Thực hiện cam kết về lao động trong NAFTA của mexico và bài học cho việt nam ttta

VIETNAM ACADEMY OF SOCIAL SCIENCES
GRADUATE ACADEMY OF SOCIAL SCIENCES

PHAM THI THU LAN

MEXICO’S IMPLEMENTATION OF NAFTA LABOUR
COMMITMENT AND LESSONS LEARNT FOR VIETNAM

Major

: International economy

Code

: 9 31 01 06

SUMMARY OF DOCTORAL DISSERTATION

HANOI - 2019


The Disertation was completed at
GRADUATE ACADEMY OF SOCIAL SCIENCES

Academic supervisors:

1. Assoc. Prof., Dr. Nguyen An Ha
2. Assoc. Prof., Dr. Dang Minh Duc

Commentator 1: Prof., Dr. Do Duc Binh
Commentator 2: Assoc. Prof., Dr. An Như Hải

Commentator 3: Assoc. Prof., Dr. Trần Thị Lan Hương

The Dissertation is to be defended in the presence of the Board of
Examiners at the Graduate Academy of Social Sciences
on date month year 2019

The Dissertation can be found:
National Library
Library of Graduate Academy of Social Sciences.


LIST OF SCIENTIFIC RESEARCH WORKS

1.
2.

3.

4.

5.

6.

7.

8.

9.

Pham Thi Thu Lan (2017), "Why wildcats and will always wildcats strikes
in Vietnam?”, Global Labour Column, No. 290.
Pham Thi Thu Lan (2017), "A few thoughts on renovation of the method of
union operation in the new context ", Labour and Trade Union
Review, No. 623 and 624, pp.18-19,24.
Pham Thi Thu Lan (2017), "Bringing labour standards into FTAs:
Economic opportunities and challenges for developing countries",
Labour and Trade Union Review, No. 632 pp.10-11.
Pham Thi Thu Lan (2017), " Some typical cases on complaints of Mexico's
implementation of labour standards and lessons learnt for Vietnam",
Labour and Trade Union Review, No. 634, pp.10-11.
Pham Thi Thu Lan (2017), “Role of trade unions in socio-ecological
transformation in Vietnam””, Quỹ Rosa Luxemburg Bullentin –
South East Asia, No 1 - 2017.
Pham Thi Thu Lan (2018), "Research of labour standards in economic
development and the Mexico case ", Socio-economic Information
and Forcast Review, No. 147, pp.33-36.
Pham Thi Thu Lan (2019), “Labour regulations in the North American Free
Trade Agreement and the implementation by Mexico”, Vietnam
Social Science Magazin, No. 3/2019.
Pham Thi Thu Lan (2019), “The consequences of low wages – a look at
garment enterprises”, Labour and Trade Union Review, No. 650,
March 2019.
Pham Thi Thu Lan (2019), “Employment in the fourth industrial revolution
and challenges for Vietnamese human resources”, Labour and Trade
Union Review, No. 651, April 2019.


INTRODUCTION
1. The necessity of the Dissertation

The increase of free trade agreements (FTAs) with labour commitment
affirms the fact that in the current development trend, the economic aspect and the
labour aspect cannot be separated. Vietnam, with its entry in new-aged FTAs, is
required to attach more attention to the implementation of labour standards so as
to make use of the advantages of it for economic development and, at the same
time, not affected by trade sanctions, anti-dumping or trade protection laws of
other countries, as well as leaving no social consequences.
Vietnam has never had experience in implementing labour commitment,
while this fact has been in the world for 25 years and Mexico was the first
developing country with NAFTA in 1994. Therefore, it is necessary to study the
experience of developing countries. The research questions include: What are the
comparative advantages that labour standards bring about for countries in today's
global economy? How does Mexico implement its labour commitment in NAFTA
and does it make use of such comparative advantages of labour standards? What
are the current development viewpoints and how can countries to take advantage
of high labour standards for economic development? Why do countries still
compete with low labour standards? These are important research questions to
help Vietnam envision the process of implementing the labour commitment in a
developing country, the problems encountered and how to deal with them so as to
make use of opportunities and limit challenges. The research questions show the
urgency of the research topic for Vietnam, especially when the National Assembly
of Vietnam has agreed to ratify the Trans-Pacific Comprehensive and Progressive
Partnership Agreement (CPTPP) in November 2018 and the European
Commission approved the Vietnam - European Union Free Trade Agreement
(EVFTAs) in October 2018.
In addition to complying with commitment in the FTAs, the
implementation of labour standards also derives from the internal requirements of
Vietnam. Despite exceeding the threshold of low-income countries, Vietnam is
still a low-middle income country. Although many households escape poverty,
their income level is still near the poverty line, so the number of near-poor

households is still very high. The poverty rate is still high. Moreover, poverty also
means being denied basic rights, social marginalized, unsecured rights such as the
right to appropriate living standards, especially food and clothes, housing, social
security rights, access to basic services on health, education, clean water,
information, the rights to dialogue, negotiation and participation in decisionmaking on issues related to employment, salary, working conditions ...
Implementing labour standards will help Vietnam achieve its goals of sustainable
development and contribute to comprehensive, balanced and inclusive
development. With requirements of both international integration and domestic
1


development needs, the Dissertation helps Vietnam envision and choose the
appropriate way to go in the coming integration period.
1. The purpose and research tasks
Purpose: The Dissertation studies the experience of the first developing
country in the world participating in FTAs with labour commitment to draw
lessons for Vietnam in implementing its commitment in CPTPP and EVFTA.
Research tasks: (i) systematizing the theoretical basis of the
implementation of labour commitment in FTA, clarifying labour standards and
comparative advantages in the framework of FTA commitment, opportunities and
challenges for developing countries; (ii) analyzing and evaluating the
implementation of the NAFTA labour commitment in Mexico, clarifying the
successes and limitations of implementation and pointing out the cause of this
situation; (iii) comparing the similarities and differences between Vietnam and
Mexico, thereby drawing lessons and recommendations for Vietnam to effectively
implement its labour commitment in CPTPP and EVFTA effectively.
Research hypothesis: The implementation of labour commitment in
NAFTA has helped Mexico develop both economically and socially during the
last 25 years and Mexico continues to benefit from NAFTA in the future.
2. The object and scope of research

