AEI’s Claude Barfield posted an insightful comment on the new labor requirements the U.S. foisted on Colombia in connection with the U.S.-Colombia Free Trade Agreement. Barfield rightly pointed out the U.S. is taking a swipe at the sovereignty of another nation and is interfering in its domestic labor market. As he notes:
Among the more egregious demands, Colombia has acquiesced to “criminalize” (with prison terms of up to five years) any acts that “undermine the right to organize and bargain collectively.” It must also pass a law dictating prison terms for anyone who “offers a collective pact to non-union workers that is superior to terms for union workers.” No definition of “undermine” or “superior terms,” of course, is set forth. Such vague mandates are an invitation to harassment and extortion. Further, Colombia must assume heavy administrative and enforcement obligations that will stretch resources and constrict the government’s flexibility to adjust as labor (or other) conditions change in the future—including mandates on the number of inspectors, prosecutors, and police labor investigators, a plethora of new legislative actions, programs, analyses, directives, and consultations/meetings in the labor relations area. Some of these ideas have worth, but the attempted straitjacket of mandated priorities will breed endless disputes down the road.
The new agreement to be added to the trade agreement is called “Action Plan Related to Labor Rights.” The country agrees to draft and submit changes to its Criminal Code to penalize employers for actions that “undermine the right to organize and bargain collectively.” It will also be a crime, subject to imprisonment, to use collective pacts to undermine the right to organize and employers won’t be able to use those pacts to give non-union workers better benefits.
The plan also will force Colombia to set up a Labor Ministry, hire and fund 480 new “labor inspectors” under the civil service, and set up a hot-line and a web-based system to handle labor complaints. But that’s not all Colombia is agreeing to. One hundred of those labor inspectors will focus on specific industry sectors: palm oil, sugar, mines, ports, and flowers and conduct “preventive inspections.” There will also be a new outreach plan so that workers will know their rights.
There’s lots more, including drafting numerous new regulations to address the issue of worker cooperatives, and, of course, the U.S. will review those as well. Timetables for all of these requirements are listed.
CEI has long been concerned about using trade as a big stick to impose other agendas relating to non-trade issues, such as labor and environmental issues, on poorer countries. Here’s what CEI wrote in a formal comment to the U.S. Trade Representative in relation to the inclusion of environmental requirements in the U.S.-Colombia FTA. This text could be equally applied to the inclusion of labor provisions, and the bracketed text reflects that:
“Trade can create wealth, and, in that sense, the most effective means of advancing environmental [and labor] objectives around the world is to move toward free trade. Trade agreements should focus on this positive impact, not seek to use trade policy as a tool to force changes that might – or might not – actually advance some environmental [or labor] objective.
Environmental [and labor] goals should be pursued directly – not via restrictions to trade expansion.
“In relation to the U.S.-Colombia Trade Promotion Agreement and environmental [and labor] goals, CEI and CGFI would emphasize the importance of recognizing that higher environmental standards are best achieved through better economic and institutional conditions, and that trade and open economic systems can lead to improved economic performance, help to reduce poverty, and increase living standards for all participants. As people achieve greater wealth and more economic independence, more resources can be – and usually are — freed up to protect the environment [and workers]. Besides the exchange of products and services, economic and social ideas can also flourish through increased trade.”
The inclusion of those issues can distort markets, force countries to dedicate scarce resources to satisfy rich countries’ concerns, and stymie the economic and other benefits of free trade.