European Trade Deal Flips Script on Labor Issues

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By Chris Opfer

Oct. 21 — As worker advocates and some Democrats continue to criticize a pending Pacific-rim trade deal over labor protections in participating countries, it is U.S. labor policy that's likely to come under a microscope as negotiators hammer out a separate agreement with the European Union.

Critics of the Transatlantic Trade and Investment Partnership, which U.S. and EU representatives are continuing to negotiate in Miami this week, say they fear that the U.S. could actually drive a “race to the bottom” because the country's wage, benefits and organizing protections are generally considered more lax than those in much of Europe. Echoing concerns raised in the U.S. about countries like Vietnam and Malaysia participating in the separate Trans Pacific Partnership, they told Bloomberg BNA that reducing trade restrictions could force other countries to lower their labor standards in order to compete.

The European trade deal and the recently finalized TPP are expected to get close scrutiny under the limited review process put in place by Congress over the summer. The labor concerns are likely to play a role in the TTIP's ratification in the U.S.—where lawmakers want negotiators to give them more information about the deal as talks progress—as well as in European countries and could help shape how worker-related disputes are resolved under the finalized agreement.

“I want every trade agreement to get the scrutiny it needs by the public and by the Congress,” Rep. Rosa DeLauro (D-Conn.), who has been a staunch opponent of the TPP deal, told Bloomberg BNA Oct. 21. “What we can't be doing is negotiating in secret when a deal has the opportunity to cost jobs and depress wages.”

Although the U.S. Trade Representative's Office says it's taken “unprecedented steps” to increase transparency in trade policy, lawmakers on both sides of the aisle complain that they were largely left in the dark on TPP negotiations. The office has yet to send a copy of the deal, which was finalized Oct. 5, to Congress for review.

‘Pushing Down, Not Lifting Up.'

Celeste Drake, a trade and globalization policy specialist for the AFL-CIO, said there's some irony to the fears that the U.S. could dilute labor protections in the TTIP deal while workers' groups continue to push to raise the standards closer to America's level in some countries involved in the TPP.

Drake also said EU countries like Romania and Slovakia have less robust labor protections. She said the key to both the TTIP and the TPP is that they should include strong enforcement mechanisms.

“Across the economy, we are seeing income stagnation because workers are competing for lower wages and benefits,” Drake said. She added that trade deals like the TPP and TTIP often wind up “pushing everyone down rather than lifting everyone up.”

Trade deals allow businesses in participating countries to more easily shift operations to areas where labor costs are relatively low, according to Jeronim Capaldo, a researcher at Tufts University who has studied the TTIP’s potential labor market impact. If the TTIP deal is finalized, he said, European countries may look to roll back wages, benefits and worker protections in order to better compete with the U.S.

“You might see more jobs, but these jobs will be paying less and less,” Capaldo told Bloomberg BNA Oct. 20.

International Standards Vary

In a March 2013 letter to House speaker John Boehner (R-Ohio), acting U.S. Trade Representative Demetrios Marantis said TTIP negotiators' priorities would include getting “appropriate commitments by the EU with respect to internationally recognized labor rights and effective enforcement of labor laws concerning those rights, consistent with U.S. priorities and objectives.” Marantis said they'd also work to “establish procedures for consultations and cooperation to promote respect for internationally recognized labor rights.”

Meanwhile, European Union delegates have been a bit more specific about their labor agenda, which includes “the promotion of decent work through effective domestic implementation” of the International Labor Organization's core labor standards. The only trouble is that the U.S. to date has ratified only two of the ILO's eight core labor conventions, agreements related to forced and child labor.

Although a third convention—requiring signatory countries to take certain steps to combat workplace discrimination—remains pending in the Senate, it's unlikely that the U.S. will sign onto the other pacts. That's because the ILO standards for worker organizing and collective bargaining conflict with federal labor law by barring employers from opposing unions, allowing multiple labor organizations to represent workers in the same bargaining unit and limiting restrictions on workers' right to strike, among other differences.

General Requirements Possible

Ronnie Goldberg is a lawyer for the United States Council for International Business and serves as the U.S.'s employer representative on the ILO’s Governing Body, which meets three times a year to consider policy issues. The USCIB, the AFL-CIO and a group of government agency representatives comprise a tripartite advisory panel that reviews the impact of ILO conventions on existing domestic law.

Goldberg told Bloomberg BNA Oct. 19 that the ILO standards aren't likely to stop the European trade deal from going forward. Instead, she said she expects the final agreement to include broadly worded language used in other deals that simply obligates participating countries to certify that their laws and practices are consistent with the principles and spirit behind the core standards.

“I would be astonished if it didn’t say that,” Goldberg told Bloomberg BNA, referring to similar language in the ILO's 1998 Declaration on Fundamental Principles and Rights at Work.

But the AFL-CIO's Drake said simply referencing the declaration isn't enough to allay the organization's labor concerns. She told Bloomberg BNA that negotiators should try to write rules on wages, worker safety and labor organizing that will “reverse the trend” of trade deals that “create downward pressure that's harmful to workers on both sides.”

“We believe that the agreement's labor chapter should be able to be enforced, including through trade sanctions,” Drake, who has talked with negotiators and is meeting with other advocates in Miami this week, told Bloomberg BNA Oct. 20. She said the question is not only whether the TTIP will be enforceable, but also whether participating countries have the “political will” to enforce it.

To contact the reporter on this story: Chris Opfer in Washington at

To contact the editor responsible for this story: Susan J. McGolrick at