Labour link rocks HK deal

By BRIAN FALLOW economics editor

The Government wants to include labour standards in the closer economic partnership agreement being negotiated with Hong Kong.

The Council of Trade Unions supports the idea.

The Hong Kong Government, however, has a longstanding position that it is inappropriate to link such issues with trade negotiations.

And the National Party worries that it might backfire on New Zealand in the future.

The issue of whether labour and environment safeguards should be written into trade agreements is one of the major fault lines in international trade policy.

Opponents see it as protectionism by the back door, proponents as a means of giving widely supported international standards some teeth.

CTU secretary Paul Goulter said: "Ultimately, what we want is to see that labour standards, as set out in [International Labour Organisation's] core conventions, become enforceable through the trade enforcement mechanisms in these agreements."

It was not good enough, he said, to argue that the ILO provided a mechanism to address labour standards at the international level.

"Many countries, including New Zealand under the previous Government, just thumb their nose at the ILO."

The ILO's eight core conventions cover such things as the right to organise and bargain collectively, and certain labour prohibitions.

The Ministry of Foreign Affairs and Trade's discussion document on the proposed agreement with Hong Kong says an examination of Hong Kong's labour laws shows they are not dissimilar to New Zealand's.

"The [New Zealand] Government has indicated that it would like to see labour and environmental standards better integrated with trade agreements, without allowing developed countries to use this as a pretext to keep out developing country exports."

Hong Kong hardly counts as a developing country. It is considerably richer than New Zealand. Gross domestic product per head in 1999 was two-thirds as high again than in New Zealand - $44,000 compared with $26,000 here.

Citing official Hong Kong statistics, MFAT says the overall average wage in the manufacturing sector is $33,000 and for garment workers, $27,000.

The Leader of the Opposition, Jenny Shipley, in a letter to Helen Clark expressing support in principle for a free trade agreement with Hong Kong, nevertheless expressed concern about including labour provisions.

"New Zealand wages for example are lower than a number of countries with whom we trade but whom we would also like to have free trade agreements with," she said. "We would not like to see any inclusion of labour provisions which at a later date allowed any obstruction of New Zealand's exports into a country based on the low cost of labour.