Object of research: The Dissertation examines the content related to the
implementation of Mexico's labour commitmens in NAFTA.
Scope of research: In the field of international economy, the Dissertation
focuses on researching socio-economic aspects of labour, analyzing and assessing
the impact of the implementation of labour commitment on the socio-economic
aspects of Mexico, and not going in-depth into the political and other aspects.
Political aspect, if mentioned, is only to clarify points of arguments.
Content limit: The implementation of labour commitment in FTAs (object
of research) is different from the implementation of labour standards stipulated in
FTAs inside the country. The Dissertation still presents the implementation of
labour standards of Mexico inside the country just to understand the situation of
labour standards of Mexico but does not deeply analyze this area (which belongs
to the internal aspect of the country), as each labour standard is a very broad topic,
covering all aspects of implementation related to the implementation viewpoint,
the debate and struggle for implementation among parties and labour relations
actors, the change of political institutions, the process of building domestic laws
and the process of implementing labour standards related to mediation, arbitration,
court, labour inspection, ... handling dispute cases and complaints, domestic
lawsuits, ..., let alone mentioning corruption and unfair trial, so if in-depth
analysis is done, it may go beyond the scope of the Dissertation (i.e. beyond the
framework of NAFTA).
2


3. The method and approach
Research methods: The Dissertation uses a combination of research
methods: (i) Studying economics with the theories of free trade and the theories of
macroeconomics, micro economics, so on, economic rules of supply and demand,
competition, distribution of income by labour, opportunity costs and efficiency,
specialization, so on; (ii) Retrospective materials, analysis and synthesis of

secondary documents, using reliable sources of prestigious scholars; inheriting
existing studies; comparing, evaluating, systematizing arguments and problems,
analyzing Mexican cases, drawing facts and drawing scientific conclusions; (iii)
Analysis and comparison with assessing Mexican practices, comparing and
analyzing development trends, forecasting issues and drawing lessons for Vietnam
in choosing the path of development and implementing labour commitment in
FTAs; (iv) Survey and expert interviews to assess practices of Vietnam in
implementation of labour standards, combining retrospective documents with
practical surveys, interviewing labour experts and officials of Department of
Labour, industry and trade bureaus, enterprise managers, trade unionists and
workers.
Approaches: The Dissertation uses the following approaches: (i) Historical
approach: considering the origin, the rule and the trend of significance to
understand the issues of labour standards and its link to trade and economic
development; (ii) Systematic approach: analyzing and assessing the issues of
inter-sectoral interaction, finding a link of labour standards with trade
liberalization and economic development, between aspects of economics and
international economy and sociology; (iii) Interdisciplinary approach: The
Dissertation uses a combination of methods of social sciences such as economics,
international economy, sociology and others to clarify the intertwined issues
between labour and economy, and labour - economy - development.
4. New scientific contributions of the Dissertation
The Dissertation systematized theoretical basis about implementation of
labour commitment in FTAs and comparative advantages of labour standards in
the global economy; indicating the downside of economic development with low
labour standards; clarifying opportunities challenges to developing countries
joining new-aged FTAs in case of not converting to applying high labour
standards
The Dissertation analyzed and demonstrated the status of Mexico's
implementation of NAFTA labour commitments; assessing good points and bad

points; finding the reasons why Mexico (and some other countries) still compete
with low labour standards.
Grom the reality of Mexico’s implementation, based on the viewpoint of
Vietnam implementing labour commitments in new-aged FTAs for inclusive
development, the Dissertation analyzed labour practices in Vietnam, compared
3


similarities and differences between Vietnam and Mexico, drew lessons learnt for
Vietnam to well implement labour commitments in order to create comparative
advantages for the national economy in the context of new-aged FTAs
international economic integration with changed competitive factors, not only
competing on prices but also competing on labour standards.
For bringing into full play the advantages of labour standards for economic
development, the Dissertation makes some recommendations on immediate,
practical and feasible solutions for Vietnam to transition to high labour standards
in a sustainable way.
6.

The theoretical and practical significance of the Dissertation

The Dissertation is of theoretical significance, clarifying the relationship
between labour standards and economic efficiency, the relationship between
labour standards and competitive advantages, the importance of labour standards
in the global economy through FTAs integration, the importance of choosing
viewspoints and models of development in the current period and the need to
move from competition using low labour standards to competition using high
labour standards.
The Dissertation is of practical significance, as a reference for state
agencies in the process of policy-making in the field of labour and economy, and

choosing a development model for more effective integration in the global
economy. The Dissertation helps the parties visualize the opportunities and
challenges posed by participating in FTAs with labour commitment, selecting
ways to implement labour commitment to make the most of the benefits of labour
standards and limiting challenges. The results of the Dissertation are also
documents in teaching and research. To a certain extent, the Dissertation
contributes the theoretical and practical significance related to political and
security aspects.
7. Structure of the Dissertation
In addition to the introduction, conclusions and appendices, the
Dissertation is structured in 4 chapters. Chapter 1: Overview of research works
related to the Dissertation topic; Chapter 2: Some basic theoretical and practical
issues for implementing labour commitment in FTAs; Chapter 3: Mexico's
implementation of labour commitment in NAFTA; Chapter 4: Implications and
lessons for Vietnam in implementing labour commitment of new-aged FTAs.

4


Chapter 1: OVERVIEW OF RESEARCH WORKS RELATED TO
THE TOPIC OF THE DISSERTATION

1.1. Research works outside the country
1.2. Reseach works inside the country
1.3. A few comments on the research situation
Overview of reseach works inside and outside the country shows that the
research on labour standards is very rich, covering various aspects related to the
dissertation topic. Firstly, all research works affirmed the importance of labour
standards in the current global economy, asserted that trade liberalization was
bringing many benefits to the nation but also posing many social problems, and

affirmed that high labour standards created comparative advantages for countries
and contributed to economic development. Secondly, studies confirmed that
linking labour to trade through FTAs have become a trend even though there have
been protests from some countries, especially developing countries. Many
problems of employment, wages, informalization, inequality, etc. were discovered
in the process of trade liberalization, and the inclusion of labour standards in
FTAs with conditions imposed for implementation, showed the importance of
labour standards in the current global economy. Thirdly, Mexico is the first
developing country to implement labour commitment in the FTAs with both
opportunities and challenges created in the process, while Vietnam has no
experience of implementing the FTA labour commitment, and there has been no
specific research on this area in Vietnam.
Studies both at home and abroad are numerous, but they have not yet made
the reader understand the nature of labour standards as committed in FTAs,
resulting in fears of implementation and the assumption that when high labour
standards is implemented, it will reduce the competitiveness of businesses. They
do not clarify the relationship between labour standards and development
perspectives and the importance of labour standards in global competition (or, in
other words, they does not clarify the changed competitive factors in the current
global economy). They do not synthesize and evaluate the implementation of the
NAFTA labour commitment in Mexico (or implementation of labour commitment
in FTAs by developing countries). They also do not analyze the causes why
Mexico (and some other countries) still compete on low labour standards. The
available studies have also not yet summarized the experience of any country in
the world to draw lessons for developing countries in implementing labour
commitment effectively without leaving behind any consequences. These gaps
can be understood in practice of some countries, but has not been clearly written
in the research works. These are the areas that the Dissertation is focused on.

