Participation in TPP negotiations and Abe administration’s labor market ‘reform’

By INOUE Hisashi
Vice Secretary-General, National Confederation of Trade Unions (Zenroren)

TPP’s impact on labor market is kept invisible

There is little media coverage of labor issues regarding the ongoing negotiations on the Trans-Pacific Partnership (TPP) pact (or Trans-Pacific Strategic Economic Partnership Agreement).

The free trade agreement is said to be about making cross-border movements of people, goods and money free. But labor issues are missing from media coverage. Why?

The answer is very simple. It is because almost nothing is stated about labor issues, much less about possible impacts on Japanese workers, in the materials concerning the TPP talks.

After the United States joined the negotiations, labor area was newly added to the TPP along with financial services, investment, and cross-area issues.

According to materials provided by the Japanese government, TPP negotiators are discussing elements for a labor chapter that include commitments on labor rights protection and mechanisms to ensure cooperation, coordination and dialogue on labor issues of mutual concern as well as a ban on easing the labor standards with the aim of promoting trade and investment . The issue involved is about making it illegal to resort to labor dumping as a means of increasing exports. With manufacturing remaining sluggish, the United States is trying to stay hands of other TPP countries and developing countries. But it is not easy to deal with the labor issue, as it is not stated in the labor-related section. What’s going on in Japan will lead to a major adverse revision of the way people are employed. It will undoubtedly affect all walks of the working people.

What the US has so far demanded

The TPP is often likened to a bilateral free trade agreement with the United States because US intentions and prior talks with the United States have significant influence on the outcome of the free trade negotiations on labor-related issues. The United States has so far used the so-called structural impediments initiative talks and the comprehensive talks to force Japan to privatize the postal services, introduce a defined contribution pension scheme, remove regulations on fee-charging employment agency, allow employers to use temporary agency workers without restrictions, introduce a white collar exemption system, and allow employers to use severance pay to dismiss workers. Clearly, these are issues that have been raised over the past more than 20 years as the agenda items on deregulations in the labor area. They were recently raised by the government’s Regulatory Reform Council.

The United States has advantage in such areas as finance, investment, and intellectual property (patent). Easing regulations on investment or liberalizing investment could substantially give rise to corporate takeovers by vulture funds and other speculative investors, and corporate restructuring/disbandment designed to make short-term profits. Real damage from these activities is already reported by the media. It is very likely that such investment funds will frequently assault workers through merciless dismissals and cutbacks in conditions of employment.

We should also note the attempt to include provisions on investor-state dispute (ISD) settlement. Its aim is to allow investors and corporations to sue a foreign government if they think they have incurred losses due to regulations imposed by that country. It is a system favorable to the United States in that American corporations can win all such lawsuits and the country sued will be ordered to pay a huge amount of money in damages. It will render domestic laws toothless. In labor-related area, there are fears that self-serving lawsuits will be filed against governments.

Abe administration’s labor law arises from traitorous policy of acceding to TPP

The Abe administration’s “Regulatory Reform Council” submitted its report on June 5.

The report’s main selling point is a reform that will make it easier for regular employees to move from one company to another while promoting industrial metabolism. The reform will include the following plans:

*Establish rules on the use of limited regular full- time employees;
*Introduce a discretionary work schedule system that has been limited to planning jobs (making unpaid overtime work legal);
*Liberalize the use of temporary agency workers (reviewing the present ban on the replacement of regular full-time position with temporary workers);
*Reform regulation of the fee-for-service job placement agencies (to use more private-sector staffing services).

There is a lot of talk going on about “removal of non-tariff barriers” as well as tariffs. The Japanese government is intent on easing regulations in labor-related areas, which means removing laws protecting workers’ rights.

Such deregulation of the labor market runs counter to the global trends. Many countries in the world are trying to get rid of the various adverse impacts of the globalized economy. They are moving toward raising the minimum wage and enacting a public contract law as part of the effort to protect their respective citizens. In January, Thailand, Malaysia, Singapore, and Vietnam substantially raised the minimum wage or newly introduced the minimum wage system. In Japan, the Abe administration is going against the international trends by seeking to ease regulations that have protected workers in one way or another, the aim being to remake Japan into a country where Japanese and US multinational corporations have greater freedom to do business.

