Asia-Pacific
Nigel Haworth and Steve Hughes
there be a natural and parallel internationalization of labour responses. The consensus accepts that these expectations have not been met, for a variety of logistical, political and structural reasons (Ramsay 1996). Thus, international linkages across labour relations institutions have tended to be seen as focusing on the implications of international processes for national bargaining regimes – an inward, rather than outward, focus.
The later twentieth century is now providing a new context in which this focus may be reversed. The shift to a complex of regional configurations has partially moved attention from the national environment to the trans-national region. In different ways and with different intent, both the European Union (EU) and the North American Free Trade Agreement (NAFTA) have introduced supranational measures which provide some encouragement for internationally- organized bargaining responses (Haworth and Hughes 1998a). In the case of the EU, the Social Charter, its Action Programme and the Social Protocol open up a range of options which, to a greater or lesser extent, may provide the underpin- nings of a European industrial relations area. These include measures relating to European Works Councils, the explicit defence of core labour standards at a European level, and information, consultation and participation for workers (Ramsay 1994: 13–44). In the case of NAFTA, the side agreement on labour (officially, the North American Agreement on Labor Co-operation, or NAALC) commits signatories to the promotion of a number of basic principles including freedom of association and the right to collective bargaining, and includes the establishment of a National Administrative Office (NAO) charged with the consideration of labour issues outside the narrow operation of national jurisdic- tions. Numerous questions and criticisms arise about the efficacy of these measures. Their long-term outcomes are not yet clear and there is every possi- bility that they may not lead to effective transnational bargaining regimes (Haworth and Hughes 1997a, 1998a).
However, supra-national regional integration does create a new dimension in which bargaining issues and the wider interests of bargaining parties are addressed. How they develop will depend on a number of key factors: for example, to what extent does regional integration fulfil the requirements of participating nation-states in terms of economic, social and security outcomes?
To what extent are regional institutions capable of adapting to this process?
Finally, to what extent will regionalization permit further labour co-operation in a region? This chapter addresses these questions in the context of emerging regional agendas in the Asia-Pacific. The key regional forum to be considered is APEC (Asia Pacific Economic Co-operation). We examine the attempt by inter- national labour in the Asia-Pacific region to gain representation in APEC forums and to construct a social dimension to APEC. Specifically, it examines a key tension arising from the pursuit of this objective: the emerging dialogue between the International Confederation of Free Trade Unions (ICFTU) and the All China Federation of Trade Unions (ACFTU). The chapter proceeds in the following manner: the first section presents an overview of APEC and its agenda; the second section examines international labour’s attempt to organize a
regional response to this agenda in the Asia-Pacific; the third section looks at the tensions arising from these responses, particularly those associated with China and the ACFTU; and finally, some conclusions are drawn.
Economic co-operation and human resource development in APEC
APEC was formed in 1989 and has moved forward rapidly to bring together by late 1998 twenty-one economies in the region, which together account for some 55 per cent of world income, 50 per cent of world trade and 50 per cent of world inflows and outflows of foreign direct investment. APEC includes the USA, Japan and China, with Russia joining the forum in late 1998. APEC defined its purpose in 1994 as:
1 Strengthening the multilateral trading system on the basis of open region- alism.
2 Facilitating and liberalizing trade and investment.
3 Working for development co-operation in the region.
The APEC agenda is often reduced to two themes: trade and investment liberalization and facilitation (the TILF agenda), and development co-operation (renamed in Manila in 1996 as economic and technical co-operation or the ECOTECH agenda). Up to 1996, APEC was captured intellectually and organi- zational by an almost exclusive focus on trade and investment (Morrison 1997;
Haworth 1997). This is to some extent surprising as the contemporary APEC model owes much to regional debates begun in the 1960s primarily by Japan, which placed great emphasis on the developmental aspect of regional economic co-operation (Morrison 1997; Petri 1994; Soesatro 1994). A key effect of this capture was the concern to exclude all issues other than those associated with TILF from the APEC agenda. The argument for this was twofold: first, a consensus could be built in the region around TILF that reflected the commit- ment to a World Trade Organization (WTO) model of free trade and growth.
