 páginas del capítulo de Propiedad Intelectual TPP, pero el resto del acuerdo es secreto, incluso para los representantes del Congreso quienes votarán por él.

¿Algo de preocupación en ello? 
Sí, un montón. Después de la publicación de Wikileaks, Joseph Stiglitz, quién es ganador del Premio Nobel y ex economista jefe del Banco Mundial, escribió una carta abierta a los negociadores del TPP expresando algunas de sus preocupaciones. Él dijo que los negociadores del TPP deben rechazar ciertas propuestas, como los mandatos que se extienden a las patentes y ciertos mandatos que tienen que ver con medicamentos, intervenciones quirúrgicas, y los datos de las pruebas de los medicamentos, así como recomendaciones específicas sobre los derechos de autor. Él dijo que los negociadores deberían resistir el texto que "restringir el acceso al conocimiento".

Dime más.
Bueno. En marzo Stiglitz escribió en el New York Times:

Disposiciones ya incorporadas en otros acuerdos comerciales se están utilizando en otros lugares para socavar las regulaciones ambientales y de otro tipo. Los países en desarrollo pagan un precio muy alto por la firma de estas disposiciones, pero la evidencia de que reciban más inversiones a cambio es escasa y controvertida. Y aunque estos países son las víctimas más evidentes, la misma cuestión podría convertirse en un problema para los Estados Unidos, también. Corporaciones estadounidenses concebiblemente podrían crear una filial en un país del Pacífico, invertir en los Estados Unidos a través de esta filial, y luego tomar medidas contra el gobierno de los Estados Unidos - obtener derechos como empresa "extranjera" que no habrían tenido como una empresa estadounidense. Una vez más, esto no es sólo una posibilidad teórica: Ya existe alguna evidencia de que las empresas están optando por la forma de canalizar su dinero en diferentes países sobre la base de que su situación jurídica en relación con el gobierno es más fuerte.

Pero si los Tratados de Libre Comercio impulsan las exportaciones estadounidenses en el extranjero, será que los nuevos mercados y el aumento de la demanda crean más empleo en Estados Unidos?
Pues bien, el Instituto de Política Económica publicó un informe en 2012 que dijo que el crecimiento del comercio entre EE.UU. y China "ha tenido un efecto dramático en los trabajadores estadounidenses y la economía nacional, aunque en ninguno de los casos ha sido este efecto beneficioso. Estados Unidos está acumulando la deuda externa y la pérdida de capacidad de exportación, y el creciente déficit comercial con China ha sido un contribuidor principal a la crisis del empleo manufacturero de los EE.UU”. Según su informe, el creciente déficit comercial de EE.UU. con China le costó a los EE.UU. más de 2,7 millones de puestos de trabajo entre 2001 y 2011. Del mismo modo, un informe reciente de Public Citizen afirma que el Tratado de Libre Comercio de América del Norte (TLCAN) creó una pérdida neta de un millón de empleos en Estados Unidos en los últimos 20 años debido a la externalización. Eso es un montón de puestos de trabajo perdidos.

¿Espera, me explicas qué es la externalización de nuevo?
En un nivel básico, sólo significa la contratación de ciertas funciones de trabajo a un tercero. Bajo acuerdos de libre comercio, las grandes empresas tienen más libertad para externalizar offshore, es decir, para enviar los trabajos de producción e incluso los servicios (como los centros de llamadas) a países donde la mano de obra es más barata y hay menos protecciones obligatorias de los trabajadores y los derechos humanos, la seguridad y las regulaciones ambientales. Los economistas denominan esto como una "carrera hacia el fondo", ya que se compone de las empresas y los países que compiten entre sí para ver quién puede reducir los costos al máximo, en detrimento de los trabajadores. Los bienes y servicios producidos bajo la externalización se vuelven a exportar a los mercados mundiales, incluyendo a los trabajadores de Estados Unidos que ahora están sin trabajo y tienen menos poder adquisitivo.

¿En conclusión, profesor Stiglitz?
“La economía de la filtración’ es un mito. Enriquecer corporaciones - como el TPP podría - no necesariamente ayudar a aquellos que están en el medio, por no hablar de los de abajo.”

