Washington Post
http://www.washingtonpost.com/wp-dyn/articles/A22848-2004Apr18.html
Helping Labor Through Trade
By
Robert B. Zoellick
Monday, April 19, 2004; Page A19
By now the ritual has become familiar. The Bush administration concludes a new free-trade agreement that wins broad support from nearly every sector of the American economy. The pact includes labor and environmental standards and enforcement provisions that far surpass those in other countries' trade agreements. Manufacturers hail the trade accord because it will support well-paid American jobs and spur U.S. exports to an important foreign market. Nevertheless, labor unions condemn the agreement and urge Congress to reject it, claiming that the trading partner lacks adequate labor laws.
Recently this scenario played out again, but in this case the trade agreement was not with a struggling democracy in Latin America, the Middle East or Africa. This time, the alleged villain on workers' rights was, incredibly enough, Australia. Now, this is a country that ranks ahead of the United States and behind only Norway, Iceland and Sweden on the U.N. Human Development Index, a broad measure of social and economic welfare.
This episode revealed the agenda of all too many of those who use foreign labor standards as an excuse to oppose trade. If the United States cannot have free trade with a high-wage, developed country such as Australia, with whom can we trade? In fact, were we to adopt the standards of the economic isolationists, it's not clear we could even have interstate commerce, let alone trade with any foreign country.
Their argument against trade with developing countries is circular: We should not open markets reciprocally with poor countries that have working conditions unlike ours, even though that trade will help overcome poverty and improve working conditions. The reality is that we can do more to improve labor and environmental conditions by promoting trade and economic growth than by isolating poor countries from the global economy.
Some say they support trade, but only if our free-trade agreements include labor and environmental provisions. Then they dismiss the fact that the Bush administration is accomplishing just that. With bipartisan guidance received from Congress in the Trade Act of 2002, the United States has a three-part strategy that is producing measurable improvements in labor rights and environmental protection.
First, partners in our free-trade agreements must commit to effectively enforce their labor and environmental laws. This requirement is backed by an innovative process to review disputes and impose fines on countries that fail to abide by their obligations. The fines are not just penalties: Funds are to be channeled back into fixing labor or environmental problems. The United States is the only country pushing for these kinds of enforceable trade provisions.
Second, we work with countries to upgrade labor and environmental laws and practices. During our free-trade negotiations, Chile reformed its Pinochet-era labor code to conform with international norms. As we negotiated a free-trade agreement with Morocco, the government revamped its labor code and passed laws to combat air pollution and strengthen environmental regulation. During negotiations on the U.S.-Central American Free Trade Agreement (CAFTA), Guatemala markedly improved the application of its labor laws in export processing zones, including combating violence against trade unionists. CAFTA also establishes an independent process through which citizens can raise concerns about environmental issues, helping to build civil societies in developing countries.
Third, we are tackling actual enforcement problems. A recent report from the International Labor Organization found that Central American labor laws are generally in line with international standards. But the best of laws will not help if a poor country lacks the political will or, as is more common, the resources to enforce them.
The best way to help developing countries enforce good labor and environmental laws is through a cooperative effort that becomes endemic. During our trade negotiations, we urge governments to match intentions with resources. El Salvador, for example, expanded its labor enforcement budget by 20 percent and added 50 percent more labor inspectors. But our poorer trade partners need help, so the United States is combining foreign aid with assistance from nongovernmental organizations (NGOs), multilateral development banks and U.S. businesses. Multimillion-dollar projects in Morocco are combating child labor and expanding education opportunities for children. A similar effort in Central America will educate workers about their legal rights and promote ways to resolve labor disputes. We are teaming with the business community and NGOs to improve monitoring of labor standards in garment factories, to train customs officials to intercept shipments of endangered-species products and to promote organic agriculture programs.
U.S. trade agreements reflect American values. The Bush administration's trade policy promotes economic growth at home and abroad, while improving labor and environmental conditions overseas. We cannot bow to the dictates of economic isolationists, whose Sisyphean changing goals only convince poor countries that our concern for labor and the environment is a pretext to shut them out of the American market. To continue producing results that improve lives at home and abroad, we need to extend not a clenched fist but a helping hand.
