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FREE TRADE AGREEMENTS HELP LABOURERS’ RIGHTS REFORM

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With the EU – Việt Nam Free Trade Agreement (EVFTA) signed late last month, Việt Nam will have the opportunity to gain further access to the market of 28 European Union member countries as well as global markets.

As one of the ‘new generation’ bilateral agreements, the EVFTA trade deal includes commitments to implement International Labour Organisation core standards.

The Vietnamese Government is now revising the Labour Code, which, if adopted, will represent major progress towards alignment with the International Labor Organisation (ILO) 1988 Declaration on Fundamental Principles and Rights at Work.

In parallel, the Government has ratified one of the three remaining ILO core conventions – Convention 98 on collective bargaining – earlier this year. It is working towards the ratification of Convention 105 on forced labour in 2020, and Convention 87 on freedom of association by 2023.

In the revised Labour Code that has been put up for public review, the drafters have added three provisions on the establishment of workers’ associations. In particular, workers have the right to join or form a representative organisation of their choosing, and the law also introduces clearer processes and encouragement for collective bargaining.

Looking back more than 10 years ago, when the terms ‘freedom of association’ and ‘collective bargaining’ were still taboo, it’s clear the country has come a long way.

But of course the future is always unpredictable, and the real implementation of such commitments will prove the goodwill of the Government.

It might be a long road, given the current situation.

Hard life and weak protection

According to a recently-published Oxfam study on Vietnamese garment workers’ wages and living conditions, 99 per cent of Vietnamese garment workers surveyed earn below Asia’s living wage proposed by the Asian Floor Wage and 74 per cent of them earn below the global living wage proposed by the Global Living Wage Coalition.

A living wage, according to Oxfam, is the minimum wage paid to a full-time worker that can cover basic needs of food, housing, healthcare, clothing, transportation, utilities, childcare, education, future savings and savings for future and unexpected events.

According to the study, Việt Nam’s statutory minimum wage is far below what a person needs to cover the essentials. Even the wages most garment workers earn on top of the minimum wage fall short of what is considered a living wage. The national average minimum wage in Việt Nam is VNĐ3.34 million, which is around 37 per cent of the Asia Floor Wage and 64 per cent of the Global Living Wage Coalition benchmark.

Competitiveness is among factors blamed for this distressing situation.

Workers’ wages are being kept low, so manufacturers can reduce prices for international buyers, who always seek the cheapest option.

The priority of profit over workers’ livelihoods causes many factories to cut costs by not conducting enough health checks and reducing the cost of their employees’ meals, the report said.

At a meeting last week held by the Việt Nam General Confederation of Labour, Vũ Quang Thọ, former head of the Union Institute and a former member of the National Salary Council, said when he himself visited workers, he heard of female workers who agreed to commercial surrogacy at a rate of US$10,000-12,000.

“They have to do so to make ends meet, because the salary was too low to cover their daily needs, let alone savings for the future,” he said.

When it comes to legal protection, the country falls short.

Trade unions’ lack of bargaining skills and power, as well as exhaustion and potential loss of jobs, are the hindrances for the workers to raise their voices and fight for their rights.

Ironically, all workers asked said they aspire to have higher wages but are wary of pushing too hard as it could put their livelihoods at risk. Two workers in Ninh Bình Province told researchers of the Oxfam study that even though they had disagreements with their working conditions, no one dared lead a strike – even the union president.

Earlier ratification?

Given these issues, maybe the Government should consider earlier ratification of ILO Convention 87 on freedom of association rather than by 2023.

Currently in Việt Nam, there is only one legally recognised system of trade unions. The organisation of trade unions is prescribed by the Charter of Vietnamese Trade Unions adopted by the Việt Nam General Confederation of Labour (VGCL).

ILO international labor standards require that trade unions must be independent of authorities in both organisational operation and financial issues; and trade unions must also be independent of employers in carrying out their activities.

In Việt Nam, trade unions are defined in the Constitution 2013 as socio-political organisations of the working class, and in reality are strongly reliant on the state in terms of both financial support and personnel management.

That, somehow, explains the shortcomings of trade unions in protecting workers’ rights.

For a better future, trade unions in Việt Nam, either working independently or under the labour confederation, should always work to ensure labourers’ rights are met. They should work to make sure more efforts are put into lifting employees’ earnings to the living wage standard, social protection for all workers is guaranteed and to foster a friendly environment for collective bargaining.

In order to do this, Việt Nam’s current trade unions have much to do to renew themselves aggressively. Free trade agreements like the EVFTA, together with the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), are thus very important to encourage the country’s leaders and policymakers to stay on the course of effective reform.

Although domestic law – the revised Labour Code – might already be in conformity with the ILO’s substantive provisions, actual procedural provisions of the ILO’s Conventions will require employers to seriously carry out certain obligations provided by the supervisory mechanism of the ILO.