 

The Reality of Free Trade in Mexico

by Sophie Nikitas

The Mayans had a myth to explain the creation of humans: the gods tried three times to make the first human. The first time, they tried to make it out of clay; the next time, out of wood, but neither was satisfactory to them. So they tried one more time; this time, they used corn. Finally they succeeded in creating a human who could work the land and worship the gods. This story is just one example of the importance of corn—not just as food, but as an integral part of Mexican culture and identity. 

Mexico is home to around 60 varieties of native corn,
which are under threat from GMO's. Transnational
companies like Monsanto are favored under NAFTA.

I witnessed this importance first-hand when I traveled to Mexico in January with Witness for Peace. I went as part of a program that examined how free trade between Canada, the US and Mexico affected the region of Oaxaca in particular. My colleagues and I learned about the effects of NAFTA, particularly via trade between US and Mexico, and how different those effects were from what the US government portrays them to be. In particular, I saw how free trade is affecting the production of, and access to corn. 

The US government largely focuses on the benefits stemming from the free trade agreement. For example, one of NAFTA's main goals was originally to improve the Mexican economy by giving farmers, a large portion of the workforce, the opportunity to sell their goods on a larger, international market. Tied in with that was the aim to encourage Mexico's "development", particularly by giving agricultural workers access to affordable crops and allowing them to work in more lucrative and less labor-intensive sectors of the economy. In 1994, with those goals in mind, the US, Canadian and Mexican governments lifted tariffs on non-domestic products sourced from the other countries, and free trade between the three began. 

This year marks the 20th anniversary of NAFTA. Mexico is certainly different from before the agreement, but not in the way that was anticipated. In reality, NAFTA's policies have made Mexico more dependent on the economy and resources of the US, and the result is that many of the Mexicans who were predicted to benefit have become less self-sufficient than before. Corn farmers have been particularly hard-hit. Despite being considered "poor" by the Mexican and US governments, mostly due to the lack of expendable capital, Mexican corn farmers were actually fairly self-sufficient before the agreement. Their ability to grow their own food provided a certain degree of food security and control over the local markets. However, policies aimed at promoting "development" have made it more challenging for many farmers to grow corn and other essential crops, in favor of promoting other sectors of work. 

In order to encourage the "development" (and I keep putting this word in quotes because US standards for development are not synonymous with improvement in food security and general quality of life), the Mexican government began importing cheap corn from the US in order to push corn farmers to seek work in other sectors. It's important to note that, although NAFTA includes provisions against government subsidies of crops, which would disrupt the price competition between producers across the countries involved, the US continues to subsidize the production of corn. This allows US farmers to export their corn to Mexico at such low prices that Mexican farmers cannot compete, and, as a result, must find a different source of immediate income. 

The option that the Mexican government presented was encouraging farmers to move to cities for work, particularly in "maquiladoras". Maquiladoras are factories within "Free Trade Zones" that provide cheap labor for companies operating transnationally. Despite the supposed benefits of this type of work, maquiladoras provide neither the financial or bodily security that many Mexican farmers had when they produced their own crops.

Maquiladoras multiplied in Mexico with NAFTA. They are criticized for serious environmental pollution, dangerous working conditions, low pay, and discriminatory practices like only hiring young women, forcing them to take pregnancy tests (and then firing them if they're positive), and preventing union organizing.

In order to get contracts with large companies, maquiladoras must offer the lowest production prices. This is called "race to the bottom", when factories try to offer prices low enough that companies will use them instead of sourcing their manufacturing to factories in India, for example. Because of this desire to cut costs, maquiladoras are well-known for their dangerous conditions. Employees often work long hours  without proper training, equipment or protection from chemicals or machines that they use. On top of that, they receive a fraction of an equivalent US salary for their work. 

