Export incentives, domestic mobilization, & labor reforms

Abstract

There is a complementary relationship between export incentives and domestic mobilization in improving workers’ rights in global supply chains. Governments will repress labor in order to boost export competitiveness; resistance is then sporadic, ineffective, and dangerous. If governments anticipate economic rewards, they may reduce labor repression; but domestic activists must simultaneously mobilize for substantive reforms. I demonstrate this by exploiting within-case variation in Bangladesh and Vietnam, showing what happened before the introduction of export incentives; in their presence; and after they subsided. Vietnam liberalized labor laws in order to join the Trans-Pacific Partnership; and Bangladesh did likewise in order to salvage its reputation after Rana Plaza. Activists became less fearful once Bangladeshi politicians had announced reforms. They registered unions, demonstrated en masse, and secured a 77% increase in the minimum wage. In Vietnam, party reformists were crucial in persuading their conservative colleagues that TPP would help strengthen the regime’s hold on power, while pushing for genuinely independent unions. This paper explicates the synergies between export incentives and domestic mobilization by connecting protagonists’ motivations to macro-level reforms, via process-tracing and in-depth qualitative research.

Keywords:

• Workers’ rights
• global supply chains
• trade
• free trade agreements (FTAs)
• Vietnam
• Bangladesh

Acknowledgements

I am extremely grateful to my Vietnamese and North American participants (who shared their reflections with me, explained complex political dynamics, and provided useful comments on earlier drafts). This article has greatly benefited fantastically insightful, thoughtful, and constructive criticism from three reviewers; as well as Matt Amengual, Tim Bartley, Susanna Campbell, Greg Distelhorst, Kim Elliott, Alisha Holland, Naomi Hossain, Dan Honig, Genevieve LeBaron, Axel Marx, Ken Opalo, Elke Schüßler; extensive editing by Pseudoerasmus; together with feedback at the APSA Annual Meeting, the Harvard Kennedy School, Center for Global Development, London School of Economics, and Ho Chi Minh City University of Law. Fieldwork was financed by the Development Leadership Programme (DLP), and the Effective States and Inclusive Development (ESID). The debts are many, deficits mine, and critique is very welcome.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

1 Research on PTAs increasingly emphasises domestic politics (Milner, 1999). Curiously though, this focus is not always shared by the sub-set of literature on trade-labour conditionalities.

2 It was also partly motivated by mass protests, and ongoing democratisation.

3 Echoing my findings in Vietnam, Smith-Cannoy (2012) details how post-Soviet states ratified UN human rights treaties, in order to secure economic assistance, but without the intention of implementation. Activists then leveraged these mechanisms. This evidence of a two-step process (export incentives motivating de jure reform, followed by activists mobilising strategically for substantive change) counts against the idea of monolithic ‘norm diffusion’.

4 There is less evidence of synergies in non-democracies, where civil society is weak or dependent on government (Hafner-Burton, 2013; Neumayer, 2005).

5 Norm perceptions can also be traced through quantitative research. To track norm perceptions, surveys can ask respondents to estimate wider support in their enterprise/ community/ country; or how they expect governments to respond, and their anticipation of repression could be tracked over time. As an example of quantitative work on norm perceptions see Bursztyn et al. (2018). This contrasts with surveyors’ tendency to focus on internalised ideologies: “Do you want/believe X/Y?”

6 Union leaders are often employed as factory managers (Anner, 2018a; Do, 2011; Kerkvliet, 2011, p. 173; Lee, 2006, p. 422; Pham, 2017).

7 The ILO has repeatedly urged Bangladesh to permit unionisation in export processing zones, remove bureaucratic obstacles, and the 30% high membership threshold requirement (ILO, 2017, p. 50) - to no avail.

8 ILO Convention 98 on the Right to Organize and Collective Bargaining; and Convention 87 on Freedom of Association and Protection of the Right to Organize.

9 This statement may overstate support for reform. It is impossible to know what proportion of party-state leaders and cadres privately supported independent trade unions. But the point that open critique was deterred by desire for career progression (which was contingent upon party loyalty) was widely reiterated in my sample.

10 A remarkably similar process occurred in 2006. Just before acceding to the World Trade Organisation, the Government of Vietnam briefly tolerated the existence of independent unions, though did not announce any policy changes, and the international incentive to do so was not sustained (HRW, 2009).

11 See also Slater and Wong (2013) on Asian authoritarians ceding multipartyism believing they could maintain control.

12 Likewise in China, protestors tactfully adopt official language, to signal compliance, while pushing for reform (Distelhorst, 2017; O’Brien & Lianjiang, 2006; Perry, 2012).

13 Two factories in the complex had just been audited, against the Business Social Compliance Initiative (Donaghey & Reinecke, 2018, p. 22).

14 The EU accounted for 61% of Bangladesh’s garment exports. It threatened to suspend Bangladesh’s duty free and quota free access to the EU (Financial Times, 2013).

15 The suspension of U.S. trade privileges signalled grave consternation, but was not in itself materially significant (as these did not previously cover garments); Likewise in 2004, US officials threatened to revoke trade preferences unless the Government of Bangladesh rescinded its ban on trade unions in Export Processing Zones. This move was publicly supported by Bangladeshi labour activists, though US insistence subsided, and in 2008 the government expressly prohibited organising in EPZs (Siddiqi, 2009).

16 Clinton may have done the same, as promised in her presidential campaign.

17 For full details, see Chapter 13 on “Trade and Sustainable Development” http://trade.ec.europa.eu/doclib/docs/2018/september/tradoc_157373.pdf. This reflects a difference between US and EU trade deals more broadly, with the former typically requiring stricter labour conditionalities – Leeg, 2018. In June 2019, Vietnam ratified ILO Convention 98, but this only precludes management interference in VGCL unions. Only in 2023 has Vietnam pledged to ratify Convention 87: allowing workers to establish and join unions of their own choosing.

18 The Government only agreed to release the workers and organisers because five image-conscious brands threatened to boycott the 2017 Dhaka Apparel Summit (Ashraf & Prentice, 2019).

19 Countries are more likely to democratise if their neighbours do so (Gleditsch & Ward, 2006; Haggard & Kaufman, 2016).

20 After the EU threatened Cambodia with trade sanctions, Bangladesh’s exports soared. Buyers may have shifted, to avoid tariffs and maximise profits (Apparel Insider, 2019).

21 From 2018, all large French companies are legally obliged to undertake human rights and environmental due diligence, or else be liable for abuses. In 2018, Switzerland’s National Council voted in support of similar legislation (Evans, 2020).

Additional information

Notes on contributors

Alice Evans

Dr Alice Evans is a Lecturer in International Development at King’s College London, and a Faculty Associate at the Harvard Kennedy School.