5

Chapter 2: THEORETICAL BASIS ABOUT IMPLEMENTATION OF
LABOUR COMMITMENT IN FREE TRADE AGREEMENTS

2.1. Labour commitment and characteristics of labour standards as
committed in free trade agreements
2.1.1. Concepts
2.1.2. Content of labour commitment in FTAs
The core labour standards are the labour standards on four clusters of rights
defined in the eight core ILO conventions and are the main labour commitment in
FTAs, namely: (1) Convention No. 87 and 98 on the rights to organize, freedom
of association and collective bargaining; (2) Conventions No. 29 and 105 on
forced labour; (3) Convention No. 138 and 182 on minimum working age and
elimination of child labour; (4) Conventions No. 100 and 111 on nondiscrimination on employment and occupation and ensuring equal pay between
men and women.
In addition to the core labour standards, the labour commitments in FTAs
also includes the implementation of a number of other specific labour standards of
wages, occupational safety and health and working hours at "acceptable" levels.
2.1.3. Characteristics of labour standards as FTAs commitment
Labour standards promoted through FTAs are ILO's core labour standards.
These labour standards only stipulate fundamental rights, including no child
labour and no forced labour, equality at work, ensuring that the industrial relations
parties have the rights to establish their own organizations to engage in dialogue,
collective bargaining and make decision on workplace issues, thereby creating an
enabling environment for making decisions based on negotiations of specific
terms and regulations in various enterprises. In the case of an enterprise facing
difficulties, or at risk of bankruptcy, workers need to understand and share with
enterprises to overcome difficulties so as to maintain the survival of the business,
and therefore, also maintain the job of workers. In case of growth, enterprises

need to make a fair and equitable share for employees, compensating for workers
for their contributions to business development. Core labour standards do not
mean that labour costs are too high that the enterprise cannot survive. The
objective of the dialogue and negotiation mechanism is to find a suitable, win win solution, to satisfy both parties, and thereby helping create a work
environment stable, harmonious and progressive.
Labour standards are promoted through a variety of mechanisms: social
clauses in the World Trade Organization (WTO), labour commitment in the FTAs,
labour standards requirements of export markets, buyers’ requirements for the
implementation of corporate social responsibility, discussion in bilateral relations,
etc. Unilateral measures could be applied by developed countries in its
relationship with developing countries, for example, trade protection and dumping
lawsuits if countries apply low labour standards to specific items. In addition, civil
6


society organizations and consumer associations could exert pressure at various
forums or call for boycott of products of a country, thereby affecting its national
interests. In fact, there has been a country that was "boycotted" for bad practices
of labour standards (Burma's case in 2000), showing the importance of labour
standards in the global economy today.
2.2. Labour standards as comparative advantages
The economic theories of Adam Smith, Ricardo and Heckscher-Ohlin all
affirm that labour standards create competitive advantages for countries.
2.2.1. The relationship between labour standards and economic
efficiency
Economic theories and practice of application of labour standards affirm
that labour standards bring about economic efficiency. Labour standards on
wages, working conditions, working hours give employees work motivation and
job satisfaction, thereby increasing individual labour productivity. Occupational
safety and health standards help production reduce the risk of occupational

accidents and diseases, thereby saving compensation and remedial costs for
employers and reducing the burden on society and the medical system. Vocational
training helps workers improve their skills, change careers and helps the labour
force adapt to changing nature of work, especially during the fourth industrial
revolution (I 4.0) that is taking place. Unemployment benefits and job protection
help workers to accept the risk of losing their jobs for creativity. Active labour
market policies help create flexibility in labour supply and demand, thereby
creating opportunities for workers to work in their professional area to maximize
their capability of labour creativity. Freedom of association and collective
bargaining help reduce labour conflicts and increase coordination between the two
sides in production, work together to solve difficulties and share achievements
together, helping the economy to adjust faster to economic shocks, increasing the
competitiveness of the economy, building trust among parties in labour relations
and working together towards a common goal.
2.2.2. Advantages and disadvantages of low labour standards
Theoretical base and practice show that low labour standards mean that the
rights of workers are not guaranteed, thus resulting in low wages, poor working
conditions; labour inspections are ineffective, leading to violations of labour
standards; then many problems have arisen in the field of labour. Low labour
standard creates an only competitive advantage of low labour costs. Countries
often apply low labour standards to attract FDI and the competition by using low
labour standards takes place at the global level over the past two decades, leading
to "a race to the bottom" (cutting labour costs for competition).
Except for the unique advantage as mentioned above, low labour standards
have many disadvantages for the country, including: social consequences of high
rates of poverty when workers come out of their working age, leaving a burden for
the medical and social security system; restraining the development of human
7

resources due to workers being sucked in and nailed into low-standard labour
sectors with low added value, low skills, low wages; workers have to earn a living
to make ends meet so they have to work overtime and become exhausted after a
day's work, leaving no time for studying and improving their qualifications, thus
creating a paradox of hard work but unable to escape poverty and people are still
poor when reaching their old age, hindering the national poverty reduction policy,
increasing inequality, discouraging changes in economic structure, failing to
ensure the quality of human resources for entering I 4.0.
2.2.3. Advantages and disadvantages of high labour standards
High labour standards mean securing workers' rights so that they can
participate in workplace decision-making, through dialogues and negotiations,
regarding their wages and working conditions, thereby improving wages and
working conditions in line with the situation of the enterprise. The theory and
practice show that high labour standards bring many benefits, including: building
credibility and image for enterprises and countries which respect human rights;
contributing to the profitability of the enterprise by increasing labour productivity
and cost savings in handling problems such as labour accidents, occupational
diseases, labour disputes ...; creating a labour environment that is respectful,
cooperative, harmonious, stable, non-strikes and no spontaneous resistance of
workers, thereby attracting investment, creating a social security floor, protecting
children, fighting forced labour, creating equality in labour, contributing to
minimizing social consequences and social inequality; consistent with global
development strategy and sustainable development goals.
However, high labour standards has the disadvantage of losing immediate
cost-based profits. However, it should be noted that high labour standards does
not mean high wages and high labour costs beyond the capability-to-pay of
enterprises, because the specific wages and working conditions in enterprises are
the result of negotiations and collective bargaining in line with the economic
capability-to-pay of the employer.
Thus, high labour standards or low labour standards all create comparative