NAFTA's defenders argue that maquiladoras have created 800,000 new jobs for "poor" Mexicans, but in reality maquiladoras are a much worse option than typical corn farming. The lack of safe conditions, financial security and the autonomy to grow and access one's own food are not part of public statements, nor the two million agricultural jobs that were lost in order to encourage work in maquiladoras. As a result, there are many people in Oaxaca, as well as throughout Mexico, fighting against these policies.

One of several fair trade certifications.

Our group met with several Oaxacan cooperatives: one that I learned the most from was called Michizá. This cooperative works with indigenous coffee farmers in order to sell their products on the fair trade market, both in Mexico and the US. One of their main barriers, they told us, was the cost of obtaining a free trade certificate. When the goal is to get the profit to the producers, the cost of obtaining fair trade certification for US markets can impede that process. As a result, it is much more expensive to sell that coffee in the US, where there is more demand for coffee than in Mexico, where it is often less expensive.

The most striking thing about the presentation was the recurring theme of how difficult it was for farmers to get compensated for their work when they sold on the international market, even though that route is so encouraged and supposedly easier under NAFTA. This seems to be the biggest challenge in free trade: expanding opportunities and new markets for producers while ensuring that they reap those benefits. I think that working within larger systems, like corporations and larger fair trade certification agencies, makes it easier to forget who produced the product we are consuming. On the other hand, working on a smaller scale—maybe local, maybe a smaller company—can ensure that consumers like me know where our products are coming from, and that, just as I am getting something from the producers, they are receiving back from me. 

The Human Face (and Price) of Trade

The Witness blog series is back!

This month, Witness for Peace, in close collaboration with coalition partners in the United States and partners on the ground in Colombia, Nicaragua, Honduras and Mexico, is hosting our second annual blog series – this one focused on the changing system of international trade and its effects on communities both small and large.

When most people hear the word “trade,” their eyes already start to glaze over, visions of tariffs and collective bargaining agreements dancing in their hands. This is understandable – at first, trade doesn’t exactly seem like the most exciting topic, tied up as it is with broader issues of economics, national sovereignty, imports/exports and labor rights. However, trade has implications that reach far beyond the entrances to ports and meeting halls – really, if you’ve ever bought anything or had a job, trade has affected you in some way. Over the course of the next month, we’ll be using this space on the Witness blog to explore the many ways trade changes lives, livelihoods and environments, from small-scale farmers in the U.S. Midwest to port workers in the Colombian city of Buenaventura.

The topics of free trade, unions, workers’ rights and economic policy have become increasingly important throughout the Americas since the North American Free Trade Agreement (NAFTA) went into effect in 1994, creating a trade bloc between the U.S., Canada and Mexico, and opening the door for subsequent economic policies and practices that prioritized corporations and multinational companies over unions and workers themselves. Since then, such agreements have spread across the region, with the U.S. signing free trade accords with countries including Chile, Peru, Colombia and the majority of Central America.

Though supporters in governments and the business world insist that such agreements help boost competition and encourage sales, the truth is that the few individuals and corporations at the top are those that truly profit, while laborers, farmers and small businesses see few of the benefits and are often left worse off than they were before the agreement took effect. Such agreements lead to lower prices on imported goods that  leave local businesses unable to compete without incurring significant losses; allow much greater influence for multinational corporations; facilitate widespread third-party contracting; and encourage extensive outsourcing in a "race to the bottom." These effects are well-documented, and some communities are refusing to simply accept them as inevitable. Last August, Colombia’s farmers began a national strike that quickly spread across the country and reached the largest cities, primarily as a response to the negative effects the U.S.-Colombia free trade agreement, signed in 2011, had on their communities and their livelihoods.

Well-researched critiques and comprehensive analyses of such agreements are now more important than ever, with the U.S. on the verge of signing the Trans-Pacific Partnership, which would become the most far-reaching trade agreement in the hemisphere and grant a staggering amount of rights and privileges to corporations and business interests, potentially even overriding national sovereignty and laws in some cases. Through this blog series, we will examine the effects and lessons learned from current trade agreements and labor practices throughout the Americas, and hope to shed some light on the potential regional and global impact of the TPP as well as bring more attention to what’s happening in our own backyards and in thousands of other cities and towns across the continents.

