ITUC OnLine – July 26, 2007

Brussels, 26 July 2007 (ITUC OnLine): This week a WTO General Council meeting is set to endorse a draft decision by the WTO Committee on Subsidies to extend the transition period for the phasing out of export subsidies in a number of developing countries. The decision will make it easier for a range of governments to maintain virtually free licence to exploit their workers and repress trade union rights in Export Processing Zones (EPZs).

Under WTO rules, these subsidies were supposed to be phased out by the end of this year, but a group of developing countries asked for a waiver to extend the transition and phase out period till the end of 2015. One of the main uses of such export subsidies is to attract foreign investors to set up production in EPZs, where many of the workers are subjected to harsh conditions with little respect for health and safety requirements, long working hours including forced overtime and an extremely high pace of production. EPZs are notorious for the suppression of trade union rights and forced overtime work. Typically, governments either exempt such zones from labour legislation or do not take action against the breaches in labour law, especially when it comes to working hours and trade union rights.

Among the countries that would benefit from the WTO decision are Costa Rica, the Dominican Republic, El Salvador and Guatemala – all well known for allowing violations of trade union rights in EPZs and for their governments’ weak response to such violations.

The decision in the WTO’s Committee on Subsidies was based on the argument that these developing countries need the policy space to maintain these programmes as they are alleged to be important components of their development strategies. However, if attraction of investment is based on subsidising export production by multinational companies, forgoing tax receipts and the repression of human rights it is hard to see what advantages it brings for development in the countries concerned.

“The EPZs and other special export zones in the countries that would benefit from an extension represent over one million EPZ workers and over US$50 billion of exports annually”, said ITUC General Secretary Guy Ryder. “It is time to get serious about respect for trade union rights in EPZs. Besides the fact that these are fundamental human rights of workers, in reality they do not undermine the competitiveness of companies, as was shown in the joint ILO-WTO report on trade and employment. Governments must take their responsibilities and promote and protect trade union rights in EPZs, just as they must everywhere in their territory.”

For more information on the WTO and Export Processing Zones (EPZs), please click here.