Prime Minister Abe has said that he wants Japan to make the world’s easiest country for companies to do business. This means that the labor market reform he intends to achieve is to do away with laws to protect workers in line with the TPP, a traitorous policy.

Reforming the regular employee system is tantamount to declaring major job cuts

In the earlier stages of discussion on labor-related regulatory reform, introduction of monetary resolution of disputes over dismissals and easing restrictions on dismissals were said to be the main issues. But, apparently after facing public criticism and opposition movements, the government deferred these issues saying that it will carefully consider them based on various viewpoints. It is certainly necessary for us to be convinced that we have pushed back the adverse reforms. But the government’s reform is aimed ultimately to allow employers to dismiss workers without restrictions. We need to do more to force the government to give up these plans.

I said that the crux of the panel’s report is to reform the regular employee system that will increase workers’ mobility. In order to promote metabolism in business operators, the government is firmly determined to reform the present regular employee system by increasing workers’ mobility, paving the way for changing employment and labor policy as a whole from one of maintaining employment to one of supporting labor’s mobility. This is tantamount to allowing large corporations to carry out worker transfers with government authorization. As clear from the recent major cost-cutting restructuring at major electronics makers, regular workers middle-aged and older will be forced to agree to early retirement. This makes it urgent for us to intensify without delay our campaign to stop massive dismissals and massive unemployment.

The government Council on Regulatory Reforms says the greater the diversity and flexibility in employment, the higher the wages will be. That’s not true at all. The truth is that if mobility increase in the labor market and employment becomes more unstable, wages will go down, just as we have experienced in the past “20 lost years”. That is a height of folly, as it is contrary to the government’s aim to pull the country out of deflation. What we need is a proactive struggle to increase wages. Stabilizing the labor market is the best prescription for encouraging people to spend money and revitalize the nation’s economy.

Why “limited regular full-time employee” system?

The “limited regular employee system” is supposed to become a breakthrough to reforming the way full-time workers are employed. What is it? The Regulatory Reform Council says that position, location and working hours (overtime work) are unlimited for regular full-time employees and that this way of working needs to be changed. It says that there should be a system to enable people to work on limited positions and at limited locations to promote flexibility and diversity in the way people work in harmony with their lifestyle. This is what the council calls “limited regular employee system.”

A panel of experts is to draft concrete rules of employment for limited regular employees. A limited regular employee’s contract could be terminated automatically if that worker’s position or workplace is eliminated. There is no doubt that the business sector’s selfish intention of this kind is being concealed. Unlimited regular employees will be forced to accept excessively heavy workloads as the company demands. Limited regular employees will be forced to agree with lower wages and other degraded treatment. People will have no option but to choose between these two categories of employment. Even today some workers (particularly women) are discriminated against under a career-tracking system that puts workers in particular courses. Such a discriminatory treatment will be promoted with government authorization if the new regular employee system is introduced. Already some large corporations have indicated that they will stop employing regular workers. They would employ young workers as limited regular employees or as probationary employees. The proposed plan has serious bearings on everyone’s work and employment.

Liberalization of the use of temps and other adverse labor law revisions are on the waiting list

The labor law reform plans do not stop there.

Ostensibly to provide people with diversity and flexibility of work, the regulatory reform council has proposed a limited regular employee system along with eased requirements for a discretionary work schedule system (which is now applied to planning work) and for a flextime system. Flexibility is only in name as its aim is to make forced unpaid overtime work legal and allow employers to force workers to work even longer hours.

The Regulatory Reform Council is also proposing reviewing the main principle of the use of temporary agency workers that temporary agency workers must not be used as replacements of regular employees. Removing the rule restricting the use of temps to “temporary jobs” or “professional jobs” is tantamount to totally liberalizing the use of temporary agency workers. By introducing a limited regular full-time employee system, the number of regular full-time employees will be sharply reduced, and the use of casual workers will become commonplace.

In addition, the plan will call for the utilization of private-sector manpower business. This will turn the job placement agency into a for-profit business. It will also promote and even force labor mobility.

We must not overlook that these are only the beginning of labor law reforms. The regulatory reform council is tasked to draw up plans of their implementation and oversee and urge the administrative agencies to carry them out. The council is also expected to continue discussing and come up with concrete plans for the remaining issues. The need now is for us to launch a nationwide opposition.