To attempt to encompass other issues would, it was suggested, threaten this consensus. Thus, for example, security, environmental, human rights and labour issues should be dealt with elsewhere rather than in APEC forums. For many participants in APEC, the consensual basis for decision making in the forum (as opposed to, for example, the rule-based model of the WTO) supported this view.
Second, the manifest economic advantages of TILF would in time provide a material framework in which these other issues might be addressed more effec- tively. In other words, economic growth was seen to be the answer to environmental and social pressures.
Notwithstanding this attempt to ring-fence TILF, some extraneous issues did survive, even prosper, within APEC. These included a focus on the environment and sustainability and, more generally, the development co-operation/ECOTECH agenda (Elek 1997). The ECOTECH agenda emerged in its current form out of Labour and regional integration 153
the APEC Leaders’ meetings in Osaka in 1995 and Manila in 1996. In brief, the goals of ECOTECH are:
1 To attain sustainable development growth and equitable development.
2 To reduce economic disparities.
3 To improve economic and social well-being;
4 To deepen the spirit of community among APEC member economies.
Priority areas for activity were also defined in Osaka and included:
1 Developing human capital.
2 Developing stable, safe and efficient capital markets.
3 Strengthening economic infrastructure.
4 Harnessing technologies for the future.
5 Safeguarding the quality of life through environmentally sound growth.
6 Developing and strengthening the dynamism of SMEs.
From a labour perspective, the component of ECOTECH which attracts attention is human resource development. A vigorous area of APEC ECOTECH activity exists in the APEC Human Resources Development Working Group (HRDWG) (Haworth and Hughes 1997b). The precepts guiding APEC’s HRD work were specified in Beijing in 1995 as:
the development of human resources (contributing) to the attainment of economic growth and development … (underscoring) the importance of designing regional approaches to human resources development … sustain- able development depends upon the successful implementation of policies that integrate economic, environment and social objectives … it is important to integrate environmental objectives into education and training programmes to enhance environmental management and technical skills … the accelerating globalization of industry creates a prime opportunity to encourage the establishment and growth of domestic industry and to nurture a highly efficient and productive industrial structure … (SEES) policy dialogue on human resource development, information access, technology sharing, the availability of finance and market access should be enhanced.
The Beijing statement also laid out eight priority areas which the HRDWG should address in its work. These were:
1 A quality basic education for all.
2 Regional labour market analysis.
3 Increasing the supply and quality of managers, entrepreneurs and training in the areas central to economic growth.
4 Reducing skill deficiencies and unemployment by designing appropriate training programmes.
5 Improving the quality of curricula, teaching methods and materials.
6 Improving access to skill acquisition in the bloc.
7 Preparing individuals and organizations for rapid economic and technolog- ical change.
8 Trade and investment facilitation and liberalization.
The omission from this statement of a range of contentious issues is not surprising. Labour migration, labour standards domestic labour relations regimes and, more generally, human rights issues did not find a consensual home amongst APEC’s member economies and were excluded from the HRDWG agendas. On the other hand, practical issues associated with technical matters – for example, skill formation, the integration of technical change and labour, the development of appropriate educational and training provisions, management upskilling to deal with cross-cultural issues – did achieve a consensus and became the heart of the HRDWG process.
However, in early 1997, a sea change began to overtake the HRDWG, culmi- nating in the Joint Ministerial Statement from the 2nd APEC Ministerial Meeting on HRD, held in Seoul in September 1997. In that statement, three themes were developed under the general rubric of a strategy for developing human resources in a new environment and its challenges. The themes are:
1 Fostering the linkages between learning and work.
2 Improving skills development through co-operation and participation.
3 Enhancing labour and management participation in human resources devel- opment.
The third theme dominates the statement. It has been interpreted by some key APEC economies to include an express wish that labour and management should participate in the HRD process. Moreover, the HRDWG is directed to develop work in which representatives of labour, management and government can exchange views on HRD issues, whilst acknowledging and respecting the diversity of economic situations, practices and arrangements in individual member economies.
