Viet Nam ratifies Pacific Rim trade deal, getting closer to international labour standards

The accord includes specific labour requirements to ensure that the free flow of trade will contribute to sustainable development and enable workers and businesses to enjoy fair share of economic gains.

News | 12 November 2018
© ILO/Aaron Santos
HANOI (ILO News) – The National Assembly has put on the green light to Viet Nam’s ratification of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) – a move expected to help the nation advance in labour reforms.

Viet Nam is the seventh out of 11 countries to ratify the Pacific Rim trade deal, which will take effect on 30 December 2018. Canada, Australia, Japan, Mexico, New Zealand and Singapore already ratified it.

CPTTP, together with EU-Viet Nam FTA, includes specific requirements on labour rights and conditions of work to ensure that the free flow of trade will contribute to sustainable development and also enable workers and businesses to enjoy fair share of economic gains.

This new generation of FTAs requires all member countries to adopt and maintain the rights as set out in the 1998 ILO Declaration on Fundamental Principles and Rights at Work in their laws, institutions and practices. They are embodied in 8 core conventions of the ILO, that underpin 1) freedom of association and the effective recognition of the right to collective bargaining (as defined in ILO Convention 87 and 98), 2) the elimination of all forms of forced or compulsory labour (ILO Convention 29 and 105), 3) the effective abolition of child labour (ILO Convention 138 and 182), and 4) the elimination of discrimination in respect of employment and occupation (ILO Convention 100 and 111).

Viet Nam, as a member of the ILO, is bound to respect these universal rights. However, the country is yet to ratify three core conventions (Convention 87, 98 and 105) related to freedom of association, right to collective bargaining and elimination of forced labour.

The Chapter 19 on labour of CPTTP is based on the 1998 ILO Declaration. It also establishes links between the implementation of the Declaration and trade conditions within a time frame, through a side-letter.

The implementation mechanisms foreseen in the agreement include cooperative activities, engaging representatives of business and workers’ organizations as well as international organizations such as the ILO, to strengthen labour market institutions that lay the foundation for the improvement of social dialogue (dialogues between employers and workers) and compliance with the 1998 Declaration.

Currently about one in three regional trade agreements globally include such labour considerations.

An ILO research shows that they have had important impacts with respect to improving gender equality, in particular increasing women’s access to the labour market and reducing the gender wage gap in certain instances. Additionally, there is no evidence that such labour provisions divert or decrease trade flows or have otherwise been used for protectionist purposes.

Another ILO research even reveals that a trade agreement which includes labour provisions increases the value of trade by 28 per cent on average, against 26 per cent for an agreement without labour provisions.

“This is really an opportunity for Viet Nam to modernize its labour laws and industrial relations system, and the need for such reforms firstly comes from the country’s internal context,” said ILO Viet Nam Chang-Hee Lee.

Despite steady improvement in its labour laws and industrial relations framework, some weaknesses remain. There have been more than 6,000 strikes since mid-1990s and all of them were wildcat strikes, not initiated by trade unions. This showed that workers do not feel their rights and concerns are addressed and that the process established for resolving problems is not working properly.

In Viet Nam, many trade union leaders at the workplace are senior managers of enterprises, which is unacceptable in almost all countries in today’s world.

“Union rights are workers’ rights,” said the head of ILO Viet Nam.

In coming years after the CPTPP comes into effect, it is expected that workers are allowed to establish or join organizations of their own choosing at grassroots level, and those organization could or could not be part of the Viet Nam General Confederation of Labour (VGCL).

During the discussion at the National Assembly on 2 November, VGCL Vice President Ngo Duy Hieu said facing such membership competition will be a chance for VGCL to continue its reform and improve its efficiency to better do their job as the representative of workers.

The 11-nation accord, which forms a market of 500 million people, is expected to increase Viet Nam’s GDP by additional 1.32 per cent by 2035, according to the Ministry of Planning and Investment.

* Funding for the New Industrial Relations Framework project is provided by the United States Department of Labor under cooperative agreement number IL- 29690-16-75-K-11. This material does not necessarily reflect the views or policies of the United States Department of Labor, nor does mention of trade names, commercial products, or organizations imply endorsement by the United States Government. One hundred percentage of the total costs of the project or program is financed with Federal funds, for a total of 4 million dollars.

* This story is a product of the European Union-funded project on Promoting ILO fundamental conventions towards ratification of Conventions 87, 98, 105, and actions to eliminate discrimination and forced labour in Viet Nam. Its contents do not necessarily reflect the views of the European Union.