Linking Trade with Labour Rights: the ILO Garnment Sector Working Conditions Improvement Project in Cambodia

Sammanfattning: As of January 1, 2005, it will no longer be allowed under international trade rules for one country to impose import quotas on textiles and garments on another country. It is widely expected that the expiration of the 1974 Multifiber Arrangement will lead to a drastic re-shuffle of garment production and trade patterns. Where a number of countries were previously guaranteed a share of the European and American markets for garments and textiles under quota specifications, China is slated to become the big winner and gobble up the lion's share of worldwide garment and textile production once quotas have disappeared. The world over garment factory managers lie awake at night wondering whether they will receive any orders from buyers in the US and Europe come 2005 or whether their products are considered too expensive. From the moment they step in their offices, the Ministers of Finance of countries previously protected under the quota system pace up and down their offices despairing there might be large holes in their budgets for 2005 when sizable revenues from garment and textile exports possibly disappear over night. Meanwhile, an estimated 30 million workers in dozens of developing countries go to work each day largely oblivious that within a year their jobs may have disappeared. Whereas most countries that rely largely on cheap labour rather than a competitive, integrated garment production infrastructure with reliable and sufficient backward linkages are only now starting to realise what the consequences of the end of the quota system might do to their garment industry and in some instances potentially also their very social and political order, there is one country without such an infrastructure where factory managers and government officials, though deeply worried, wake up at least with some hope that they will survive the expected onslaught. This country is, of all countries, tiny Cambodia. Recovering from the brutal regime of the Khmer Rouge in the late 70's under which one-third of its population perished, and having been able to establish a semblance of peace and democracy only since 1993, a small but very important garment sector of approximately 200 factories employing about 230,000 workers is literally keeping the country afloat with hope. Responsible for about 95 per cent of total export revenues and 4 per cent of formal employment in a country where about 77 per cent of the workforce is believed to work in agriculture and the informal sector, Cambodia is hoping that its efforts to improve working conditions in the garment sector will give it a niche that will attract enough buyers to allow its garment sector to survive a non-quota world. On January 20, 1999, the US and Cambodia signed a groundbreaking Trade Agreement. The Agreement sets an export quota for garments from Cambodia to the United States, while seeking to improve working conditions and respect for basic workers' rights in Cambodia's garment sector by promoting compliance with - and effective enforcement of - Cambodia's Labour Code as well as internationally recognised core labour standards. The 3-year agreement, extended for another 3 years and amended in 2001, offers a possible 18 per cent annual increase in Cambodia's export entitlements to the United States provided the Government of Cambodia supports the implementation of a programme to improve working conditions. Following the signing of the Agreement, the Governments of Cambodia and the United States requested the International Labour organisation (ILO) to prepare a project proposal to support the implementation of the article of the Trade Agreement concerned with the improvement of working conditions. Subsequently, a technical cooperation project was agreed upon in May 2000 and started its operations in January 2001. A unique feature of the ILO Garment Sector Working Conditions Improvement Project is its monitoring component. Through a system of regular factory visits ILO monitors assess to what extent the working conditions situations in garment factories in Cambodia are in line with Cambodian law and make suggestions to factories as to where improvements can be made. The findings are published in quarterly reports which, following a certain cycle, include factory names, and are made widely available through placement on the ILO website. In the 8 reports published at the time of writing the ILO has reported that, while problems exist, improvements are being made in Cambodia's garment factories. The ILO monitoring system is widely considered to be highly innovative and some considered replication when negotiations were ongoing concerning the US-Vietnam Free Trade Agreement and partial replication is currently being considered by some quarters within the framework of the Central America - US Free Trade Agreement. The current thesis analyses the evolvement of a certain set of international labour standards in parallel with debates concerning the need for linking trade benefits with the adherence to certain labour standards and places the US-Cambodia Trade Agreement within the context of the relationship between the international trade system and international labour standards. It subsequently analyses the functioning of the ILO Garment Sector Project as a vehicle through which the link between trade and labour as laid down in the US-Cambodia Trade Agreement has been implemented in practice. Finally, it attempts to identify lessons to be learned from the ILO Garment Sector Project in Cambodia, and other ILO projects in Cambodia, which could form the basis for any labour standards' monitoring system regardless where it is being implemented.