The writer is the U.S. trade representative.
Trade Pacts: More Talk Than Action for Now
Andrew C. Schneider
971 words
15 April 2004
Kiplinger
Business Forecasts
Volume 2004; Number Week Ending 0416
English
(c)
2004 The Kiplinger Washington Editors Inc. All rights reserved.
BILATERAL DEALS WILL BE DELAYED BY ELECTION-YEAR POLITICS-THOUGH AUSTRALIA WILL PROVIDE A WELCOME EXCEPTION.
With elections looming in November and tough legislative fights under way, Congress has scant interest in trade right now. So why is the White House chasing bilateral trade deals like a coyote hunting jackrabbits? It has more to do with politics than with commerce: President Bush plans to use trade as a lure for developing countries he wants to influence or for others he wants to reward. The impact for U.S. exporters, at least in the short term, will be limited.
Bush also figures-probably rightly so-that if he's reelected, the prospects for trade deals getting through Congress will be far better next year, when election pressures are out of the way. Having a number of bilateral agreements lined up in advance will accelerate the approval process.
In the meantime, though, the window for getting any tariff-cutting deals through Congress this year is rapidly closing. The trade agenda is being overtaken by tough bargaining over a replacement for the extraterritorial income tax break for exporters, which has been condemned by the World Trade Organization (WTO).
Even so, Bush has a good chance to get a green light this year on a free-trade agreement with Australia and possibly on one with Morocco. "After that, it gets very shaky, very quickly" for any more agreements, says Bruce Josten, executive vice president for government affairs at the U.S. Chamber of Commerce.
Fortunately for Bush, the Australian deal is a political positive, offering far more for U.S. companies to gain than to lose. Australia is America's ninth-largest export market if the 15-nation European Union is counted as a single destination. The U.S. has a $9-billion trade surplus with Australia, and the elimination of Australian tariffs could boost American exports Down Under by $2 billion. A wide range of U.S. sectors can expect to benefit, with information technology leading the pack. Autos and auto parts, medical devices, electrical equipment, chemicals, financial services, telecommunications services and advertising can also expect to do well. Among agricultural goods, soybeans, fruits and processed foods are potential winners.
Other pending and prospective trade deals are likely to wait until next year at the earliest. They include free-trade agreements with five Central American nations plus the Dominican Republic, Bahrain, Thailand, Colombia and Panama.
What's more, the administration carries some damaging baggage from the Australian pact that will make it harder to reach meaningful trade deals in the future. To make the Australian agreement more palatable to Congress, quotas for Australian dairy imports will remain marginal, and duties on Australian beef imports will be phased out over a very long 18 years. Sugar is excluded entirely from the pact-a must for Sens. Chuck Grassley (R-IA) and Max Baucus (D-MT), the chairman and ranking Democrat, respectively, on the Senate Finance Committee. Iowa, a top corn producer, benefits from sugar protection because it makes corn syrup a competitive substitute, while sugar beets are a major cash crop for Montana.
All of this sets a poor precedent. Fear of rising sugar imports, as much as fear of job losses and concerns about weak labor and environmental laws, will stifle any chance of Congress turning this year to the proposed U.S.-Central American Free Trade Agreement (CAFTA) covering Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua. The same holds for a deal with the Dominican Republic that the Bush administration hopes to integrate into CAFTA.
Late this month, U.S. Trade Representative Robert Zoellick will open free-trade negotiations with Panama. He'll follow up next month with Thailand and Colombia, the latter as the precursor to an Andean free-trade agreement that could include Peru, Ecuador and Bolivia. Sugar will remain off the table in all negotiations. Indeed, the main reason the recently concluded agreement with Morocco stands any chance of passage this year is because the North African country isn't a sugar producer.
The White House is also dangling trade agreements before Middle Eastern countries that Washington hopes to court or reward. Aside from the Morocco pact and talks with Bahrain, the U.S. has signed trade and investment framework agreements with Algeria, Egypt, Kuwait, Qatar, Saudi Arabia, Tunisia, the United Arab Emirates and Yemen, with a view toward a larger free-trade agreement encompassing the entire region. These countries are not major U.S. trading partners, but the hope is that offering them broader access to the American market will convince them to undertake economic and political reforms that will promote peace and stability.
