Thoughts Upon Reading the TPP Labor Side Agreement

Warning: This is a cold reading of the Labor Side Agreement by a US visitor. It is not a researched commentary that reflects the view of people in the know here in Vietnam. It is addressed to labor activists in the US. All the commentary coming from labor activists in the US, at least all that I have seen, has focused on the loss of US jobs and the investor-state complaint mechanism. This post, instead, focuses on the Labor Side Agreement.

The side agreement on labor from the Trans-Pacific Partnership trade agreement is titled: United States-Viet Nam Plan for the Enhancement of Trade and Labour Relations. The TPP is a trade deal that some people in the US describe as “building a trade wall around China” to contain China’s power in the global market. It will link 12 nations to “sew up” 40% of world trade in one agreement. It is part of a trade strategy that includes two other vast agreements, the TTIP (Trans-Atlantic Trade and Investment Partnership) and TISA, (Trade in Services Agreement).


In the Preamble, the side agreement document cites the ILO Declaration which in turn cites the labor standards, of which #87 and #98 are most frequently mentioned. Each party commits to “obligations” concerning its labor law as stated in the Declaration.The commitments, however, are all on the Vietnamese side.


How big a deal is this? Just like in the US, Vietnamese labor law has evolved and changed. Vietnam’s labor law operates in a way that was originally designed to frame a socialist economy. It was, even before TPP, evolving to adapt to a mixed economy. In 2012, a new Labor Code reflecting some of these changes was produced. More revisions are in the works. So this agreement will add changes to something that is already in motion.


But let’s look closely at those changes, as required in the Labor Side Agreement.


The Current Role of Organized Labor in Vietnam


Right now, there is one union in Vietnam. The Vietnam General Confederation of Labor (VGCL) is recognized in the Constitution as the representative of the interests of workers, guided by the principles of the Communist Party. It works by democratic centralism, but people at different levels of the VCGL may or may not be members of the Party. Overall, the VGCL is constitutionally guided by the Communist political agenda.


To understand what it means to have one union that is written into the national constitution, compare Vietnam and the US. In the US workers do not have a political party explicitly identified with them. In Vietnam, the Communist Party is the workers’ party (which was its former name). In the US we have many, many different unions that operate with no real political coordination. In Vietnam, the VGCL can pull all the different parts of the structure together into a single source of influence so that labor can have a more efficient impact and make the playing field more level. Compare what’s happening with the Bernie Sanders campaign and different unions in the US, how some unions are endorsing Bernie and some endorsing Hillary. Third, in the US, unions have no recognized role in government. In Vietnam, the VGCL is constitutionally empowered to represent workers to the government and in the management of State Owned Enterprises and government agencies.


Changing the role of the VGCL could change the whole political structure. I’m saying “could,” but that assumes that there would be no resistance to change. To make that assumption, or to predict what kinds of resistance will take place, would be a big mistake. The problem for Americans who are still horrified by our interventions in the lives of people in other countries (still ongoing) is that stuff like this brings up echoes of “regime change.” It’s tricky enough to be here teaching about labor as we know it in the US, without being associated with efforts to interfere with another country’s internal relationships.


This blog post, please remember, is not a message to Vietnamese people. It’s a message to my fellow US people: Don’t you want to be careful about telling other countries what they ought to do? Haven’t we learned that lesson?


Before we go futher, it is important to say that agreement is completely unilateral. It requires Vietnam to change its labor code and the role played by labor organizations in the internal political structure of the country. It does not require the US to match what is required of the Vietnamese. The stick behind getting Vietnam to do things is US money: the US may “withhold or suspend tariff reductions” (p 11, VII-3) if “the United States considers…”


How the Labor Side Agreement interprets Freedom of Association as described in Articles #87 and #98


According to the TPP side letter, signing onto Articles #87 and #98 means that independent and autonomous unions will be allowed. Legally, they will be equal to Vietnam General Confederation of Labor unions in terms of law and practice. Right now, all legal unions are part of the VGCL and have to be authorized by the VGCL. TPP requires Vietnam to allow workers to form a grassroots union on their own, without prior authorization. Once a new union is formed, in order to operate, it must register, but it can register either with the VGCL or some other “competent” government body. This probably means MOLISA (Ministry of Labour, Invalids and Social Affairs) or a DOLISA (Department of Labour, invalids and Social Affairs, the provincial branches of MOLISA).