The initial pressure for this recognition of labour as an equal partner with management within the HRDWG process came from the USA, later supported by the Republic of Korea and others. The USA has consistently expressed the wish that the TILF agenda recognize the importance of labour standards and the threat of social dumping. One tactic used by the USA in support of this has been to include representatives of labour in their delegation to the HRDWG (a measure also adopted by Canada). The third theme furthers this tactical approach. Korea’s interest in this area appears to derive from pressure to present a respectable face towards the world in terms of labour rights at a time when a more liberal regime – and the requirements of OECD membership – has opened the way for the recognition of independent unions.
Labour and regional integration 155
Following July 1997 and the sudden de facto depreciation of the Thai baht, regional concerns took a dramatically different course. Certainties about export- led growth, established over decades, gave way to profound uncertainty about the future economic performance of Asian economies. The outcomes of the Asian financial crisis for regional integration and geo-politics are complex. Some Asian economies – the most-affected being Korea, Thailand, Malaysia and, above all, Indonesia – became supplicants to the international lending agencies and saw domestic strife directed at international economic integration. Other economies, such as Chinese Taipei, weathered the storm and maintained modest growth levels. Japan suffered as the crisis revealed a desperate domestic financial situation in which bad debt reached massive proportions. With perhaps the exception of Korea, whose post-crisis macroeconomic performance has been impressive, policy responses have been unconvincing to international observers and concern continues about the health of the Japanese economy in the region.
China largely insulated itself from the crisis, but the threat of devaluation is still present, entailing inevitable consequences for both Japan and Hong Kong if carried out. APEC’s response to the crisis was at best measured. Many observers argued that the forum was largely invisible in comparison with the presence of the IMF and other international agencies. Where APEC addressed the crisis, a re-appraisal of the ECOTECH agenda was a common theme. The most- affected economies argued that APEC should address not only a range of obvious issues – for example, capacity building in the financial sector – but also wider social issues such as the impact of the crisis on employment and the need to create social safety nets where they did not exist. It is also interesting to note that tripartite activity was a feature of crisis responses in, for example, Thailand, Malaysia and Indonesia. In this way, wide-ranging debate was opened up about, first, how APEC could contribute to a resolution of the crisis, and, second, the narrowness of previous interpretations of the ECOTECH agenda. From this latter response, any long-term, effective widening of ECOTECH will open up greater opportunities for labour representation.
The new requirement that labour be involved in the work of APEC raises many questions. Some economies have still to indicate how they intend to include labour in their HRDWG activities. Government officials in some of these economies are still to be convinced that the intention of the 1997 HRD Ministerial Statement was as interpreted by the USA. When it is accepted that labour should be represented in the HRDWG, in some economies it is not clear who should represent labour, or if representatives will be independent of govern- ment pressure. In some cases (the USA and Canada, for example) it is clear that the established national trade union peak body has been nominated by the respective government as the representative institution within the HRDWG. In other cases still, the expectation is that the established peak bodies will provide representatives (for example, Singapore, New Zealand, Australia). Elsewhere (Indonesia, Malaysia, the Philippines, Chinese Taipei, for example) the future of labour representation in the HRDWG is not so clear. Not surprisingly, for TILF
devotees, the prospect of domestic conflicts between government and peak orga- nizations arriving at the APEC table is unprepossessing.
APEC and international labour
Many of the peak labour bodies in the APEC region are members of the International Confederation of Free Trade Unions (ICFTU), the ICFTU regional organization (Asia-Pacific Regional Organization, APRO) and the ICFTU’s regional grouping constituted around APEC-related issues, the Asia Pacific Labour Network (APLN). Currently, the ICFTU members’ activities around APEC are focused in the APLN, which in turn is subject to close scrutiny in the APRO and the ICFTU headquarters in Brussels. The APLN was established in September 1995 to support and promote the work of trade unions in the APEC region. Its purpose is to promote dialogue with government and business interests in APEC in order to represent, protect and improve labour interests in the region.