Incorporating and implementing ILO Convention 87 in Việt Nam will contribute to making the country more reliable and respected in international trade relations. Doing this would also ensure the security of employment relationships, which play an important role in maintaining socio-political stability, fostering economic growth, and attracting FDI to the country.

There are many reasons for Việt Nam to continue its employment relationship reform, and do it soon, because it would only bring about benefits for all.

VNS

 

BUSINESS ETIQUETTE IN VIETNAM – CUSTOMS AND TIPS

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Vietnam has one of the oldest cultures in Southeast Asia. While national identity can be complex given Vietnam’s history, locals are proud of their language and its complexities, as well as the distinctiveness of their society and culture. The expression dat viet (Vietnamese land), for example, encapsulates the notion that Vietnamese society have an organic relationship to their environment.

Since the introduction of Doi Moi – or ‘renovation’ policy – in the 1980s, which began the transition from the country’s socialist economy to a market economy, Vietnam has experienced many significant changes, including a rise in the standard of living. These factors have in turn inspired a flurry of foreign businesses looking to start operations or expand in the country.

But for those planning to do business in Vietnam for the first time, it is important to learn about the country’s vibrant culture and traditions. Those that do will find it easier to work in the country.

Greetings in Vietnam

While English is gaining in popularity, Vietnamese remains the dominant language: it is spoken by 86 percent of the population. Vietnamese appreciate it if a foreigner tries to learn simple phrases in their language such as xin chao (pronounced as ‘seen chow’), meaning “hello” in Vietnamese.

A handshake and a slight bow of the head is the general custom for saying hello and goodbye. Meanwhile, Vietnamese names are written and introduced in the following order: last name, middle name, first name.

Business etiquette 101

When possible, business meetings should be done in the presence of someone who can translate. Be prepared to attend several meetings as successful deals are rarely completed in a few encounters. Conversations held in person are preferred over online communication and emails.

Cold calling is not recommended. It is recommended to be introduced to a potential business contact by a common acquaintance or third-party reference. Business meetings should be scheduled in advance and should avoid major public holidays, such as Tet, which is the Vietnamese New Year celebration.

For first time meetings, it’s best to meet at your potential partner’s office. This avoids the possibility of a last minute cancellation because of any travel difficulties on behalf of your business partner.

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When giving or receiving business cards, do so with both hands. Time should be taken read the name on the card – hastily stuffing a business card or barely giving it a glance is deemed offensive. When possible, seek to create a business card that has both English and Vietnamese translations.

If offered tea at the reception, accept it, as this is a sign of hospitality. In the North, hot tea is typically served, while in the South, meetings take place with ice tea or soft drinks.

It’s best to have an agenda before the meeting so the business partners can acquaint themselves with what will be discussed. It is also helpful to have all documents translated in Vietnamese.

Silence is common in meetings and means that your partners are thinking about your interests. Interrupting this time of reflection can be considered rude. Further, silence may be used when someone disagrees, and so not cause a loss of face for attendees.

Seniority and hierarchy are important in Vietnam. For example, showing the eldest person respect by giving them your business card first is appropriate.

Saying “yes” may merely indicate understanding, rather than actual agreement. It’s best to follow up and confirm with your business partner to understand if you have agreed on a deal.

It is typically the guest’s responsibility to signal the end of the meeting.

The first few meetings will involve getting to know each other, as compared to the West, where first meetings tend to remain on a business level. Social connections are important, and Vietnamese may make most of their business decisions based on how they see you as a person outside of the business.

Many Vietnamese will ask questions that may seem personal to a foreigner. Discussing one’s family and personal life is normal and is seen as a sign of friendliness and interest.

It’s common to give gifts at the end of a business meeting. These can be small and does not need to be expensive. A possible item could be a pen or stationary with a company logo or an item typical from your country of origin.

Business attire

Business attire will depend on the location of the meeting. For example, Hanoi is known for its white-collar environment, while Ho Chi Minh City is more business casual.

Typically, business partners should dress modestly, avoiding bright colors. Suits are appropriate for men, while skirts and blouses are fine for women.

The Vietnamese working week is typically from Monday to Friday with office hours from 7:30 a.m. to 4:30 p.m.

The concept of ‘face’

As with many other Asian countries, the concept of face is extremely important in Vietnam. While in the West being frank and direct is considered a good trait, direct disagreement or raising of questions in public can be seen as a person to “lose face” in Vietnam. Face is a concept that can be roughly described as reflecting a person’s reputation, dignity, and prestige.

Foreigners should be aware of unintentionally causing a loss of face due to their words or actions. The important takeaway is to treat your business partners with respect. If you have suggestions or challenges, its best to bring them up carefully in private.