advantages for the country. The choice depends on the country.
2.3. Implementation of labour commitment in FTAs
2.3.1 Viewpoints on implementation of labour commitment
Currently, there are two schools of viewpoints on the development model
and its relationship with labour standards.
First, economic development priority is focused: implementing low labour
standards to prioritize economic development first. This view takes economic
development as the focus and prioritizing economic development in order to have
conditions for social and environmental development. This is the viewpoint of
most developing countries at present.
Second, comprehensive development: implementing high labour standards
for a balanced and inclusive development. This view considers development to be
8


for human beings, so it is necessary to balance the interests of all groups in
society, balancing the benefits between economists and workers. This is the view
of the United Nations through the Sustainable Development Goals (SDG) and the
Guidelines Principles on Business and Human Rights (UNGP), of the
International Labour Organization (ILO) with the goal of "a peaceful working
environment is essential to prosperity”, of the Asia-Pacific Cooperation Forum
(APEC) for a world with “no one left behind”, of the Association of Southeast
Asian Nations (ASEAN) with the goals of people-centered development.
Both of these views are appropriate in certain periods of the country. Each
country needs a specific strategy and decides to choose the right development
perspective in each stage of development. The wrong choice will have
consequences, which take time, efforts and resources to overcome, leading to the
lag of the nation and many problems arise.
The selection of the development perspective will determine the viewpoints
and ways of implementing labour commitment in the FTAs: proactive or passive

implementation.
Proactive implementation: the government actively develops a plan and
specific roadmap, actively builds and enforces laws and supports enterprises to
implement laws and take measures to prevent enterprises from violating laws.
Passive implementation: the government has no specific roadmap and plan,
do not monitor the implementation, only handling when violations or complaints
appear; and even after that, there are no subsequent measures to prevent
recurrence, resulting in repeated violations of the same problem.
The Dissertation's view is based on a comprehensive and inclusive
development perspective to study and draw lessons and propose solutions.
2.3.2. Reasons for bringing labour commitment into FTAs
Bringing labour commitment into FTAs comes from developed countries,
both by the Government and the employer with the aim of creating a level playing
field, fair competition in the global economy, and by Western trade unions and
civil society organizations that work for labour rights and human rights to
promote improvement of workers' rights through trade mechanisms – an
enforcement mechanism that has been shown more effective than mechanisms of
other institutions, such as ILO, national laws, global supply chains, ...
2.3.3. Trends in FTAs with labour commitment
The first FTA that has labour commitment is NAFTA in 1994. By 2005,
there were 21 FTAs with labour standards and so far, there are 77 FTAs, covering
136 countries around the world. Initially, the FTAs with labour commitment are
mainly North - North or North - South agreements, but so far, there have been 16
South - South FTAs. The increasing trend of FTAs with labour commitment
indicates that labour standards are becoming increasingly important in the global
economy.
9


2.2.4. Enforcement mechanism of labour commitment

The labour commitment in FTAs in the world are divided into two groups
with two different enforcement mechanisms: conditional or promotional.
Conditional mechanism is often applied in FTAs with the US involvement with
measures of fines or preferential trade cuts, while promotional mechanism is
adopted by the European Union using incentives and development aids to
encourage implementation of labour standards.
2.3.5. Contents of implemention of labour commitment
Implementing entity: the main actor is the government with building
appropriate laws and ensuring compliance of enterprises.
Implementation process: The process of implementing labour commitment
depends on the specific provisions of the FTAs for each country regarding the
roadmap to revise the law and implement the recommendations of the FTAs
parties for each labour standard. The content, level and practice of implementing
labour standards commitment of different countries are different, so the
requirements, recommendations and roadmap for implementation of labour
commitment of different countries is also different.
Specific measures: 4 points:
- Amending and supplementing the national labour law to conform to the
core labour standards (labour standards on rights) as committed in the FTAs;
- Ratifying international labour conventions according to the committed
roadmap;
- Establishing appropriate labour mechanisms and institutions to implement
labour standards;
- Ensuring labour standards are fully and effectively implemented in
practice.
2.3.6. Evaluation mechanism for implementation of labour standards
and labour commitment
Evaluation on implementation of labour standards
There are many mechanisms to evaluate the labour standards
implementation of a country whether it is good or bad: through a consultative

mechanism between FTAs member governments, through ILO monitoring
mechanisms, through ratings by International Trade Union Confederation (ITUC)
on the implementation of labour standards in countries, through the opinions of
non-governmental organizations and civil society, so on.
Evaluation criteria of implementation of labour commitment includes:
- Technical criteria: Assess whether the above specific measures are fully
complied with and implemented, for example: regular meetings, situation reports,
cooperation, information exchange, resource allocation. ...; amending the law in
accordance with international law; law enforcement of guaranteeing no violations;
or promptly remedy and solve effectively if there is any complaints.
10


- Content criterion: Assessing the situation of labour violations, the number
of complaints and the nature of complaints, ie. case of violation or systematic
violation, the process of resolving complaints if it is positive and timely and
efficiently or not, and then, whether countries in question repeat the same
violation or not.
- Result criteria: whether or not the implementation of labour commitment
affects the commercial relations of the parties; the parties are satisfied or
dissatisfied with each other; and labour issues become factors affecting the future
of the relationship or not.
The evaluation of labour standards implementation is the foundation to
evaluate the results of implementing labour commitment in FTA. If labour
standards as committed is complied well within the country, there will usually be
no complaints made to the FTA parties on the non-fulfillment of commitments
and vice versa. At the same time, if countries perform well over the years, they
will often be upgraded in the annual assessment of ILO and ITUC.
2.3.7. Factors affecting the implementation of labour commitment
The process of implementing labour commitment in the FTAs will be

affected by the following factors: national political institutions, lobbying activities
and influence of interest groups during the revision of labour laws, the level of
economic development and the viewpoint of prioritizing economic development,
awareness and culture of "circumventing the law" by employers, ineffective
labour inspections and sanctions system, and corruption which impedes strict law
enforcement.
2.4. Opportunities and challenges of labour commitment
implementation
2.4.1. Some opportunities: Labour commitment in FTAs provide
opportunities for reform of domestic labour laws and institutions, development of
trade relations with developed countries, attraction of foreign investment and
expansion of exports.
2.4.2. Some challenges: If labour commitment is not complied with,
countries may face the following challenges: labour standards may be used for the
purpose of trade protection or sued for dumping; possible sanctions; risk of facing
international complaints; the challenge of transnational pressure when violating
committed labour standards.
Chapter 3: ANALYSIS AND ASSESSMENT OF MEXICO'S
IMPLEMENTATION OF NAFTA LABOUR COMMITMENT
3.1. Mexico's socio-economic context at time of NAFTA signature and
at present
Mexico in 1994 faced many problems such as foreign debt, peso
devaluation, unprecedented inflation and many seriously industries affected.
Economic problems entail political-social issues: Chiapas rebellions, assassination
11


of presidential candidate of the ruling party, assassination of the Party's general
secretary, ... causing social instability.
Mexico's important decision to revive the economy is to join the North