According to TPP, these independent unions will be autonomous with regard to how they run their internal business and finances. They can join with other unions and form larger structures like regional organizations. They can get training and “technical assistance” from Vietnamese or “international organizations” (such as the AFL CIO, or other US groups, including NGO groups like the National Endowment for Democracy, which gets US government money and is the main funder of the AFL-CIO’s Solidarity Center, among other activities.


These new grassroots autonomous unions can organize, bargain collectively, strike and carry out “labor-related collective activities.” They can elect their leaders, employ staff and own property. They will receive the currently legally required 2% of total payroll costs that currently comes into the VGCL from every employer, based on membership, in addition to union dues paid by each worker.


What if there is already a union in a workplace but it doesn’t represent all the workers? Can they organize another union? It looks as if the answer is yes, because a workplace union does not have to represent a specified bargaining unit – that is, everyone at a workplace as defined by the union’s registration documents, constitution and bylaws, and/or CBA. Compare this with the way a union in the US has to represent everyone in their bargaining unit, member or not, with all the free-rider problems that ensue. In Vietnam, you can be a members-only union. If workers decide not to join their existing union, they not only won’t be represented but they may (meaning are permitted to) be represented only if the individual requests it. This could mean that workers at an enterprise who are unhappy with the VCGL will be allowed to form a separate union at the same workplace. So there may be more than one competing union at the same workplace. This is the situation already in many countries in Europe and elsewhere. This looks like an accommodation to a transitional situation.


What about the phenomenon of the same person serving as union president and the HR officer?

This is something that we were surprised to discover when we first learned about what we were going to teach here.  How can the HR manager be the union president?  (We also found examples of this from our student reports – see previous post). Well, under socialism, it makes sense. But not now.

No, the HR guy is not going to be serving as union president under TPP. Item E-1 says that “Vietnam shall ensure that, for purposes of protecting the interests of the employees, including in collective bargaining, that, in law and practice, it distinguishes between employees and those who have the interests of the employers.” This will affect many of our students, who forsee getting their first job in HR, despite studying labor relations and being politically pro-worker. The reason for this is that there are jobs in HR. This will also be a problem for many local union presidents who will have to choose what they are.


But what about all the “good stuff” that labor in Vietnam would get, that labor in the US doesn’t get?


Here is a list of the kinds of things labor in Vietnam will be able to do under the changes required by TPP. Where did this come from? Who came up with these items? This may all be just sugar-coating, designed to make the side agreement look democratic to US-based labor people. But is anyone lobbying to get these advantages for workers in the US?


Item II A 3-a allows workers to get technical assistance from worker organizations from overseas if they are “legally operating” in Vietnam. “Legally operating” may be key phrase that restricts who comes and who doesn’t. In practice, similar restrictions are at work in the US. The US Government certainly has barred foreign experts and educators, who were invited or employed by some US unions, from entry into the USA or denied them visas, based on their politics, “security” or other reasons. UALE (United Association for Labor Education) members will recall that it has been hard for some visitors from Mexico and even Canada – friends of ours, in one case! – to get visas to attend UALE conferences.


Item II -B-1, as we noted above, continues the employer’s required 2% of payroll contribution to the union treasury, in addition to membership fees, whether the union is a VGCL or a new grassroots union. In the US, employers do not make any contributions of direct cash to the union treasury. All the money in the union treasury comes from dues (or other union-generated sources). This 2% can add up to quite a bit of money.


Item II B-5 says an upper-level union may “assist” a grassroots union only if the grassroots union requests it, which would eliminate the US practice of imposing trusteeships on rebellious or mis-managed unions.


