The Government has a new framework to integrate labour standards issues with trade agreements, Trade Negotiations Minister Jim Sutton and Labour Minister Margaret Wilson said today.

Mr Sutton and Ms Wilson said economic and trade partnership agreements were not ends in themselves.

"The main way they improve living standards is by providing a liberal and predictable trading environment. But agreements should also be negotiated to enhance working conditions by, for example, exploring specific initiatives to improve employment outcomes."

The framework, adopted by Cabinet, sets out a policy for multilateral organisations such as the World Trade Organisation,and bilateral negotiations such as the Hong Kong talks currently underway.

“We wanted to clearly set out Government’s approach to this complex area of policy. We see a need for better integration of labour standards and trade agreements. At the same time we’re conscious that the world’s poorest countries must be able to trade their way to a better future.

“It’s crucial for developing countries that labour standards issues aren’t used as a pretext for keeping their exports out of rich markets. International efforts in this area have to be acceptable to developing countries,” the Ministers said.

Mechanisms proposed are based on cooperation and dialogue rather than sanctions. The framework also establishes International Labour Organisation principles (Declaration of Fundamental Principles and Rights at Work) as the appropriate basis for labour standards issues discussions in trade negotiations

These principles aim to promote basic workers’ rights in key areas like freedom of association and collective bargaining, forced labour, discrimination in employment, and child labour.

“New Zealand strongly supports work being done by the International Labour Organisation. We want this work acknowledged and appropriately supported in trade discussions,” the Ministers said.

The framework document will be published on Ministry of Foreign Affairs and Trade and the Department of Labour websites.

Ends

Framework for Integrating Labour Standards and Trade Agreements

The Government wants labour standards better integrated with trade agreements, without allowing developed countries to use this as a pretext to keep out exports from developing and other countries.

Objectives of Trade and Labour Policy Economic and trade partnership agreements are not ends in themselves. The goal they serve is to improve living standards in the countries whose Governments have negotiated them. This Government believes that to reach that goal, economic and trade agreements need to be crafted in a way which promotes decent work. By this it means opportunities for work in which minimum standards are protected and adequate income is generated within an infrastructure which ensures social protection.

The Government also recognises that agreements need to be negotiated in a way that makes them acceptable to developing countries. Developing countries should not be denied legitimate comparative advantage of lower labour costs but this advantage should not be secured by deliberately neglecting fundamental labour principles.

The Government, therefore, supports the International Labour Organisation’s overarching objectives of promoting decent work in the global economy and adheres to the principles of the core labour standards as reflected in the ILO’s Declaration of Fundamental Principles and Rights at Work.

Linkage Between Trade Agreements and Labour Policy The principal contribution that trade agreements can make to the improvement of living standards is to provide a liberal and rules-based trading environment. But trade, whether in goods or services, does not take place in a vacuum. It is the product of people’s employment. Trade agreements should be negotiated in a way that acknowledges this and aims to enhance the conditions under which people work.

In both multilateral and bilateral contexts, the Government will take a consistent approach that will reflect its objective of promoting decent work in the global economy. Bilateral contexts provide a more direct opportunity for dialogue and to co-operate on specific initiatives to improve employment outcomes. But setting and monitoring labour standards requires the expertise and legitimacy of a specialist international forum. The Government is always mindful in trade agreements, whether bilateral or multilateral, of the need to avoid anything which could undermine the status of the International Labour Organisation.

The ILO Fundamental Principles: A Basis For Discussing Labour Standards The Government believes that the ILO’s Fundamental Principles and Rights of Work. provide an appropriate basis for the discussion of labour standards within the framework of trade agreements.

These core principles are: - freedom of association and the effective recognition of the right to collective bargaining; - the elimination of all forms of forced or compulsory labour; - the effective abolition of child labour; - the elimination of discrimination in respect of employment and occupation. Consistent with the approach taken in the ILO, each country would be free to implement those fundamental principles according to its own laws and practices. But as a minimum, the outcomes of all trade agreements to which New Zealand is a party must be generally consistent with and not undermine these core principles, the promotion of decent work, and the promotion and protection of universal human rights standards.

Integrating the Fundamental Principles With Trade Agreements In any provisions agreed in the context of negotiating a bilateral trade or economic agreement, dialogue and consensus will be preferred to penalties or sanctions as a way of making progress on labour standards issues. The Government’s aim will be to focus discussion of labour issues, and provide a forum for action and progress to be made, by consensus and not coercion, in a bilateral context. Whether this is done in provisions in the agreements themselves, or in some other manner, is a matter on which the Government is willing to show flexibility. It is interested in the content rather than the form.

While the details would need to be determined on a case by case basis, the Government would look to include any or all of the following elements in the framework of any bilateral/plurilateral trade and economic partnership agreements: - a workplan of initiatives or objectives; - a mechanism for regular reviews of objectives or initiatives, and regular dialogue on how to better promote decent work; and - a mechanism for resolution of issues raised by parties or their social partners.

Office of Hon Jim Sutton

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