American Free Trade Agreement (NAFTA). As a result, Mexico moved from a
most protected economy into the most open economy in the world by eliminating
many trade barriers and bringing about positive economic impacts, being one in
the world's largest economies today. However, at present, Mexico faces many
social problems, income inequality, disparities between rich and poor, strikes,
violence, ....
3.2. North American Free Trade Agreement (NAFTA)
NAFTA signed in 1994 is the first FTAs between North-South countries,
and also the first FTAs with labour commitmens, signed in a side agreement, ie.
the North American Agreement on Labour Cooperation. (NAALC). NAALC has
opened an opportunity of collaboration to address labour issues among the three
NAFTA member states to improve labour situation, especially for Mexico as a
developing country.
The idea of bringing labour commitment into NAFTA comes from the US
trade unions, environmental groups and a number of other civil society
organizations to address their concerns that low labour and environmental
standards in Mexico will attract American businesses to move to Mexico, causing
job loss for American workers. To alleviate this objection, the US government
proposed Mexico to pledge guarantee of labour (and environmental) standards,
thus bringing labour commitment into NAFTA through NAALC. At the same
time, the US government promised a plan to train and help American workers
who lose their jobs. Although the promises did not satisfy the opposing groups, on
the 12 August 1992, the Agreement was signed and approved on January 1, 1994.
On the Mexican side, the Mexican Government affirmed that improving
labour standards was Mexico's desire to meet the demands of the economy, and at
the same time, Mexico had no other choice when facing the pressure of the civil
society from the American side and it must accept NAFTA with labour
provisions, for "exchange of" trade relations with the US and Canada to revive the
economy.
3.2.1. Substance of labour commitment in NAFTA

NAFTA's labour commitment do not require contracting parties to
harmonize labour laws between member countries, nor impose laws or regulations
of one country on the another but require countries to implement the following
labour standards in accordance with national laws, including: freedom of
association, collective bargaining, right to strike; strictly prohibiting forced
labour; prohibiting the use of child labour; eliminating all employment and
occupational discrimination; equal pay between men and women; ensuring
minimum wage, working time, overtime wages... according to the national law;
prevention of occupational accidents and occupational diseases; appropriate
12


compensation for workers when labour accidents and occupational diseases occur;
protecting migrant workers working abroad.
3.2.2. Mechanism for implementing labour commitment in NAFTA
The institutions are established under NAFTA to enforce labour
commitment, including:
(a) Establishing the Labour Cooperation Committee composing of the
Ministerial Council and the Secretariat, which oversees the implementation of
labour standards, conducts cooperation and technical assistance, consultations and
answers questions and disagreements that arise, ...
(b) The National Administration Office (NAO) is the focal point to contact
with the parties and provide required reports, receive and process complaints and
information about situation and progress of complaints.
(c) National committees, including the National Advisory Committee and
the Government Committee: play the role of advising the parties in the
implementation of labour commitment.
Grievance handling mechanism: Complaints about violating labour
standards lodged by an individual or organization will often be the beginning of
the case regarding the impementation of labour committments. The process for

resolving complaints will follow the following five steps:

Figure: NAFTA grievance handling process (source: Dissertation author)
3.3. Mexico’s implementation of labour commitment
3.3.1. Measures and institutions for implementation
a) Amending labour legislation in accordance with committed labour
standards
Among eight core ILO conventions, Mexico has ratified 7 conventions.
Particularly for Convention 98 on collective bargaining, Mexico has not ratified
until September 20, 2018. However, before that, the national legislation of Mexico
on collective bargaining is not contrary to the principles of Convention 98.
Therefore, among NAFTA's committed labour standards, Mexico must
implement eight labour standards in accordance with the ratified conventions.
Other labour standards on employment, minimum wage, occupational safety,
vocational training, etc. are guaranteed under the national law. Higher labour
standards will be based on dialogues, negotiations and collective bargaining
between labour relations parties.
b) Establishing institutions to enforce the labour commitment
13


After NAALC came into effect, Mexico formed institutions as commited in
NAALC, including the Labour Cooperation Committee, the National
Administration Office (NAO) and advisory committees for the government. It is
noted that many institutions are created on the basis of recommendations after the
complaints, specifically: (i) offices specializing in specific issues of the Secretariat
to investigate labour issues such as: child labour, female workers, people with
disabilities, gender equality ...; (ii) improving the labour inspection system,
increasing the inspection budget, training inspectors, improving the quality of
inspection, significantly increasing the number of inspectors and the number of

enterprises inspected by labour inspections; (iii) establishing many Arbitral
Committees to resolve labour disputes; (iv) applying a secret ballot in all labour
issues.
Most recently, in 2016, in response to regulatory and institutional
pressures, Mexico decided to revise the law with specific revisions: (i) abolishing
existing reconciliation and arbitration committees and move the legal functions of
these committees to the judiciary, establishing a new "specialized and unbiased"
state and federal mediation center to conduct mediation before taken to court; (ii)
the administrative functions of the old reconciliation and arbitration committees,
for example, union registration, are assigned to a new, unbiased and professional
federal agency. The chairman of this agency is elected by the National Assembly.
The renegotiated NAFTA in 2018, named USCMA (also called NAFTA
2018) required Mexico to: (i) establish an "unbiased" labour court system to
resolve labour disputes; (ii) establishing an independent body in charge of
registration of collective agreements; (iii) ensuring that all workers have the right
to access collective bargaining and all agreements must prove to be agreed by
workers by secret ballots. These requirements of institutional and legislative
improvement show that the mode of dialogues, negotiations and collective
bargaining in establishing labour standards is taken with interest.
3.3.2. The implementation of labour standards in Mexico
Although the Mexican legal system regulates labour standards committed
in NAFTA as relatively good, there are many concerns about the implementation
of labour standards in Mexico in practice. Freedom of association and collective
bargaining has always been attacked with serious cases such as union officials and
workers are threatened or killed for exercising union rights. Forced labour and
child labour are still quite common, especially on farms of vegetables and crops,
with working conditions like slavery such as human trafficking, debt repayment
labour, forced marriage to do housework, exploitation of sex work, ...
Discrimination of employment and occupation between male and female workers
is not resolved; average income of male workers is still 29.3% higher than that of

