CHRONICLE OF THE II INTERNATIONAL SEMINAR

ADVANCES IN THE CONSIDERATION OF LABOUR STANDARDS IN INTERNATIONAL TRADE,
10 February 2023, UCM Faculty of Law

On 10 February 2023, the UCM Faculty of Law hosted the second international seminar organised within the framework of the International Trade Law and Trade Wars research project. Under the title "Advances in the consideration of labour standards in international trade", the seminar, held in a bimodal format, was structured in two sessions. The first session focused on the Atlantic perspective of these developments and the second session discussed options for a regulatory framework. Each of the sessions featured two renowned specialists who presented and analysed the state of the art, followed by the presentation of two papers reflecting outstanding aspects of each of the issues raised and on which research work is being carried out in the Project.

The opening of the seminar was entrusted to the Director of the Department of International Law, Ecclesiastical Law and Philosophy of Law, Ana Gemma López Martín, Professor of Public International Law, together with the Director of the seminar. In her welcoming remarks and presentation, Professor López Martín stressed the importance of the progress made by the international community in defining and recognising basic labour standards, whose nature as human rights cannot be called into question. The action of the ILO is the protagonist in this field through its 1998 Declaration, amended in 2022, together with the eight fundamental conventions, in which, in line with the approaches of the WTO, the use of these standards for protectionist purposes is rejected. Professor López Martín highlighted the importance of control mechanisms for the respect of standards and the guarantee of their compliance, pointing out the mechanisms established for this purpose by the ILO. Thus, on the one hand, annual monitoring of the fundamental conventions is carried out - both with regard to the States that have ratified them, of which there are an increasing number, and those that have not - and, on the other hand, a global report on fundamental principles and rights is drawn up, which enables progress to be assessed.

Thanking him for his presence and for his introduction, the Course Director set the framework of the seminar by highlighting the importance of interdisciplinarity in tackling issues such as labour standards which, although not strictly trade issues, are intimately linked to it, given the openness of cross-border economic activity and, in this particular case, the weight of value or supply chains in the development of international transactions. Underlining the importance of international trade, as recognised by the UN,  she also stressed the role of international trade in achieving the SDGs (and, in this case, SDGs 8 and 17), and the general concern of States, investors and consumers everywhere in the world to combat forced labour (known as modern slavery), and pointed out that the aim of the seminar was to examine the role of trade in harmonising labour standards at international level. In this sense, he stressed the need to keep in mind the search for a balance between defending the existence of competitive advantages and avoiding the use of labour standards as a pretext for the development of protectionist policies.

The first session, moderated by the organiser, compared the visions and experiences of the United States of America and the European Union (EU). Gary Horlick, Professor of International Economic Law at Georgetown University in Washington D.C., began with the configuration of the United States as a federal state in which competencies are distributed at different levels and, furthermore, that in the matter at hand, different administrative units intervene: the US Trade Agency (Commerce), Labour and Justice (prisons), and the fact that, in practice, those who negotiate a trade agreement are not those who, in the end, implement it. In this context, it may happen that those who implement the rules do not comply with internationally agreed obligations, as is the case, for example, with regard to subsidies for the production of electric vehicles. On this basis, he first outlined how the GATT addressed the labour standards dimension through the exceptions to the liberalisation of imports and exports in Article XX (e), "relating to articles manufactured in prisons", noting that, in addition to not having been commented on by specialists in the field, it has not given rise to any dispute either. As is well known, any exception in this provision may not be used "in a manner which would constitute a means of arbitrary or unjustifiable discrimination between countries..., or a disguised restriction on international trade". In any event, the reference to prison labour is interpreted, by reference to ILO Conventions, as relating to forced labour ("all work ... exacted ... under the menace of any penalty"). Moreover, in this regard, he argues that one cannot lose sight of the rehabilitative role that, at least in Western countries, productive activity carried out in prisons has and even the fact that such work can be remunerated, albeit at or sometimes below minimum wages. From there, he analysed US law since the abolition of slavery and involuntary servitude in the Constitution (13th Amendment to the Constitution) "except as a punishment for crime"; the recognised Section 307 of the Tariff Act of 1930, amended to incorporate the ILO definition of forced labour (which was originally intended to be protectionist) and, on the other hand, section 203 of the Labour Standards Act, which regulates wages, working hours and overtime ... excluding certain sectors (agriculture, domestic work ...) and prohibiting the circulation, between the Länder, of products manufactured by prisoners, including forced labour, which, however, has not been used. Nor is there any evidence that it has been used to curb the export of such products. This is a conceptually complex issue on which trade specialists must collaborate with the Departments of Labour (the authority on labour standards) and Justice (with jurisdiction over prisons) and on which, notes Professor Horlick, although some in the US confine it to prison labour, in reality it should be understood as applying, without more, to forced labour.

