Malaysia is one of Asia's biggest employers of foreign labour. But recently, cases of deaths, abuse and forced labour have come to light. What is going on? Who is protecting these migrant workers?
This emerged at a meeting in Geneva last week on the interface between the multilateral trading system and regional trade agreements (RTAs), organised by the United Nations Conference on Trade and Development (Unctad).
<P>South-South RTAs (like Asean and Mercosur in South America) are between
neighbouring countries that are at the same development level while in North-South
FTAs, the rich country is so far ahead economically that their goods and firms
can overwhelm the developing country’s economy. </P><P>Unctad trade director
Lakshmi Puri said new North-South RTAs go far beyond trade to include services,
investment, competition and intellectual property (IP). However agricultural subsidies
(which are a main protection tool in developed countries) are left out. </P><P>This
theme of “cherry picking” of issues was taken up by experts during the
meeting. It reflects the lop-sidedness of such agreements. Issues like investment
and IP which benefit the developed countries are put in (even if they were rejected
at the World Trade Organisation) while measures that can most benefit developing
countries (such as removing Northern agricultural subsidies) are left out, at
the insistence of the more powerful countries. </P><P>Ransford Smith, deputy secretary-general
of the Commonwealth Secretariat, said that developing countries must be rightly
concerned with North-South RTAs such as the treaty being negotiated between the
European Union (EU) and the African, Caribbean and Pacific states. </P><P>In such
RTAs, developing countries should advocate enhancing special treatment for them
and facilitating the movement of their workers to developed countries. </P><P>South
Centre director Yash Tandon said there were positive RTAs where solidarity and
aid to weaker partners is the main principle. But many RTAs involving developed
and developing countries have an “enforced structure” where one side
dictates the terms and the other side either has to “take it or leave it.”
</P><P>What Tandon referred to is often called a “template”, or a fixed
set of issues and demands that the developed country wants. There is only limited
space to vary. If the developing country partner disagrees, the deal is off. If
the treaty is signed, the developing country accepts a lop-sided bargain and has
to implement often harmful policies. </P><P>The influential development group
Oxfam said that FTAs involving the United States and EU strip developing countries
of the policy space that they need to effectively govern their economies. </P><P>Its
trade director, Celine Chaveriat, said that FTAs with the US delay the introduction
of generic medicines. Medicine costs will shoot up by US$919mil (RM3.2 trillion)
by 2020 in Colombia due to its FTA with the US. These lost funds could be used
to treat 5.2 million people. </P><P>She added that the FTAs involving the US or
EU require the developing country to adopt a law that removes the right of farmers
to save or share seeds, thereby making its farmers more vulnerable. </P><P>Oxfam
said the US and EU also want to open up financial services in the South through
their FTAs. Developing countries liberalise hoping to have more efficiency but
the opposite has happened. </P><P>Recent IMF and UN studies show that opening
up the banking sector leads foreign banks to “cherry pick” only the
most lucrative customers, leaving the poorer and higher risk customers for local
banks, as a result reducing the profitability of local banks. </P><P>In Mexico,
following its FTA with the US and Canada, foreign ownership of the banking system
had increased to 85% by 2000 but lending to Mexican business had dropped dramatically
from 10% of GDP in 1994 to 0.3 % in 2000. </P><P>Chaveriat added that developing
countries are also being pushed to eliminate their agricultural and manufacturing
tariffs while the developed countries refuse to negotiate agricultural subsidies
(which have damaging impacts on farmers in developing countries). </P><P>She cited
a study showing that Colombia could have falls of 57% in income and 35% in employment
in nine agricultural sectors resulting from its FTA with the US. </P><P>Oxfam
called for an overhaul of rules governing WTO and RTAs and a change of mindset
by big players about their trade policies toward developing countries. </P><P>David
Vivas of the International Centre for Trade and Sustainable Development also highlighted
how the US made use of its FTAs to protect the interests of its companies by insisting
on IP provisions that go beyond the current global rules. </P><P>Developing countries
will find it harder to protect public interests as the expanding IP rights will
reduce the public domain. They should be cautious in accepting such IP measures.
</P><P>Officials from many regional groupings, including Asean, were present at
the meeting, as well as representatives from many governments.</P><P><I>Source:
http://thestar.com.my/news/story.asp?file=/2007/3/19/focus/17181336&sec=focus</I>
Address: Wisma MTUC,10-5, Jalan USJ 9/5T, 47620 Subang Jaya,Selangor | Tel: 03-80242953 | Fax: 03-80243225 | Email: sgmtuc@gmail.com.com