Check back here every weekday for bilingual posts highlighting some of the effects free trade agreements and changes in trade and labor policy have had on individuals and communities throughout the Americas, and how some of our writers have seen those changes reflected in their own lives and the lives of others. Feel free to take a look at our 2013 Drug War blog series as well.

"Immigration Problem"

Spoken word by Hillary Watson (delegate of a WfP delegation in Colombia) about U.S policy with Latin America and the consequent "immigration problem."

Labor Action Plan Monitoring Report

This is a Labor Action Plan Monitoring report done by Witness for Peace delegates and International Team this past July. It includes the on-the-ground labor reality for Colombian workers now that the Free Trade Agreement between Colombia and the U.S. has been implemented. The report includes specific recommendations and case studies  for U.S. officials, policymakers and civil society to track where labor law is not complied with and bring about effective change set out by U.S. and Colombian labor accords.

Labor Reality in Colombia

Continued Violations of the Colombian Action Plan Related to Labor Rights:

Witness For Peace July 2012 Delegation Report

August 1, 2012

Introduction:

The purpose of this report is to convey the findings and recommendations of the Witness for Peace delegation that conducted an independent investigation of labor rights in Colombia from July 20-30, 2012. Our ten-person delegation was comprised of two full-time Witness for Peace staff living in Colombia and eight delegates from the United States including trade unionists, educators, activists, and NGO workers. This delegation specifically aimed to assess the implementation of the Labor Action Plan now that the U.S. – Colombia Free Trade Agreement is in effect. Through meeting with affected groups and advocacy organizations, we found multiple and egregious violations of the plan in the areas of Cooperatives, Collective Pacts, and Violence and Impunity, as well as a lack of response to the troubling consequences of the FTA for women in Colombia. As the United States is now complicit in these labor rights violations, we ask that the U.S. Embassy do everything in its power to act on this information to remedy the continued violations of the Labor Action Plan.

I. Cooperatives

The Colombian Action Plan Related to Labor Rights intended to prohibit the misuse of subcontracting by cooperatives and temporary service agencies. Witness for Peace July 2012 delegation has found that they have been replaced by new and just as prevalent forms of intermediary employment and third party contracting. The Labor Action Plan identifies the port sector as a priority. Buenaventura illustrates the egregious labor violations of this plan. Our visit to the port provided clear examples of noncompliance with the Labor Action Plan through a variety of methods:

New forms of subcontracting

A Simplified Stock Association (SAS) is a new form of subcontracting agency that has replaced cooperatives. The port of Buenaventura and Sociedad Portuaria is especially dramatic in this regard with over 700 intermediary companies such as Simplified Stock Associations.

·        Compania Servicios Portuario Esapecializada (CSPE) is one of many SAS operated by the pro-managerial union Sintramaritimo. More and more of these “unions” are adopting subcontracting mechanisms as a means of skirting around the cooperatives. CSPE is an important example that limits workers’ rights by preventing direct contracts with corporate employers which would provide direct accountability and stability. Workers employed through CSPE have been denied their legitimate benefits and job security through their employment by a third party contractor.

·        The cooperative Coowinpropa reinvented itself as a SAS named Artica. Then it transformed itself once more into another SAS called Ecpe. However, the owner remained the same in all three forms. This not only prevented direct contracts, but it also imposed temporary employment.

Conditions on Direct Contracts

The most common demand by port workers is a direct contract relationship with the corporations.

·        Often direct contracts place conditions on workers; most commonly workers are forced to agree to not join or to withdraw from the Union Portuaria (otherwise known as a “yellow dog contract”). TECSA, in addition to employing workers through intermediaries, enforced the condition that workers not be represented by the Union Portuaria in its direct contracts with workers. Intermodal S.A.S. required that workers not be represented by the Union Portuaria and demanded that workers withdraw their complaints from the Labor Ministry. Prodeco offered workers direct contracts only if they withdrew from the union and kept their contracts secret.

Expansion of Precarious Work

According to the Labor Action Plan, temporary work arrangements are not to be used to undermine labor rights.