On the EU side, Ignacio García-Bercero, Director of the Multilateral Affairs, Strategy, Analysis and Evaluation Unit, Directorate-General for Trade (DG1), European Commission, structured his presentation in four points: the global perspective, with reference to the evolution of debates on the dialectic between international trade and labour standards; trade agreements; autonomous EU trade measures in this area; and finally, some comparative reflections on the European and US approaches. First of all, he established the origin of the normative relationship between international trade law and labour rights, going back, after the reference to the Havana Charter, to Article XX of GATT-47 in which, in addition to the reference to "prison labour" (e) as a cause for exempting the application of the liberalising measures of the Agreement to the traffic of goods, he broadened the margin of action in this field through the considerations of "public morals" (a) insofar as, he understood, it could be used to curb imports obtained through labour exploitation. Unlike what happened in the environmental field, labour standards did not enter at all into the negotiation of the Uruguay Round Agreements for political reasons, which are also behind the fact that, in 1996, the WTO Conference in Singapore recognised and strengthened the weight of the ILO in this area (whose supervisory system, to which the EU has turned for information and references in various cases, is highly developed). It is no coincidence that, in 1998, there was the ILO Declaration which established fundamental principles in this area regardless of their ratification by States. 

This situation is supported by the developing countries and is consolidated after the failure of the Seattle Ministerial Conference in 1999, and the Doha Round does not introduce the treatment of this issue. In 2008, in García-Becerro's opinion, the ILO produced the most balanced Declaration on the subject, in that it sought to ensure that, while labour rights are guaranteed, they are not used as a protectionist measure (Social Justice and Fair Globalization), which will be taken as a reference by the EU in its trade policy, both through unilateral and bilateral measures.
In this context, from 2006 onwards, the EU launched an active policy of global trade agreements (Global Europe Strategy), which, however, did not specify much in terms of labour standards. In the context of the negotiation of the agreement with Korea (which had previously been negotiated with the US, the text of which was only approved by the US Congress after the agreement with the EU had been concluded), a chapter on sustainability (environment and labour standards) was introduced for the first time, in which the principles of the eight ILO conventions (1998 Declaration) had to be respected and the effective implementation of the agreements that had been ratified (four of the eight) had to be achieved, as well as efforts to ratify other instruments in this area. A dispute settlement system (panels of experts) was established without trade sanctions (unlike the Agreements with the USA, which do provide for them), but with a monitoring mechanism, whose implementation and real impact therefore depended on the reputational impact and subsequent reaction. The effectiveness of this system, which was used in 2019 on the grounds that Korea had not made the necessary efforts to ratify the four outstanding conventions and that Korean law had not respected the principles of the ILO Declaration (without it being necessary to prove the impact on trade of these behaviours, unlike in the dispute settlement system in trade agreements with the US), is demonstrated by the fact that Korea had not made the necessary efforts to ratify the four outstanding conventions and had not respected the principles of the ILO Declaration (without it being necessary to prove the impact on trade of these behaviours, unlike in the dispute settlement system in trade agreements with the US). This is demonstrated by the regulatory changes made in Korea following the reputational impact of the panel's outcome, as well as the fact that it is in the process of ratifying the Conventions in question. Moreover, this model has been followed in virtually all EU trade negotiations, with the CJEU declaring sustainability to be part of trade policy and therefore within the exclusive competence of the EU.

Following the adoption of the new approach to trade policy in June 2022, while maintaining the cooperative orientation, the option of adopting trade sanctions for serious violations of the fundamental principles of the ILO Declaration is introduced as a measure of last resort. This has been established in the agreement with New Zealand and is currently being negotiated with Australia. These countries are easier to deal with as they already have agreements with the US providing for this type of measure and are therefore familiar with it. This is not the case with India and Indonesia, with whom negotiations may therefore be more difficult.
As far as autonomous trade instruments are concerned, there are three main avenues for action. First, in the traditional framework of the Generalised System of Preferences (GSP) - modified after the Panel report that established that differences in treatment had to be "for development" - it allows preferences to be withdrawn from those that do not comply with minimum requirements in terms of human rights and labour rights (and this has been done on one occasion, with respect to Cambodia) or, where appropriate, to be granted. Secondly, a proposal for a Directive on due diligence obligations for companies of a certain size established in the EU, requiring them to monitor the labour rights (and environmental) situation of their operations in the value chain. In addition, a Regulation has already been adopted which introduces a ban on the marketing (import) into the EU of products resulting from forced labour, the main difficulty being, as Professor Horlick said in the US case, how to enforce it.

