\u201cThe Trans-Pacific Partnership (TPP) is the first trade agreement to subject Vietnam to enforceable labor commitments.\u201d
\nBy Oliver Massmann for The Diplomat
\nApril 20, 2016<\/p>\n
In the last decade, free trade agreements (FTAs) have expanded to cover more than traditional commercial matters like tariff reductions. Recent FTAs have increasingly included labor requirements to protect workers, especially in countries where companies pursue low-cost production through depressed wages, poor working conditions, and other subpar labor standards. This has dramatic effects on countries like Vietnam, where I have practiced law for 20 years. But even though FTAs regulating labor matters have increased dramatically in recent years, from four agreements in 1995 to 72 by 2015, Vietnam has refused to commit to labor requirements in FTAs \u2014 until now.
\nThe Trans-Pacific Partnership (TPP) is the first trade agreement to subject Vietnam to enforceable labor commitments like freedom of association, collective bargaining, and minimum work conditions. Additionally, Vietnam signed a labor implementation plan with the United States that identifies specific actions needed to comply with TPP and which are subject to an additional layer of enforcement. It is clear TPP lives up to its name as a \u201c21st century agreement,\u201d enacting the strongest labor provisions of any trade deal, giving the opportunity to improve living standards and the quality of work for Vietnam\u2019s people. These advances range across a number of different areas:
\nFreedom of Association
\nThe most far-reaching change to Vietnam\u2019s labor landscape is on freedom of association. Currently, Vietnam only recognizes a limited right to organize. Vietnam\u2019s Trade Union Law states that a trade union is a \u201csocio-political organization of the working class and laborers\u2026 part of the political system of the Vietnamese society, placed under the leadership of the Communist Party of Vietnam.\u201d As such, Vietnam does not have a pluralistic union regime. In other words, workers are not allowed to establish more than one trade union focused on protecting their interests regarding their employment. Instead, the only option is to join the one trade union available, Vietnam\u2019s General Confederation of Labor (VGCL), under the direction of the Communist Party.
\nThe VGCL has poorly represented and protected the rights and legitimate interests of its members and workers. In my time here, we have barely seen the presence of VGCL in demonstrations and strikes for social insurance or payment of backwages to hundred of workers when enterprises close down. This inaction is due to the lack of independence and representation in trade union leadership. Essentially, members of VGCL from the district level all the way to the top are government officials instead of workers. This will change with the TPP.
\nArticle 19.3 requires all TPP parties to adopt and maintain regulations that comply with the International Labor Organization\u2019s Declaration on Fundamental Principles and Rights at Work, including freedom of association. This broad requirement is detailed in the U.S.-Vietnam Plan for the Enhancement of Trade and Labor Relations, which lays out the statutes and language for Vietnam to come into compliance with the TPP. Key reforms include provisions that ensure all workers be permitted to \u201cform a grassroots labor union of their own choosing \u2026 without prior authorization\u201d and with the right to \u201cautonomously elect its representatives.\u201d This means that workers can finally organize unions independent from the VGCL that are run by workers. This is significant because it empowers employees to protect their own interest \u2014 particularly when it comes to collective bargaining.
\nCollective Bargaining
\nCollective bargaining is the negotiation between the representatives of the labor collective and the employer to establish working conditions formalized in a collective labor agreement (CLA). As a result, a CLA between employees and employer will define working conditions, labor usage, and obligations of each party in their employment relationship. The CLA serves as the basic document detailing legal requirements in each enterprise and grants workers the chance to negotiate with their employer for labor terms better than statutorily required. As such, a CLA is critical in an employment relationship.
\nGiven their importance, many enterprises in Vietnam have prepared and implemented CLAs. However, many enterprises often use CLAs to temporarily deal with pressure from authorities and include terms contrary to or less favorable than statutorily required. The reason for such low-quality CLAs range from a lack of awareness of procedure to government influence on self-selected union leaders. Given the wide range of issues preventing high-quality CLAs in Vietnam, the TPP makes a number of important reforms.
\nArticle 19.3 requires all TPP parties to adopt and maintain regulations for the \u201ceffective recognition of the right to collective bargaining.\u201d Moreover, the TPP supports better negotiating outcomes by ensuring unions can consult \u201cinternational worker organizations\u201d regarding labor union activities like collective bargaining and securing autonomy of grassroots labor unions from upper-level unions. Combined with the protection for independent association, the TPP gets to the heart of the system plaguing collective bargaining from adequately serving worker\u2019s interests in Vietnam\u2013setting the regulatory framework for improved labor conditions.
\nEnforcement
\nVietnam is held accountable to these labor commitments through TPP\u2019s enforcement mechanism. Like all TPP partners, Vietnam is subject to dispute settlement with the weight of trade sanctions if it systematically fails to uphold its commitments under the Labor Chapter. More significantly, the details in the implementation plan must be completed before any benefits of the trade agreement can flow to Vietnam. Therefore, there are two layers of enforcement specifically for labor obligations: one to facilitate rapid regulatory reform, and another to maintain compliance.
\nWith this comprehensive approach, I am optimistic the TPP will bring positive changes to the labor environment in Vietnam over the next five years. When labor unions finally speak with the voices of workers, there will be improvement in living standards and individual rights. This is exactly what the TPP promises. As such, both the United States and Vietnam must urgently take action to pass the TPP and seize the opportunity for a better civil society in Vietnam.
\n***
\nPlease do not hesitate to contact Oliver Massmann under omassmann@duanemorris.com if you have any questions on the above. Oliver Massmann is the General Director of Duane Morris Vietnam LLC.<\/p>\n","protected":false},"excerpt":{"rendered":"
\u201cThe Trans-Pacific Partnership (TPP) is the first trade agreement to subject Vietnam to enforceable labor commitments.\u201d By Oliver Massmann for The Diplomat April 20, 2016 In the last decade, free trade agreements (FTAs) have expanded to cover more than traditional commercial matters like tariff reductions. Recent FTAs have increasingly included labor requirements to protect workers, … <\/p>\n