Workers with Intermodal S.A.S. report that even when they receive a direct contract, the duration rarely exceeds 4-6 months. These short term contracts enable a high turnover of workforce and maintain low wages, poor working conditions, meager benefits and the inability to accumulate seniority.  

The Labor Action Plan requires direct contracts and steady work for “permanent core functions.”  However, workers report that the short contracts and new intermediaries are eroding job security even in areas of core function of the port.

Proliferation of Competing Unions

The creation of competing unions undermines workers’ collective bargaining rights. Many of these unions have only a small number of members and receive preferential treatment from companies. In Buenaventura, for example, Sintramaritimo, is described by workers as a “sindicato patronal,” because it collaborates with the company to undermine negotiations. It also received resources from the mayor’s office for rent in the amount of 1,500,000 pesos.

Non-compliance

As pointed out by the previous Witness for Peace delegation in February, there is an ongoing problem with inspections.

Even though the Colombian government complied with the hiring of additional inspectors, they are not trained adequately to identify these new forms of subcontracting.  When fines are imposed they are inadequate in amount (a 56 million peso limit), they can be appealed interminably, and they do not deter corporations from repeat violations.  For large multinationals the fines are not a deterrent and for smaller companies it justifies bankruptcy and leads to reincorporation without improvement of labor conditions for workers.

In fact, of the 91 fines imposed, no fines nor any criminal sanction for anti-union violence have been carried out.  (See the list of imposed fines attached.)

Under Section III Part B, the “strategy of offering to waive fines wholly or in part when the employer agrees to create and maintain a direct employment relationship” allows the companies to get away with their violations.

In requests for clarification of Decree 2025, the Labor Ministry has exempted the very forms of labor outsourcing that are meant to be prevented by the Labor Action Plan.

Additional Concerns

We have serious additional concerns about the labor and human rights conditions at the port and in Buenaventura:

·        Ongoing death threats against union leaders

·        Blatant racism by employers of Afro-Colombian workers

·        Lack of social investment by the port companies in the community

·        The increase in sexual violence against women and child prostitution

Recommendations

·        Advocate for broader language and clearer interpretation of labor law to include all forms of third party subcontracting and outsourcing 

·        Train more labor inspectors to ensure frequency of inspection, monitoring, and follow-up

·        Promote compliance through the application of fines and criminal penalties since no fines nor any criminal sanction for anti union violence have been carried out.

·        Secure the increase in direct employment relationships without conditions that undermine “the right to organize and bargain collectively”

·        Protect threatened unionists and issue an immediate embassy denunciation of any act of violence against workers

II.  Collective Pacts

Another key issue undermining freedom of association in Colombia is the continued use of collective pacts and the lack of enforcement to prevent such pacts.

As you are aware, Section V of the Labor Action Plan provides for reforming the Criminal Code of Colombia to criminalize collective pacts that are used to undermine the right to organize. In addition, the Labor Action Plan says that the Ministry of Social Protections, now the Labor Ministry, “will implement a robust enforcement regime . . . to detect and prosecute violations.” Unfortunately, these provisions of the Labor Action Plan on collective pacts are not being fulfilled.

In collective pacts, workers are offered short-term benefits and improved working conditions in exchange for renouncing their right to join an independent labor union, effectively removing their right to organize and allowing the company to dictate all conditions of employment. Without an independent labor union to represent workers’ interests, workers cannot effectively defend their rights and enjoy full protections of the labor code.

General Motors Colombia is one company that continues to use collective pacts to the detriment of labor rights. Since 2003, GM Colombia has signed a collective pact with workers every two years, with the last one signed in January of 2012. At the signing this year, GM workers were incentivized with money to sign the pact, which explicitly prohibits them from joining an independent union. Workers were told that their continued employment was dependent on signing the pact, so in fact they had no choice but to accept the imposed conditions. The individuals who ostensibly represented the workers were not elected and instead were appointed by GM management.

