A worker classifies plastic parts at Cat Thai Manufacturing Trading Co Ltd, one of the leading companies in the part supplying industry in Viet Nam. — VNA/VNS Photo An Hieu

HCM CITY (Biz Hub) — Free trade agreements set out ambitious labour standards for companies and stress the importance of corporate social responsibility (CSR), experts have said.

Last year Viet Nam wrapped up negotiations for the EU-Vietnam Free Trade Agreement (EVFTA) and the Trans Pacific Partnership (TPP), Swedish ambassador Camilla Mellander told a seminar held in HCM City yesterday.

"The EVFTA will be strengthening the EU and Viet Nam relationship even further and it also includes a comprehensive chapter on trade and sustainable development.

"We should ensure that trade does not happen at the cost of the environment or of people's rights. Businesses in Viet Nam should be aware of the importance of CSR compliance, as committed by the Vietnamese Government in the EVFTA.

"Consumers are getting more and more aware of how the products they buy have been produced in terms of effects on the environment and workers' conditions.

"Consumers awareness is, among other factors, putting pressure on businesses in Viet Nam and elsewhere to strengthen their efforts to comply with international CSR standards."

Kristin Palsson, deputy director of the Swedish Ministry for Foreign Affairs' International Trade Policy Department, said, "The Swedish Government's view is that open trade and export promotion should go hand in hand with high ethical standards.

"It is also important to engage in a dialogue with businesses on the challenges that this presents.

"Corporate Social Responsibility is becoming more important for sustainable economic growth in today's globalised world."

Vo Tan Thanh, deputy president of the Viet Nam Chamber of Commerce and Industry, said the EU-Viet Nam FTA and the TPP would bring Vietnamese businesses the opportunity to grow and expand their markets.

But they also pose challenges for Vietnamese businesses to comply with international CSR standards in light of the EVFTA, he said.

When the EVFTA comes into force, it is estimated that Viet Nam's GDP will grow by an additional 15 per cent and its exports to the EU by almost 35 per cent.

Once in place, expectedly in 2018, the EVFTA, the first of its kind the EU has signed with a developing country, will not only facilitate trade and enlarge the market for Vietnamese goods and services but also offer Viet Nam new opportunities to improve sustainability and industrial relations.

Labour reform

According to Chang Hee Lee, director of the International Labour Organisation (ILO) in Viet Nam, the EVFTA and TPP reaffirm the four basic labour standards specified in the ILO Declaration: freedom of association and right to collective bargaining, elimination of all forms of forced or compulsory labour and child labour and non-discrimination in respect of employment and occupation.

To enjoy the full benefits of the TPP and other FTAs, Viet Nam would have to embark on major and wide-ranging reforms to improve its business environment, legal system and institutions, he said while speaking at the Viet Nam Leadership Summit last Friday.

It would also have to embark on major labour reforms, particularly its industrial relations system, he said.

At the heart of the TPP requirements is Viet Nam's full respect for the principle of freedom of association, which is seen to be the most difficult labour-related challenge under the deal.

Now all unions must be a part of the Viet Nam General Confederation of Labour (VGCL), but under the TPP, workers should be given the freedom to set up or join any organisation they choose.

This is a significant change not only for workers and the VGCL but also for employers and the Government.

Nguyen Manh Cuong, director of the Ministry of Labour Invalids and Social Affairs' Centre for Industrial Relations Development, said in terms of the right to establish employees' representative organisations, Viet Nam and all countries acceding to the TPP would have to respect and ensure employees' rights to establish and participate in employee's representative organisations at any enterprise. —VNS