In conclusion, Dr. García-Bercero pointed out that, despite the differences, there is a progressive convergence between the EU and the US in this area. The EU is very deeply anchored in the ILO and its reports, subjecting itself to international standards in order to avoid criticism of the application of arbitrary standards and without stressing the need to reinforce its trade regulation, although it does incorporate, in exceptional circumstances, the possibility of introducing trade sanctions in this area. Meanwhile, the US, whose commitment to the ILO has traditionally been less, associates labour standards with the maintenance of a level playing field. In any case, both sides of the Atlantic are trying to fight forced labour and there is currently a bilateral discussion on how to cooperate on labour rights in the framework of the Trade and Technological Council.
The session concluded with the presentation of two papers. The first, by Jaime Gallegos Zúñiga, Associate Professor at the University of Chile, and Director of its Department of Economic Law, focused on labour standards in the ambitious Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) which brings together Canada, Mexico, Peru, Chile, Australia, New Zealand, Japan, Singapore, Brunei, Malaysia and Vietnam. In addition to recognising ILO instruments, it prohibits forced labour, provides for procedural safeguards and establishes the inappropriateness of promoting trade or investment at the expense of weakening or reducing worker protection. To make these measures effective, a system of consultation has been established. Professor Gallegos highlighted the paradox that, in an agreement in which economies as dissimilar as Canada, Japan, Brunei and Peru converge, commitments were reached in this area, while in other agreements that, conceptually, aim at the free movement of workers, such as the Pacific Alliance - a sub-regional agreement between Chile, Colombia, Mexico and Peru - it has not even been possible to agree on obligations of this kind.
The second, by María Moreno Sancho, researcher in the DCI-GC Project, dealt with the historical framework of the treatment of the issue in the regulation of international trade in the failed and original International Trade Organisation (ITO/OIC), which sought to harmonise trade and labour policies in order to prevent countries from imposing measures that would create unemployment in other countries. Thus, the Havana Charter included provisions on trade policy and labour standards (Chapter II, Articles 2-7) which, however, were not incorporated when the World Trade Organisation was created.

Moderated by Julio A. García López; Professor of Private International Law, UCM, the session on analysing the options for a regulatory framework revolved around the complementarity and the need to combine the approaches that, on the one hand, seek to develop a transnational labour law and, on the other, take advantage of the development of the mediating function of private international law. Wilfredo A. Sanguineti Raymond, Professor of Labour Law at the University of Salamanca addressed the labour law approach on which he has been working ... his research project ... Professor Sanguineti observes the emergence of a wide range of instruments of diverse nature that, operating in an interconnected manner, are aimed at promoting the respect of a common labour rights base (the five fundamental labour rights and human labour rights enshrined in international treaties, including sufficient income and limitation of working time) everywhere in the world, within the Global Value Chains (GVCs) led by Multinational Enterprises (MNEs). In a process that Professor Sanguineti describes as "creative destruction", he observes how, while the traditional mechanisms for protecting workers reduce their effectiveness, others emerge that try to compensate for this effect to the point of considering them as the basis of a new Labour Law, with a hybrid base (private and public, hard and soft law) and multilevel regulation (national and international), such that we are facing a crucial moment for the governance of the labour framework. This new law is characterised by the unique way in which its sources operate and the model of labour regulation in GVCs in which the existence of a core (private standards, based on regulated self-regulation) and two concentric circles (international and national standards) can be pointed out. The rules that reflect this worker protection apply in all the territories where the links in the value chain are located, regardless of national borders, and independently of the legal configuration of the companies involved in the chain. Professor Sanguineti considers this protection to be external to the employment contract and offered, within the GVC, by the MNE due to its position and influence.