The lack of independent labor representation for GM workers has exacerbated conflicts between workers and management and left many workers subject to illegal firings. For example, workers have documented systemic patterns of illegal terminations due to workplace injuries, including debilitating conditions requiring major surgery that limit mobility and employment options for workers. Company practices included the sharing of medical records from the company clinic doctors with management, who then fired workers based on this confidential information.

Both General Motors Colombia and the Ministry of Labor were complicit in the illegal firing of injured workers. In the last year, worker complaints prompted the Labor Ministry and the Procuraduría to investigate these firings and concluded that GM had violated labor law. In a follow-up investigation, workers’ medical records disappeared from company files, and the Procuraduría was not present as required by law.  Moreover, the labor inspector who signed off on the firings, as well as the GM lawyer, have been sanctioned by the Attorney General for their illegal actions.

These illegal firings led to the formation in May 2011 of the Association of Injured Workers and Ex-Workers of General Motors Colombia (ASOTRECOL). The founder of this organization, Jorge Parra, was fired two months later in retaliation for exercising his right to freedom of association. Without effective union representation, these workers have taken their grievances to the public by protesting in front of the U.S. Embassy. These workers are seeking reinstatement to jobs appropriate to their physical abilities; the right to form a labor union; and pensions for those workers too ill to resume employment based on their workplace injuries.

The continued existence of collective pacts and the systemic failure to prosecute labor violations indicates that the Labor Action Plan has not been implemented in full as required by U.S. Congress with the passage of the Colombian Free Trade Agreement. As concerned U.S. citizens who are closely monitoring the labor and human situation in Colombia, we request the U.S. Embassy to take the following actions:

§      Investigate the collective pact signed by General Motors with its workers that undermines their rights to organize

§      Press the Colombian government to prosecute those illegal actions under the new criminal code implemented as part of the Labor Action Plan

§      Resume discussions with ASOTRECOL and assist in the resolution of the labor conflict between GM and these illegally fired workers by advocating for the reinstatement of these workers, pensions for those with disabilities that prevent their employment, and the formation of an independent labor union

§      Work with the Colombian government to ensure the “robust enforcement” required by the Labor Action Plan Section V is carried out

III.  Violence Against Trade Unionists, Impunity for Offenders

            Colombia is known for having the highest rate of violence against trade union members and labor activists. While we believe that the initiatives included in the Labor Action Plan, such as broadening the definition of who is covered in the Colombian government’s protection program and the implementation of criminal justice reforms are a step in the right direction, we are still extremely concerned with the levels of impunity, violence and threats within the labor sector. In spite of the intended additions of 95 judicial police investigators and 480 new labor inspectors, there are abundant cases of union-related violence, threats, and other forms of intimidation towards union leaders.

            Even after both the Colombian and United States governments signed the Labor Action Plan in April 2011, labor leaders have been victims of over 500 death threats and 29 assassinations. One such case is that of Daniel Aguirre, the Secretary General and founder of SINALCORTEROS. Mr. Aguirre was assassinated on April 27, 2012 and to this date no justice has been served. Immediate action is necessary to solve this case and bring justice to the perpetrators since Mr. Aguirre is the first union leader to be killed since President Obama declared implementation of the free trade agreement.

            Other assassinations this year include that of Mauricio Redondo of USO, who was killed along with his wife on January 17 in Puerto Asis, Putumayo, and Alexander Gonzales Blandon of SINTRAENTEDDIMCCOL who was murdered on January 19, 2012 in Bugalagrande, Valle del Cauca. In 2011, the death of SINALTRAINAL member John Fredy Carmona, whose body was discovered on December 9 in Medellin, and the paramilitary attack of SINALTRAINAL Executive Committee Member Juan Carlos Galvis on November 9 have not been sufficiently investigated.

            We are concerned that these deaths will only be further additions to the backlog of cases that have perpetuated impunity in Colombian society. Such cases include Luciano Romero of SINALTRAINAL, who was stabbed to death in 2005. In fact, in SINALTRAINAL’s thirty years of existence, 24 union members have been killed, 2 disappeared, 14 imprisoned, 80 death threats received, 49 forcibly displaced, 6 exiled, and several attacked. These acts of violence against unionists are met with widespread impunity: of the 2,886 trade unionists murdered since 1986 less than 10 percent have led to a conviction. The impunity rate remains intolerable even for violence that has occurred after the passage of the Labor Action Plan.