female workers.
Female workers face barriers in recruitment, advancement, etc., such as the
requirement for pregnancy testing in recruitment, denying job opportunities to
14


indigenous people and African people, losing jobs for victims of sexual
harassment and abuse. Informal employments increase. Labour accidents and
occupational diseases still account for 34% of the total number of workers.
Migrant workers working in America are not protected, have lower wages than
those from other countries and still live in poverty.
3.3.3. NAFTA's impact on Mexican economy and society
The economic impact is the most positive effect that NAFTA brings to
Mexico. In 1994, Mexico suffered an economic crisis but in the next five or ten
years, Mexico's economic growth reached 6.6% (2000), 4.1% (2004) and 5.1%
(2006). In 2016, Mexico GDP reached 1.047 trillion US dollars. So far, Mexico
has reduced public debt, balanced the budget, stabilized inflation and increased
foreign exchange reserves and become the second largest economy in Latin
America. FDI investment in Mexico increased significantly. During 1999-2016,
more than 50% of foreign investment poured into Mexico from the two partner
countries in NAFTA. If comparing the two periods 1970-1993 and 1994-2016, the
ratio of FDI to GDP increased from 0.8% to 3.2%. The proportion of exports by
GDP increased sharply, from 13.33% to 38.16% in 2016. The proportion of
industrial products in total exports accounted for 75%. The United States and
Canada have always been Mexico's main export markets. In 1993, the total trade
volume between Mexico and two NAFTA partners was 30.9%. By 2016, this
number had increased to 51%, exceeding the threshold of USD 1,000 billion in
2015 and 2016. However, besides positive impact, Mexican agriculture suffered
from US protectionism. Cheap farm produced from the United States pour into
Mexico, causing many farmers into bankruptcy. At the same time, many domestic

industries also suffer from decrease or bankruptcy.
The social impact contrasts with the economic impact. Although the
employment rate in Mexico increased, especially in manufacturing, but overall,
the unemployment rate in Mexico in 2012 (after 18 years NAFTA) was 5.0%, and
now (after 25 years) ) is 3.2%, compared with the unemployment rate of the 19901994 period of 3.1%. There are years when unemployment rate is up to 7.2%
(2000). To a certain extent, NAFTA contributes to wage increases for workers,
but wage increases do not match the increase in labour productivity (economic
share is not fair). Nominal wages increased, but real wages were almost
unchanged from 1994 to now, only about a 2.3% increase, and only marginally
higher than those of 1980. Although, many jobs were created, but informal
employments increase in most industries. Half of the population is still stuck in
poverty and a quarter is in danger of returning to poverty. According to Sierra
Club, 75% of Mexicans live in poverty in 2001 compared to 49% in 1981.
According to Unicef, 40 million Mexican children live in poverty and 4.7 million
are in extreme poverty. Mexico is ranked among the world's largest rich and poor
countries. According to the ranking of happiness in the period 2014-2016, Mexico
ranked 25th compared to the level of happiness of American ranked the 14th and
15


Canada ranked the 7th. Despite economic development achievements, President
Enrique Nieto admitted that that the number of poor people in Mexico still lives
"backward and poor" is high and rising inequality. NAFTA helps Mexico to
develop the economy but does not help Mexico a balanced development and not
reduce the social development gap between Mexico and the two partners, i.e. the
US and Canada as expected when NAFTA was negotiated.
3.4. Assessment of Mexico's implementation of labour commitment
The implementation of Mexico's labour commitment shows that Mexico
has well implemented technical criteria, but has not yet implemented the content
criteria and result criteria, shown in the following points:

3.4.1. Mexico implements labour commitment in a passive way and reacts
to the situation. Before NAFTA, domestic labour standards violations were
handled within the country. After NAFTA, some unresolved violations were
addressed at the international level. Mexico did not proactively address violations
that lead to many international submissions. Initially, Mexico refused or denied,
so these cases were often resolved only when the hearing was brought up, or
discussions were held at international seminars and conferences ... The process of
resolving cases of submissions was lengthy, putting pressure on the government
of Mexico which made it unable to continue "ignoring" criticism and forced it to
accept "give or take". Enterprises themselves, when often named at international
forums, also found it necessary to modify their behavior. Mexico's practice
showed that Mexico did not actively handle violations and only acted when
submissions were sent to NAOs and under international pressure.
3.4.2. Mexico still utilizes the comparative advantage of low labour
standards but not high labour standards. The passive and reactive implementation
of labour standards shows that Mexico has not recognized the benefits of high
labour standards for economic development, and therefore, has not taken
appropriate steps to improve labour standards for the benefits of high labour
standards to be promoted. After 25 years with spectacular economic development,
Mexico still faces a widening gap between the rich and the poor, increasing
informal employment, almost unincreased wages, and unimproved quality of jobs.
People do not feel happier and the country is still in a state of "backward and
poor".
3.4.3. Facing many international submissions: challenging national
interests. Since NAFTA, Mexico has been continuously facing international
complaints about labour standards violations, including cases of corporate-level
violations and systematic violations, requiring amendments and supplements of
laws and institutions, demanding specific government measures to effectively
enforce the law and prevent continued violations. Mexico faced double
submissions than the US and 16 times more than Canada. These cases cost a lot of

time, finance and resources to resolve. The not-so-good implementation of
16


Mexico's labour commitment is one of the main causes leading to NAFTA
renegotiation which then poses challenges to Mexico's national interests.
3.4.4. Faced with transnational pressure on labour standards: damaging
Mexico’s prestige and image on the international arena. NAFTA creates a "stage"
for cooperation between labour groups and NGOs in NAFTA participating
countries to jointly appeal. There are cases of up to 65 interested groups in both
the US, Canada and Mexico joining hands and signing on the submission, and the
result of improvement of labour standards is mainly due to pressure of this
international linkage for joint submissions.
3.4.5. Not good implementation of labour standards: the risk of social and
political instability. Low wages, unsecured working conditions, poverty, etc. are
the causes of many strikes and collective work stoppages in Mexico and often lead
to violence and police intervention with dead and injured people, act of fire,
smashing, etc., causing social disturbance. Poverty is associated with increased
crime, drug trafficking, murder, kidnapping, etc. According to a referendum,
about 72% of Mexican people do not believe in the Government and 82% do not
believe in political parties. This shows the risk of social and political instability in
Mexico.
3.4.6. NAFTA re-negotiation: affecting Mexico's future development. The
re-negotiated version of NAFTA 1994 (NAFTA 2018) puts the content of labour
at the heart of the negotiation and labour commitment are treated equal with trade
and investment commitment, that is sharing the same enforcement and
punishment mechanisms for violations. Therefore, if Mexico continues to
implement labour standards in a passive way and continue to let violations occur
and repreat as well as delay in addressing the complaints and cases of submission,
delay in revising the law and enforcing the law effectively, labour standards can