In other words, the GVCs constitute the regulatory space that gives rise to a legal category, without prejudice to the difficulties of delimitation (resorting to a broad notion, modulating the duties according to the degree of influence in the chain). It is the MNC that, relying on its economic power, becomes the subject of protection by imposing and making CVG members responsible for the application of standards. The guiding principle is due diligence, launched by the UN Human Rights Council Guiding Principles on Business and Human Rights (16 June 2011), which requires MNEs to put in place processes to identify, prevent, mitigate and respond to adverse human rights impacts that may arise from their activities and those related to their operations, products or services (their value chain). This implies that MNCs must also control, subject to rules, the control of their implementation. Without prejudice to certain advantages (such as the preventive nature or adaptability of the system), this is not without its challenges (extension to the entire chain, looking at root causes, avoiding purely formal compliance, etc.). Hence, Professor Sanguineti, on the one hand, notes the construction of a new transnational labour law that can contribute to changing the social face of globalisation through the real advances that, under the impulse of society, are taking place at great speed at different levels (corporate, state and international); and, in this line, underline the need to strengthen four areas of action; the participation of workers; the consideration of economic sustainability; the regulation of the responsibility of MNCs for the violations committed in their value chains and, in short, the construction of a system of international governance.

Starting with the employment contract and its regulation, the international-private dimension was presented by Laura Carballo Piñeiro, Professor of Private International Law at the University of Vigo, who structured her presentation around three axes; the conflictual responses to labour law in international trade; the existence of international standards and the play of mandatory material rules and, finally, the role that other classic sectors of private international law can play in improving the situation of the migrant worker. Professor Carballo began by pointing out the governing law of employment contracts through the play of the autonomy of the will (limited for the protection of the weaker party) and, failing this, the place where the work was performed (with practical difficulties in cases of mobility) or the establishment that hired the worker (susceptible to manipulation by the employer), without prejudice to the escape clause in the case of closer links with another legal system. In this context, the regulatory harmonisation pursued with the signing of international conventions setting standards (the protective nature of which is considered doubtful in cases such as standard 2.2 of the 2006 Maritime Labour Convention, which authorises working weeks of up to 91 hours) poses problems of compliance by states and, consequently, also by employers who are not supervised or monitored by the state. This leads to what Professor Carballo describes as a governance deficit in value chains. She also notes that while international standards inform mandatory material standards, she points out that, in the absence of incentives to raise their minimum content, they serve to perpetuate inequality among workers and may even prevent more favourable standards from being applied to those who request them. In this regard, he points to corporate codes of conduct and free trade agreements.

To avoid this, she pointed to the potential of transnational collective bargaining, citing the example of the Maritime Labour Convention of 2006. In conclusion, Professor Carballo stressed that, in the case of migrant workers, the problems mentioned are aggravated by difficulties in establishing their working conditions, in accessing information about their rights in the country where the work is carried out, in joining trade unions and even in accessing justice. To this end, both the ILO and the Hague Conference on International Private International Law should act by promoting initiatives to foster international cooperation in order to, on the one hand, strengthen information and legal assistance and, on the other hand, simplify access to justice for workers, while regulating recruitment agencies and joint labour inspectorates.
There were three communications in this session. The first, by Carmen Martínez San Millán, Postdoctoral Researcher at the University of Valladolid, focused on the advances in the consideration of labour standards in international trade, highlighting the amendment of the 1998 ILO Declaration on 10 June 2022 to include the right to a safe and healthy working environment as a new fundamental labour right, which affects trade agreements that incorporate the Declaration as a reference in their chapters on labour and trade. Lidia Moreno Blesa, Associate Professor of Private International Law at the UCM, delved into the gender perspective in labour matters and its impact on international trade relations, highlighting its positive results in the equalisation of subjects within the framework of SDG No. 5. In addition to the work of the WTO, she highlighted the presence of gender chapters and provisions in trade agreements which, for example, integrate gender equality through prohibitions of discrimination in employment and through ILO Conventions 100 and 111.

Finally, Carmen Parra Rodríguez, Professor of International Private Law at the Abat Oliba CEU University, in view of the exponential development after the COVID-19 pandemic of remote work (teleworking), analysed its impact on the field of Immigration Law and the need to address the improvement in the application of the digital nomad visa in the new Spanish regulatory framework for the promotion of the ecosystem of emerging companies (Law 28/2022), taking into account the White Paper on International Labour prepared by the Spanish Association of International Labour Mobility-FEEX.

The seminar was attended by 169 participants, including students and professors from Spanish universities (Alicante, Barcelona, Granada, León, Málaga, Oviedo, Basque Country, Salamanca and Valencia) and foreign universities (Geneva Business School, Buenos Aires and Unicen -Argentina-, Neapolis University -Greece-, Tornio -Italy-, Universidad de Chile, Nacional de Colombia, Universidad Católica and EUPG of Peru), as well as professionals from the legal profession in Spain and Latin America and from the Ministries of Commerce and Tourism, Labour and Defence of Spain, together with the Ministry of Labour and Employment Promotion of Peru, as well as members of the judiciary of Argentina and Peru.