            The continued persecution of trade unionists and labor activists is further amplified considering the fact that only 3.9% of the Colombian workforce is unionized. Death threats are another method used by re-armed paramilitary units, who in some cases cooperate with multinationals, to inculcate fear among union leaders and labor activists. The very same week that the FTA went into effect, the following labor union leaders and their families’ received death threats:

·        Jhon Jairo Castro of Union Portuaria (Port Workers’ Union)

·        Johnnson Torres Ortis of SINALCORTEROS

·        Rene Morales Silva of SINTRAINAGRO

This year, leaders of SINTRAEMCALI were threatened by the paramilitary group the Black Eagles. SINTRAINAGRO has received 13 death threats and union member Henry Diaz was disappeared.  

            Given the alarming rates of persistent threats and acts of violence, we have noticed that the implementations of the protection programs and judicial reforms delineated in the Labor Action Plan have not been achieved.  It is imperative that the Colombian government, with the support of the United States, ensures their compliance with the specific programs and initiatives outlined in the Labor Action Plan.

IV.  The Omission of Women's Voices in the US-Colombia Free Trade Agreement

The concerns of Colombian women were not taken into consideration with the development and passage of the FTA, either through a government study or listening to the case of the women's movement.  Without the inclusion of specific protections for women, the FTA cannot stand as a just document.  The obligation to reduce discrimination against women is present in the Colombian Constitution as well as various international humanitarian agreements, but is absent from the FTA.  Discrimination based on gender is rampant in Colombia, and has worsened during the past five years of free trade negotiation.  According to a 2007 NGO report, the salary gap between men and women holding the same position was 14.28%.  According to the women's division of the Central Unitario de Trabajadores (CUT), the rate has doubled to 28.9% today.  Additionally, the increased economic inequality and instability caused by the FTA forces more people (especially women) to work in the precarious informal sector, without healthcare, contracts, or protection from the Labor Action Plan.

The major concerns held by women of the Sabana of Bogota during their First Popular Women's Assembly surrounded threats to the environment and the local economy. The government does not monitor the flower industry's water or soil pollution, or hold companies responsible for these negative externalities.  The displacement of food crops for monoculture and flower production has decreased agricultural job opportunities, and created precarious employment where wages are suddenly lowered or hours reduced.  Despite being hailed as one of the most unionized industries in Colombia, due to the prevalence of sindicatos patronales which are headed by the company,  the union Untraflores is alone in truly seeking to protect workers’ rights.   Furthermore, cheap agricultural imports have destroyed women's capacity to compete with their own micro-economic agricultural enterprises. 

The women most disproportionately affected by the FTA are indigenous and Afro-Colombian, as well as poor campesina women in rural areas, because of displacement by armed groups or multinational economic interests. Colombia has the highest rate of displacement in the world, and many indigenous communities are on the verge of extinction.  According to a leading indigenous organization in Cauca, more than 6,000 people have been displaced in their region this year alone.  Community leaders are concerned that this generation of children has only known violence, and child recruitment continues to be a serious problem. The ethnic rights of indigenous and Afro-Colombian communities protected by the International Labor Organization (ILO) decrees were ignored by the parties who approved the FTA without consulting either community.  

Signed:

Mary Bellman

Bethany Carson

Amanda Ciafone

Kate Dillon

Jessica Hayssen

Omar Martinez

Ruth Needleman`

Robert Winslow

Carlos Cruz, Witness For Peace International Team

Jessica Weinstein, Witness for Peace International Team

Fired GM Workers Commemorate Protest’s Anniversary with Hunger Strike

By Austin Robles

WFP Colombia

ASOTRECOL on strike for 365 days, since August 1st

Minutes before he started to sew his mouth shut, Jorge Parra explained his rationale to me: “Essentially GM gave us a choice: to die of hunger or to die waiting for them to solve this problem.”