Specifically, it identifies four main objectives for its APEC activities:
1 The provision of a full social dimension to the APEC process.
2 The need to complement the existing structure of APEC Ministerial Meetings by a comprehensive work programme to address unemployment, and the development of a social agenda for APEC, requiring regular meet- ings of social ministers and labour ministers.
3 The introduction of an additional protocol into existing APEC investment guidelines with reference to international instruments concerning multina- tional corporations.
4 The establishment of regular arrangements for trade union consultation at different levels of APEC.
(ICFTU/APLN 1995) Since 1995, APLN delegations have met with the respective host of the annual APEC Leaders’ meeting, and in each case has procured a statement on labour-related issues. However, APLN deliberations have highlighted the tensions surrounding the incipient dialogue between the ICFTU and the All China Federation of Trade Unions (ACFTU). Historically, official ICFTU policy towards China has been based on non-association often underpinned by a polit- ical rhetoric firmly rooted in the Cold War. However, recent activities indicate a thawing of this policy. There are a number of reasons for this. Firstly, it reflects ICFTU concerns that it would not be able to represent effectively its Hong Kong affiliates – particularly following the 1997 return of Hong Kong – without some form of dialogue with the ACFTU. Secondly, it recognizes that economic reforms in China have prompted a greater willingness on the part of the ACFTU to engage in international dialogue around labour response to these reforms. Thirdly, the change can be construed as a logical outcome of the drive for free trade and investment in the APEC region. In internal discussion, the ICFTU has concluded that the effectiveness of its APEC activities could be Labour and regional integration 157
severely hampered if it did not include labour representatives from the largest country in the region.
Herein lies the rub for the international trade union movement. In the case of China, it must be expected that, if and when Beijing decides to nominate labour representatives to the HRDWG, members of the ACFTU will be chosen. Thus a situation will arise in which the official Chinese trade union movement will come together with ICFTU affiliates under the auspices of APEC. While this may have advantages for labour’s APEC agenda, it also presents potentially intractable issues about co-operation between the ICFTU and the ACFTU which hark back to still-unresolved Cold War differences. Moreover, opponents of labour participation in APEC, some of whom still support the narrow TILF focus, argue that labour representation in APEC would be unbalanced without the presence of the ACFTU, presumably in the hope that a failure to reach agreement between the ICFTU and the ACFTU on APEC will undermine the US strategy for labour involvement. Thus, the task for the APLN is to consider outcomes which reconcile ex-Cold War warriors with the Chinese state-driven unions within an APEC focus, knowing that a failure to create a reconciliation may undermine labour’s position in APEC.
In summary then, a number of issues arising from this situation can be identi- fied. First, the reluctance to involve organized labour in APEC stems in part from the view taken by APEC that without Chinese and Indonesian representa- tion, ICFTU/APLN is not representative of labour interests in the region. In this case, legitimacy in the eyes of the APEC process may require the burying of traditional hatchets. Second, the rationale for the emerging ICFTU–ACFTU dialogue is subject to broader interpretation. We have already noted how China’s export-led growth strategy lends itself to collaboration with the APEC process.
By extension, it also forms a basis for China’s attempts to satisfy the conditions for WTO membership – an important plank in China’s internationalization strategy. Thus, while China’s commitment to APEC can be seen in the various APEC Ministerial Declarations and in the contents of its Individual Action Plan, this commitment, and the economic reforms supporting it, must also be construed as a process of broader multilateral engagement. Attendant exposure to international regimes of regulation – including labour standards and human rights – increases, providing space for new forms of political and labour repre- sentation.
Seeking accommodation: China, Japan and the USA
The commitment to TILF upon which APEC’s consensus rests provides only modest camouflage of the geo-political and international economic tensions that define the contemporary Asia-Pacific region. One widely accepted interpretation of these tensions focuses on the Japanese search for regional economic hege- mony, commencing in the 1960s, challenged in the late 1970s by a return of the chastened USA, and now balancing security issues which had dominated during the Vietnam era with an emphasis on economic power in the region (Soesastro