In its attempt to mollify domestic U.S. lobbies, the White House may undercut its larger agenda of using bilateral agreements to prod countries into action on multilateral negotiations, which have potential for much bigger trade payoffs. The exceptions in the Australia pact and the stalling of CAFTA will hardly encourage Brazil or Argentina to work with the U.S. to revive talks on the Free Trade Area of the Americas (FTAA). (Brazil is the third-largest beef exporter and the third-largest sugar exporter in the world, while Argentina is the eighth-largest beef exporter.) Nor will U.S. moves encourage India, the world's second-largest sugar producer, to yield any ground in the Doha Round of WTO talks.
Neither Brazil nor India will back the liberalization of trade in services, one of Washington's most prized goals for Doha, if some of their own top exports remain largely or entirely blocked from the U.S. market. All of which suggests that the FTAA and the Doha negotiations could well drag on for several more years.
CBI gears up for CAFTA; full-package production, speed to market and flexibility will be major themes of the 2004 Apparel Sourcing Show in Guatemala.(Event Preview: Central American Free Trade Agreement )
Speer, Jordan K.
555 words
1 April
2004
Apparel
9
ISSN: 1543-2009; Volume 45; Issue 8
English
(c)
2004 Information Access Company. All rights reserved.
With the details of the Central American Free Trade Agreement (CAFTA) hammered out and most expecting an easy passage through the U.S. Congress sometime this year, anticipation is high for the CAFTA region to put the gears of its apparel and textile industry into overdrive.
As such, the region's annual Apparel Sourcing Show, to be held May 5-7 in Guatemala City, Guatemala, is expected to be a high-energy event focusing on full-package production, flexibility and integrating the supply chain for greater speed to market.
Carla Caballeros, executive show director of show organizer and apparel association VESTEX, notes that the region is particularly focused on producing "quick runs of low-volume orders of many different styles," with emphasis on providing more value-added services and serving higher-end niche markets.
The exhibition itself, which as of press time included 180 exhibiting companies, will feature a wide range of machinery and technology, textiles, trimmings and services.
An educational program will include seminars on topics including understanding full package, seams and stitches and other sewability factors, knit production development, quick response, improving supervisor effectiveness, textiles, cycle time, quick-turn of samples, inspection methods, fashion trends, body scanning, quality, dyeing and finishing and social compliance.
Additionally, the show's full-package pavilion will feature producers from the five Central American countries, while one of the highlights of the show, says Caballeros, will be its matchmaking program, which will provide appointments between CBI manufacturers and U.S. apparel companies --with a twist.
Unlike in prior years, participants in this year's program will be able to better determine compatibility with each other because of a new strategy whereby U.S. buyers, in advance of the show, are providing potential contractors with garment production details so that they can cost the garment and determine production details ahead of time.
"For example, we are working with Wal-Mart, and they have sent us about 40 product garment packages," she says. Participants in matchmaking sessions now will come to the table armed with much more knowledge about what they can and cannot do, she explains.
Speaking about the apparel industry in Guatemala, specifically, Caballeros says she expects to see apparel exports grow by 25 percent and apparel employment grow by 10,000 during CAFTA's first year of implementation. She also anticipates continued consolidation and a great deal of investment especially with regard to factory expansions.
Also, she noted, the election of Guatemala's new president, Oscar Berger, is generating much positive response. Caballeros remarks that he is "totally pro-private sector" and committed to improving the investment climate.
As for textiles, discussions are under way with U.S. and other international companies to bring investment to the region in the form of fabric knitting and yarn spinning mills. "There are even a few companies that [want] to bring their woven facilities to Guatemala," she concludes.
for more information
Apparel Sourcing Show, Guatemala
[EMAIL PROTECTED]
www.apparelexpo.com <_javascript_:NewWindow( 'http://www.apparelexpo.com' );void(0);>
JORDAN K. SPEER is senior editor of Apparel. She can be reached at [EMAIL PROTECTED]
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