become a detrimental factor for Mexico's trade and investment in the coming
period.
3.4. Some reasons why Mexico still competes by using low labour
standards
(a) Still focus on "economic priority". The economic race is not making
countries reconsider their path of development and neither does Mexico.
(b) The defects of the development model have not been clearly seen.
Governments have not yet acknowledged the fact that the sharing of the
"economy" for "society" and "environment" is not commensurate with the
economic benefits gained from the policy "prioritizing economic development".
(c) The benefits of high labour standards have not been clearly
acknowledged. Many governments and employers only look at the immediate
benefits of low labour standards. Nowadays, labour standards are directly linked
to export and the export market's requirements are anti-dumping and anti - “race
to the bottom”, but this has not been clearly recognized by the government and
employers .
17


(d) No want of having decision-making power reduced at both the
corporate and national levels. High labour standards require labour relations
actors to engage in dialogues, negotiations, collective bargaining and jointly make
decisions on related issues at workplaces and at the national level as well. This
would lessens the decision-making power of those who have the right to make
decisions and they don't want it.
(e) Loss of immediate profits from low labour costs if high labour
standards are implemented. Employers and governments only see high labour
standards in that they increase costs of production and affect cost advantages but
do not see that this can be fully offset by government support measures and tax
reduction roadmap from joining FTAs.

(f) Lack of consumer role. Consumers in developing countries do not pay
much attention to the humanity of products regarding the labour aspect of
products and they are still attracted by cheap products. Therefore, they have not
jumped on the band wagon to improve labour standards in their countries.
(h) Political barriers. Although this is not the research area of the
dissertation, in fact, the big concern that some countries, especially unitary
countries fail to implement labour standards is the political reason, especially
regarding the labour standards on freedom of association and right to strike.
Governments is worried that these rights may be used for political purposes,
which may affect the leadership of the party or political instability. In this regard,
according to international standards, labour standards used for political purposes
are contrary to the spirit of labour standards committed in the FTAs, meaning that
countries and governments have absolutely the right to build institutions and take
necessary measures to prevent them.
Chapter 4: IMPLICATIONS AND LESSONS FOR VIETNAM IN
IMPLEMENTING LABOUR COMMITMENT OF THE NEW-AGED FTAs
4.1. The Vietnamese context in comparion with Mexico
4.1.1. Current socio-economic context of Vietnam
Vietnam started a "renovation" policy in 1986. Ten years later, the country
had moved out of the economic and social crisis. In 2009, the country escaped
from the situation of a poor and underdeveloped country and was classified as a
middle-income country in the world. Over the past 20 years, the economy has
grown rapidly with an average growth rate of 7.2%. GDP per capita reached 1,168
USD in 2010, 1,900 USD in 2014 and was estimated at 2,540 USD in 2018.
4.1.2. Labour commitment in new-aged FTAs
The FTAs Vietnam has entered into include multilateral FTAs with
ASEAN countries, Korea, Japan, China and some other countries, but these FTAs
do not have labour commitment. The first two FTAs with labour commitment that
Vietnam is a member are CPTPP and EVFTAs.
18

The content of labour commitment in EVFTAs: Member States commit to
respect, promote and effectively implement the four ILO core labour standards,
stated in the 1998 ILO Declaration; make continuous and sustained efforts to
ratify unapproved fundamental conventions; continue to consider approving other
ILO valid conventions; effectively implement the ILO's ratified conventions in
laws and practices; does not violate fundamental labour standards for competitive
advantage; do not use fundamental labour standards for trade protection purposes.
The content of labour commitment in CPTPP: Member countries must
adopt and maintain four core labour standard in the ILO's 1998 Declaration.
"Adopt" means incoporating labour commitment into each country's legal system;
"Maintain" means to implement effectively and fruitfully the commitment in
practice.
Thus, labour commitment in the new-aged FTAs is often to require
countries to ensure ILO's core labour standards through the enforcement
mechanism of the FTAs.
4.1.3. Reality of Vietnam’s implementation of labour commitment
The viewpoint of Vietnam is to improve the domestic labour standards on
par with international labour standards, which is expressed in the documents:
Resolution No.22-NQ/TW dated 10 April 2013 of the Politburo, Decision
No.2528/QD-TTg dated December 31, 2015 of the Prime Minister, Decision
No.145/QD-TTg dated January 20, 2016 of the Prime Minister, Resolution
No.06/NQ-TW dated November 5, 2016 of the Party Central Committee, Action
program to implement Resolution No.06/NQ-TW dated November 5, 2016 of the
Central Executive Committee.
Like many other developing countries, since the ”renovation” policy,
Vietnam has prioritized economic development. To achieve this goal, Vietnam
wishes to build harmonious labour relations (Resolution 97/NQ-CP 2014 of the
Government) to create a stable environment for economic development. However,

the way to implement harmonious labour relations taken by Vietnam is not
sustainable, leading to many violations of labour laws, discrimination,
manipulation, interference and lack of goodwill by employers, causing many
labour problems shown by the reality of nearly 7000 strikes from 1995 up to now
and this is a challenge for social development.
4.1.4 Challenges of Vietnam's implementation of labour commitment
Regarding amendments of the law: According to the commitment, Vietnam
needs to amend the law to ensure compliance with core labour standards, but this
process will face with difficulties, due to: (i) limited awareness of core labour
standards by labour relations actors, law makers and related agencies involved in
the revision of the law, in particular, and limited awareness by the society, in
general; (ii) Vietnamese law applies the civil law system while labour issues are
diverse and abundant, so the law revision do not keep up with changes in the
labour market; (iii) Vietnam has not ratified 3 out of 8 core conventions, so there
19