One year ago, on August 1st, 2011, several dozen workers from General Motors Colombia (Colmotores) started a protest in front of the U.S. Embassy in Bogotá. The Association of Injured Workers and Ex-Workers of Colmotores (ASOTRECOL) had two simple demands: fair compensation for injuries incurred in the workplace and reintegration into GM’s workforce.  In commemoration of their protest’s anniversary, and without advancement in their case, four leaders of ASOTRECOL decided to sew their mouths closed and initiate a hunger strike.

ASOTRECOL workers claim that they were among 200 employees injured on the job in GM’s plant in Colombia’s capital city. The majority of ASOTRECOL’s members have undergone multiple surgeries, most commonly to treat spinal injuries, tendinitis, carpal tunnel, rotator cuff syndrome, and lumbar damage. After working their bodies until they were disabled and unable to perform manual labor any longer, GM fired them and refused to pay medical benefits or a severance package. ASOTRECOL also alleges that GM lost, altered, erased, or fabricated their medical histories to exclude their injuries from the company’s official records. Consequently, GM does not accept the injuries as work-related, instead claiming that they were incurred under normal circumstances outside the plant.

Carlos Ernesto Trujillo Rojas

Having seen no progress in their case over the past year, four members started a hunger strike on August 1st, 2012. Another set of members will join by sewing their mouths closed each week until their case is resolved. The dramatic move reflects their growing desperation. Before receiving six stitches in his lips, Carlos Ernesto Trujillo Rojas explained that the workers can not wait any longer. “They fired us without just cause, endangering us and our families. We are taking this decision because our health has worsened each day, we’re losing our houses, we practically live in the street, and we’ve been forgotten by the government.”

Inaction by the United States

ASOTRECOL’s case is especially alarming considering the U.S. government’s stake in General Motors. Two years before ASOTRECOL began its strike, GM filed for bankruptcy protection and reorganization with the United States government. It was the fourth-largest Chapter 11 filing in U.S. history, and the U.S. government became the company’s largest shareholder with 60% ownership. Failing to stay afloat after the Bush Administration pumped $20 billion into GM in 2008, the Obama Administration shelled out another $30 billion in taxpayer dollars in 2009.  At the start of 2012, the U.S. still had $25 billion invested in GM.

GM seems to have recovered from its financial turmoil and was this year restored to its position as the largest automobile manufacturer in the United States.  However, billion-dollar quarterly profit margins for GM did not translate into willingness to settle the small claims of ASOTRECOL members.

The U.S. government has maintained silence on GM’s situation as well, despite its pledges to support labor rights in the South American country. The U.S. walked a tight rope this past year as the Obama Administration tried to convince Congress to pass a free trade agreement (FTA) with Colombia. Signed by the Bush Administration, the FTA stalled for years in Congress due to concerns over the trading partner’s labor rights record. According to Garry Leech, almost 75% of the world’s union leaders killed in the last 20 years were Colombian, and less than 5% of these killings result in a conviction. In 2011, out of 76 union leaders killed globally, 29 were Colombian.

Despite Colombia’s record as the “most dangerous country in the world to be a unionist,” the U.S. government passed the FTA, which went into effect in May 2012. The countries implemented an Action Plan for Labor Rights to provide enhanced protection for Colombia’s most at-risk industries. Still, seven unionists have been killed in Colombia this year, and many more have received death threats.

ASOTRECOL is a case in point for labor rights violations in Colombia. Their situation is all the more deplorable given the U.S. government’s promises to protect labor leaders while at the same time remaining one of GM’s largest shareholders. Although ASOTRECOL’s case is little-known in the United States, U.S. taxpayers are de facto GM shareholders. The U.S. government should recognize its two-sided stance on this case and pressure GM to stop ignoring these workers before they die of starvation. Jorge and other fired workers’ resolve in their hunger strike is evident. “We are set to continue until the final consequences,” he declared. “May God accompany us and help us.”

Workers from GM Colombia dying of hunger with their lips sewn shut.

Take action! Send a message to your representatives demanding accountability for your tax dollars!