Item II D-1 requires that all members of the grassroots union E-Board be elected by the membership. In the US, while local union E-Boards have to be directly elected, under Landrum-Griffin, many of the bodies that perform collective bargaining duties in unions, district councils or national unions, are elected indirectly by delegate of even delegates of delegates.


Item II E-2 requires that Vietnam establish sanctions against anti-union discrimination and failure to bargain in good faith. Actual sanctions against anti-union discrimination? Right now in the US, “retaliation for union activity” leads to a ULP that travels a slow road through the NLRB. Failure to bargain in good faith? Right now, workers can call in a mediator but ultimately have to strike or do a public corporate or comprehensive campaign in order to make the employer bargain, if he doesn’t want to. What kinds of sanctions are we talking about? In the US, we talk about prohibiting companies from getting government contracts if they violate labor laws, but does that really happen? It’s more a matter of a public image (as in Vermont, with bargaining between the nurses and the University of Vermont).


Item F requires Vietnam to ensure that no laws are set up to undermine union activity. My goodness! Our 80 plus-year old labor law (the NLRA) basically just gives us a ticket to fight. It lets us climb into the arena. I have said this before, elsewhere in this blog. It says, “You can form a union, maybe get it certified, and the law then can make the employer show up to bargain with you,” but after that? From then on, you’re on your own, and the fight got harder and harder as laws and court rulings got more and more anti-union. Now there are a whole bunch of other labor laws and precedents that undermine union activity, like Taft-Hartley, for starters. What if we were required to eliminate laws that were set up to undermine union activity? That would really cause a waterfall of change. What if we shook off all those laws going back to the NLRA? For “union activity” the TPP makes a broad list, including organizing, collective bargaining and strikes, or assisting with these activities as things that should not be undermined.


Item G allows rights-based strikes. “Rights-based” is an ILO term; rights are contrasted with “interests”. Rights are things required by law, like minimum wage, length of workday or limits on overtime. “Interests” are things that workers want in addition to what is theirs by law. Since what is theirs by law is barely enough to live decently (and often not enough for that), strikes to get improvements in working conditions that go beyond what is law are not covered by this. The restriction of strikes to rights-based issues keeps the door open for wildcat strikes for things that are not “rights.” A rights-based strike requires the E-Board to approve 50% plus one. But it’s OK for workers at multiple enterprises to strike in a coordinated way. Also, oil and gas workers can strike! – and these are public sector SOE workers in Vietnam.


Item D and others: A tremendous amount of training is proposed: training inspectors, training criminal system authorities (this has to do with stuff about forced labor and child labor), training in IR bodies and “mechanisms”, personnel in MOLISA and DOLISA and everybody else, including researchers and people who will inspect this whole process. These people must also be hired. Item D says, “Vietnam shall launch an outreach program to inform and educate workers, employers and other stakeholders…” In the US, although there have been proposals for a nationally-funded labor education system, it never happened. Right now labor education in the US is mostly supported by unions with some shrinking public higher ed funding for programs in colleges and universities. How this would be paid for in a developing country is not addressed.


Item IV-B is about public comment and transparency of the whole process, including data on status and outcomes of application for union status, inspections and violations, fines and sanctions. What if we in the US had such a standard of transparency? And if it was easy to find and follow?


Who were the authors of this plan in the US?


I tried to find out where these ideas came from and what their purpose was. It almost reads as if the audience for them is US labor, not Vietnamese labor.


Apparently the AFL-CIO presented some ideas to the Obama administration:


But were then locked out and misquoted.

It feels as if this side letter was written by one person, or a couple of people, who saw an opportunity and, given an assignment, took it and ran with it. I’d like to talk to them.










Published by helenaworthen

Labor educator, retired from University of Illinois, taught at TDT University in Ho Chi Minh City in the Faculty of Trade Unions and Labor Relations. Co-author with Joe Berry of Power Despite Precarity: Strategies for the contingent faculty movement in higher education, forthcoming (August 2021) from Pluto Press.

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