3 August, 2009The workshop on Free Trade Agreements analysed the consequences and impact of free trade on employment and labour rights. The IMF also organised workshops on this issue in Argentina and Brazil.
CHILE: Thirty national and regional leaders of IMF trade union affiliates in Chile participated in a debate on the impact of trade agreements on Chile as part of a series of seminars and workshops organised by the Trade Union Strengthening Project that IMF has organised with its affiliates in the country.
The workshop on free trade agreements analysed the consequences and impact of free trade on employment and labour rights. This is part of an ongoing debate among IMF affiliates in the region and workshops on this issue were previously organised in Argentina and Brazil.
The workshop discussed the results of a study conducted by the research unit CENDA (Centro de Estudios Nacionales de Desarrollo Alternativo) and the Instituto Observatorio Social in Brazil, with additional contributions by the IMF and its Chilean affiliates.
Speakers from CENDA and the Instituto highlighted the open nature of the Chilean economy with regard to trade and the movement of capital. This means the country is absolutely dependent on what happens in world markets and on trade and the movement of capital to and from Chile.
The multiplicity of agreements signed by Chile (approximately 30 free trade agreements) means that its economy has no protection and it does not change the situation very much if it concedes new access facilities. The Chilean authorities' management of the economy is unilateral and not governed by regional considerations so it lacks a strategy for regional integration.
The study also points out that the increase in imports resulted from a reduction in customs duties and the unilateral opening of the economy during the years of dictatorship. The FTAs signed later have not changed the export-led structure of the Chilean economy and the country continues to be an exporter of primary products with low added value.
Metalworking has been one of the sectors most affected by the opening up of the economy during the last decade because it was mainly focused on trade in Latin America and production for the internal market. The free trade agreements signed by Chile, especially those with the United States and Asian countries, resulted in unequal competition between imports and national production. This was a direct blow to smaller companies and to the increasingly outsourced workforce. Many national companies have become contractors for transnational companies.
Subcontracting has resulted in a high incidence of outsourcing and this casualisation of the workforce has led to poorer health and safety and working conditions. Subcontractors have become more prominent in the metalworking and mining industries. Official figures for 2006 showed that the number of metalworking companies that subcontract work had risen to 53.3%, although trade union data indicates that as many as two-thirds of workers are employed by subcontractors. Subcontracting is also a phenomenon that promotes division among workers.
Carla Coletti, IMF International Officer, said the workshop had provided an opportunity for an in-depth debate and "recommendations for action were made, to promote a detailed analysis of the issues, disseminate information to workers, progress the debate among IMF affiliates in Chile and mobilise workers to focus on the country's strategic development on the basis of an exchange of experience with metalworking unions from other countries, particularly the South, within a framework of solidarity between metalworkers at national, regional and global levels."
*The study will be available on our website within a few days.