LABOUR: US Unions Oppose Free Trade With Malaysia

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Anil Netto

KUALA LUMPUR, Jan 21 2007 (IPS) - Trade unions from the United States have joined forces with their Malaysian counterparts to strongly oppose ongoing negotiations for bilateral free trade agreements (FTAs) until workers’ concerns are first addressed.

The American Federation of Labour and Congress of Industrial Organisations (AFL-CIO) and the Malaysian Trades Unions Congress (MTUC) are poised to ink a joint declaration agreed upon in Kuala Lumpur last week.

The declaration resembles those that U.S. labour federations had previously signed with their counterparts in South Korea in June, Central America (2002) and Australia (2001),

The Kuala Lumpur declaration on the proposed US-Malaysia FTA asserts that economic integration between the two countries must result in broadly shared benefits for working people and communities, not simply extend and enforce corporate power and privilege. It also warns that violations to workers’ rights had reached crisis levels.

The AFL-CIO is a voluntary federation of 54 national and international labour unions, representing 10 million workers in the United States. The MTUC, on the other hand, is an umbrella movement of Malaysian trade unions representing half a million workers.

The swiftly agreed joint declaration by the trade union movements stands in stark contrast to the floundering official U.S. FTA negotiations with Korea and Malaysia. US trade officials are struggling to wrap up their separate negotiations with both countries by March so that the drafts can be presented to the US Congress for approval before the expiry on Jun. 30 of a fast-track trade promotional authority.

Malaysian International Trade and Industry Minister Rafidah Aziz said it was unlikely the U.S.-Malaysia FTA negotiations could be completed before the deadline, but Malaysia was willing to continue beyond that in any case.

Trade negotiations have stumbled over thorny issues such as US firms’ access to government procurement and the service sector in Malaysia. In Korea, the concerns are over the opening of car, beef and pharmaceuticals markets and U.S. anti-dumping rules.

On the strategy of joint trade union declarations, Kuala Lumpur-based economist Subramaniam Pillay feels that the US labour federation has traditionally been protectionist of jobs while the MTUC is concerned about the erosion of workers’ rights.

These were legitimate concerns for unions, he added. ‘‘Malaysian unions want to use this (joint declaration) as a leverage to strengthen workers’ rights here. And the AFL-CIO may want to use it to protect workers from job losses in the U.S.’’

American unionists argue they are not just concerned about job losses in the United States. ‘‘It is not just Northern unions trying to take jobs from Malaysia,’’ AFL-CIO global economic specialist Jeff Vogt told IPS. ‘‘We want to make sure that trade between our two countries is equitable to our workers.’’

For instance, Vogt argued that there was no need for FTAs to demand TRIPS-plus, that is, to insist on intellectual property rights that went beyond the World Trade Organisation (WTO) regime. Neither was there a need for FTAs to grant excessive rights to investors.

Joining forces with developing countries’ trade union movements to oppose FTAs ‘‘gives us more credibility in our advocacy in the U.S.s (and allows us) to say, look, we are not being protectionist,’’ he added.

The Kuala Lumpur declaration observes that it is clear that the US-Malaysia FTA would be based on ‘‘the same failed model as the North American Free Trade Agreement (NAFTA)’’.

Over the last 12 years, NAFTA has facilitated corporate mobility and flexibility but has cost more than one million jobs and opportunities in the U.S. Critics say it has kept U.S. wages low and undermined environmental and public health care protection. In Mexico, workers’ real wages have remain flat or worsened while inequality has widened, increasing the number of people in poverty.

US trade unions and their Asian counterparts want trade agreements to include enforceable provisions to protect workers’ rights, public services and the environment. They complain that the Bush administration has not adequately addressed these concerns in the FTAs they have negotiated.

In the Kuala Lumpur declaration, the unions noted there was evidence that the Malaysian government continues to oppose any labour protection in FTA, ‘‘based on a misguided notion that that achieving economic growth and international competitiveness must be at the expense of core labour rights’’.

Unionists point out that FTAs typically rely on weak national laws while provisions for enforcement of labour standards, dispute resolution and action against violators of workers’ right are weak, ineffective and difficult. In contrast, the FTAs tend to provide excessive protection for multinational corporate investment and profits.

The MTUC and the AFL-CIO said they were also deeply concerned with the lack of transparency and the government’s failure to consult trade unions and civil society organisations.

Malaysian unionists, meanwhile, are also worried about a public submission for the FTA negotiations made by the American Malaysian Chamber of Commerce (AMCHAM) and the U.S. Chamber of Commerce. The two bodies had argued that ‘‘while it is important to protect the rights of workers, Malaysia’s current employment laws are too restrictive and unbalanced against companies, thus making it very difficult for employers to terminate under-performing employees’’.

The two bodies added that they would like to see Malaysia’s domestic labour laws and its Industrial Relations Court reviewed ‘‘to take into greater consideration the needs of employers and the ability of companies to remain competitive and productive through proper management of their workforces’’.

Critics saw these comments as a thinly disguised desire to make it a lot easier to lay off workers, as is the case in the U.S. Unionists are also deeply concerned that more secure jobs would be replaced with casual and irregular work under an FTA.

‘‘The most important area we (Malaysian unionists) are concerned about is security of tenure – the outsourcing of jobs and the subcontracting of labour,’’ says K Somasundram, an MTUC official who participated in the discussions with the AFL-CIO.

‘‘It is already happening in the banking sector, with the outsourcing of back-office services,’’ he told IPS. ‘‘Unions are concerned because they feel that this is one of the ways of busting unions as they will then be outside the scope of representation.’’

The executive council of the AFL-CIO in a statement in November has proposed a new approach to make trade more fair and beneficial for all workers. It wants a slowdown in President George W. Bush’s rush to negotiate new bilateral free trade agreements and a review of all current agreements. It is also calling for a reform of the current trade regime to create a more just global economy, ‘‘one that works for working families and not just to boost the profits and power of multinational corporations’’.