is no basis of reference for the development of a “standard” labour law system,
due to the possibility of lobby by labour relations actors and interest groups,
which may make the law revision deviated.
Regarding implementation in practice: Vietnam is a developing country in
a transition to a market economy, so the labour law is not completed and
violations of the labour law are quite common. Wages in Vietnam compared to
other countries in the region is considered low and not ensuring the lives of
workers. In labour-intensive industries such as textiles, footwear, electronics,
workers have to work overtime a lot to supplement their daily expenses. Labour
safety is unsecured and the number of occupational accidents is high. In 2017
alone, across the country, 8,956 occupational accidents occurred and 9,173
victims. Working environment is still polluted. The quality of vocational training
is still low, not meeting the practical needs of enterprises and labour market

requirements. Social insurance debt makes many workers fall into the situation of
losing their jobs without social security. Discrimination, child labour and forced
labour exist, and are not been handled promptly.
4.1.5. The similarities and differences between Vietnam and Mexico
related to the implementation of labour commitment
Although both are developing countries, Vietnam has a one-party, oneunion political system, unlike Mexico which is a multi-party and multi-union
nation. Mexico has 25 years of experience in implementing NAFTA labour
commitment while Vietnam has not experienced any. Current NAFTA have more
stringent enforcement and sanctions than NAFTA 1994. Vietnam's ratification of
Convention 98 on collective bargaining 15 days just before the EVFTA was
signed on June 30, 2019 compared to Mexico has only ratified Convention 98 on
September 20, 2018 after 24 years of NAFTA’s effect and right at the time of
renegotiation of NAFTA shows the importance of labour standards in the current
period.
Mexico's legal system is basically compatible with NAFTA's labour
regulations while Vietnam's legal system has many incompatible points, requiring
fundamental amendments. For Mexico, the issue is much related to law
enforcement, and if necessary, institutional reforms are needed to effectively
enforce the law while for Vietnam, it requires both amendments to the law and
enforcement, including reforms of institutions. This will make Vietnam face a
much more radical change, more fundamental and profound than Mexico, which
poses much more difficulties and bigger challenges for Vietnam.
In addition, Mexico now has an open and well-developed economy, so it is
more favourable than Vietnam. However, Vietnam is more favorable than Mexico
in social consensus because inequality in Vietnamese society is not as profound
and violent as Mexico. Vietnam’s gini coefficient is 35.3 ranking the average
while Mexico is 48.2 raking the high inequalilty in the world. Implementing
labour commitment in FTAs well from the beginning is an opportunity for
20

Vietnam to develop comprehensively and inclusively so as not to face a further
increase in inequality.
4.2. Some lessons from Mexican experience
4.2.1. Lessons on implementing labour commitment
The study of Mexico’s experience concludes that the development model
based on low labour standards is not a sustainable development model. With a
balanced and inclusive development perspective, the Dissertation draws the
following lessons for Vietnam:
First is the lesson about changing the thinking of development model and
labour standards.
Thinking determines action. Vietnam needs to recognize the advantages of
high labour standards and this is an opportunity for a balanced and inclusive
development instead of just implementing labour standards to meet the
requirements of international trade. Changing thinking will help Vietnam take a
step in the right direction, carry out a development model based on high labour
standards instead of low labour standards, shifting from prioritizing economic
development to economic-social-environmental balance, considering labour
standards as a prerequisite in economic policy planning as well as in approving
economic programs and investment projects.
Second is the lesson on proactive action in implementing labour
commitment.
Mexican experience shows that being passive and reactive to resolve
problems when facing complaints and submissions will cost money and, at the
same time, damange the image, prestage and benefits of participating in the global
economy. It would be better if Vietnam choose to take an active approach to
improve and enforce labour standards so as to take advantage of high labour
standards for economic development and create a balanced development towards
long-term benefits and join the global economy in a sustainable way and
contribute to the implementation of sustainable development goals.

Third is the lesson about systematic approach in problem solving.
In dealing with complaints/grievances of labour standards violations,
Vietnam needs a positive and systematic approach rather than resolving the
individual case, and through the process, it is necessary to adjust or change labour
procedures and institutions in the direction of preventing repeated violations.
Resolving violations of labour standards in a systematic way will help Vietnam
avoid the risk of trade sanctions, loss of trade preferences or fines as these are
provided for in the current generation of FTAs.
4.2.2. Implications and suggestions for Vietnam from the case of
Mexico
(a) The pressure is not as great as when there is US participation.

21


The pressure from the US is expressed by that Mexico's labour violations is
more concerned by the United States than Canada; and therefore, more complaints
and submissions about violations in Mexico were sent to the United States. At the
same time, the United States also forced Mexico to implement recommendations
after violations related to institutional and regulatory reforms. Most recently, in
2016, Mexico was forced to revise the legal inadequacies (although the labour
commitment in NAFTA 1994 does not require Mexico to amend labour laws).
Thus, with CPTPP of no US participation, the implementation of labour
commitment for Vietnam will be not as "strict" as Mexico with NAFTA.
However, if for this advantage, Vietnam does not improve labour standards,
Vietnam will face the same consequences as Mexico, even more serious in the
context of I 4.0.
(b) Actively solve problems at the enterprise level instead of facing
problems at the national level, affecting international economic relations.
Any individuals or organizations has the right to file a submission.

Mexican experience shows that failure to handle violations at the enterprise level
will lead to submissions against the government for the reason of not enforcing
labour standards as committed, leading it to face transnational pressure. Slow and
passive government action does not solve the problem but only makes the
problem more serious.
(c) Change the development perspective for sustainable development.
The priority for economic development is no longer appropriate, because it
leaves many negative consequences on the society, which takes a lot of time,
efforts and resources to solve. Vietnam has passed 30 years of renovation and now
becomes a middle-income country, Vietnam needs to shift from an economic
priority perspective to a comprehensive, balanced and inclusive perspective in
development decisions.
(d) High labour standards rather than low labour standards are
competitive factors in the current global economy.
NAFTA 2018 prevents using low wages to attract investment, which means
that even if countries want, they can not continue to compete by using low labour
standards. NAFTA 2018 treats labour standards violations the same as trade and
investment violations, and applies a single mechanism to address all violations.
This shows the importance of labour standards in the international economy and
implies a lot for Vietnam.
(e) Low minimum wages does not encourage technological innovation.
Low minimum wage is the driving force for employers to continue using
the labour force instead of investing in technological upgrading. If the policy of
gradually increasing the minimum wage is applied, the conditions of the worker
will be improved and they can reduce the overtime to have time for learning and
improving their qualifications, thereby helping them adapt to changing jobs for I
4.0, and at the same time, it encourages employers to step by step invest in
22