Vietnam’s proposed free trade agreement with the EU and the Trans-Pacific Partnership may be designed to encourage trade, but the country’s workforce could also reap benefits from the recent raft of diplomacy. BY ATE HOEKSTRA.
On May 13, 2014, a shock went through Binh Duong, a Vietnamese province just north of Ho Chi Minh City. What was known to investors as one of Vietnam’s most attractive and most orderly provinces suddenly became the stage of mass labour disorder. Up to 20,000 workers attacked foreign-owned factories, setting 15 buildings on fire and damaging several others. It was one of the worst labour protests Vietnam had seen in decades.
The riots were quickly dismissed as anti-China protests, the result of a long-running conflict between China and Vietnam about disputed territory in the South China Sea. But the unrest also put a spotlight on the working conditions of Vietnam’s massive workforce. In recent trade negotiations Vietnam held with the EU, as well as the nine countries of the Trans-Pacific Partnership (TPP), these concerns reared their head once more.
The EU trade agreement discussions led to the inclusion of an assurance that both parties would “ensure that human rights are also part of the trade relationship”. While the US, the lead negotiator for the TPP, made it clear that Vietnam had no other choice than to meet international working standards.
Both FTA’s could make a huge difference in the lives of millions of Vietnamese workers, says Thomas Jandl, a non-resident scholar of the Vietnam National University in Hanoi and an expert on labour rights in Vietnam.
“What I understand is that Vietnam has agreed to meet the ILO standards,” Jandl said to ASEAN Forum. “For a long time this was a big problem in the negotiations, because it undermines Vietnam’s whole idea of Communism, namely that the state represents the workers. Now Vietnam has to change the law. They can’t do that overnight, but one thing you can say about Vietnamese leadership is that if they’re going after something and make that commitment, they do it.”
Mauro Petriccione, the chief negotiator of the free trade deal between the EU and Vietnam, also believes labour rights will improve with the FTA. He specifically points out that the agreement includes an “ambitious chapter” on trade and sustainable development.
“Human rights underpin EU-Vietnam bilateral relations,” Petriccione says. “This includes respect for all labour standards and effective implementation of ILO conventions.” To further improve working conditions the FTA pays special attention to fair and ethical trade schemes, and to Corporate Social Responsibility, adds Petriccione.
The importance both the EU and US placed on working standards is understandable. For many years Vietnam has been a serial labour right offender, especially when it comes to low and unskilled workers.
In 2011 Human Rights Watch reported that tens of thousands of men, women and children were used for forced labour, including at garment factories that produce clothes for Western brands. Two years later a report by Worker Rights Consortium, an international labour rights monitoring organisation, stated that child labour was a “significant problem in the Vietnamese garment industry”. More recently, a report from the Ministry of Labour showed a list of violations in the construction of Hanoi’s prestigious elevated railway, with worker salaries below the official minimum wage and a lack of payment of social and un- employment insurance for 28 of its workers.
Andrea Giorgetta, the Asia director of the International Federation of Human Rights, says the country’s minimum wage is too low to provide workers with a decent living, and that regulations on the right to strike are overly strict. He believes the EU and the TPP should put more political pressure on Hanoi to change this. “Free trade deals could provide effective human rights protection if strong, and enforceable human rights safeguards were included in the text of the agreements,” Giorgetta says. “Unfortunately, this does not seem to be the case.”
A crucial point for human rights observers is that Vietnam does not allow independent labour unions. In line with Communist traditions the country has only one union, the state run Vietnam General Confederation of Labour, which represents all workers. For years activists have urged Hanoi to give independent unions the right to operate. So far without any success. “Legally speaking things will have to change,” Jandl says. “Vietnam has to allow independent representation and bargaining. We still have to see how they will structure it, but it will require changes in the law. I think it will be a real change.”
Jandl believes that the TPP will push the Vietnamese government to implement highly needed reforms, and not just as regards labour rights. State-owned enterprises constitute about 33 percent of Vietnam’s GDP. Notorious for being inefficient, corrupt and protected by the government, Landl believes this will change. “The TPP will force member countries to grant equal rights under the law to all companies,” he says. “That means you need reforms. Vietnamese politicians now say: this forces us to have a new economic structure. We need that to avoid getting stuck in a cycle of low productivity and inflation.”
Still, it will take time before the changes become a reality. EU negotiator Mauro Petriccione hopes the FTA with Vietnam will come into force at the beginning of 2018. Estimates are that it will take at least two more years before the text for the TPP agreement is finalised and ratified. But with so much in the pipeline, the future does look better for millions of Vietnamese workers.
Follow Ate Hoekstra on Twitter – @HoekstraAte.