Eating and drinking

If invited as a guest in a Vietnamese home, bring fruit, sweets, flowers, or incense. Avoid giving handkerchiefs, anything black, yellow flowers, or chrysanthemums. The best dishes will likely be offered to you; be sure to taste and share these dishes.

Wait for the host to give the signal to start the meal before sampling any of the food. It is considered good manners to finish all the food in your plate.

At a restaurant, wait to be seated. In most cases, the oldest in the group will be seated first. Use both hands to pass items and never pass anything over someone’s head. When motioning for a person to come over, do not use your finger, and use your hand to beckon instead.

If paying, tipping of five to 10 percent is appreciated, though not customary.

Safety

Vietnam is a relatively safe country to travel. However, business travelers need to be aware of petty and opportunistic theft, particularly in major cities such as Hanoi and Ho Chi Minh City.

Valuables should be stored in hotel safes, while mobile phones and wallets should be kept out of sight to minimize the risk of pickpocketing, particularly in tourist areas. While the police are not always helpful, they will generally treat foreigners with respect.

Taxi scams are common, including the use of faulty meters, or taking a longer route to a destination. Business travelers should book transport through their hotel or use registered taxis such as Mai Linh (green) or Vinasun (white with green and red stripes). These taxi companies also have card machines for direct payment.

EU NOMINEE VON DER LEYEN FACES SCEPTICAL PARLIAMENT

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STRASBOURG — Was an intense two-week political operation to woo European lawmakers long enough to win German defence minister Ursula von der Leyen the top job in Brussels?

The 60-year-old conservative will replace Jean-Claude Juncker as president of the European Commission if she secures a majority in the Strasbourg assembly. If she fails – and Tuesday’s secret ballot could be close – then Europe faces a summer of institutional infighting between parliament and the 28 EU leaders.

And if her victory is secured only thanks to eurosceptic members, her position will be weakened even before she takes over as the commission’s first female leader in November.

She has had barely two weeks to make her case since the leaders declared her the nominee after a tense three-day summit, casting aside candidates backed by parliament.

But von der Leyen has responded with a series of written promises to the main centre-right, socialist and liberal blocs that she hopes will get her the necessary 374 votes.

And she announced on Monday that she would step down from Angela Merkel’s German government this week whatever happens in the vote, underlining her European ambitions.

The three main mainstream groups are expected to back her, but the Greens and the far-left will not, and the vote is a secret ballot that could contain surprises.

“It will be a small ‘yes’,” one well-placed European source predicted.

“She’ll be elected with fewer votes than Juncker was five years ago.”

The former Luxembourg premier received 422 endorsements, and anything less than 400 would be seen as disappointing for the German veteran minister and mother-of-seven.

The vote is scheduled to begin in the Strasbourg assembly at 6:00pm (1600 GMT) and the result announced around one-and-a-half to two hours later.

It will be keenly followed in the Brussels EU institutions and in the 28 European capitals.

The new head of the European Commission is due to take power on November 1, immediately after the latest deadline for Britain’s departure from the bloc.

He or she will have to manage the Brexit aftermath, Italy shirking its debt targets and efforts by Poland and Hungary to flout the EU-mandated rules of liberal democracy.

For that, the commission president will need a reliable majority in Strasbourg, but May’s elections threw up a more fragmented EU parliament than ever.

Frenetic horse-trading

At the same time, the pan-European political groups that came together after the vote are frustrated by the way von der Leyen’s candidacy was foisted on them.

Under the EU Treaty, the head of the commission is nominated by member state leaders, if necessary by a qualified majority vote.

But many in parliament and in the Brussels EU institutions wanted the 28 heads of government to choose one of the parliamentary groups’ lead candidates.

Instead, they cast aside those names and – after intense closed-door negotiations – chose to call on von der Leyen.

France’s President Emmanuel Macron had insisted on the leaders’ prerogative to choose, and Germany’s Angela Merkel was happy to find a role for an ally.

The biggest single group, her and Merkel’s conservative European People’s Party (EPP), will back her, despite seeing their parliamentary leader Manfred Weber cast aside.

But the centre-right’s 182 votes will not be enough by themselves, and the socialist S&D with 154 members and the liberal Renew Europe’s 108 are unconvinced.

The Greens, meanwhile, say she will not get their 74 votes, and the hard-left GUE/NGL will also withhold their 41.

The far-right Identity and Democracy, which includes Italy’s League, France’s National Rally and Germany’s AFD, says it is “unlikely” they will back Merkel’s ally.

Which leaves the right-wing eurosceptic ECR, weakened by the loss of many British Tories but still 62-strong thanks mainly to Poland’s PiS governing party.

The ECR has promised to be “pragmatic” and concerned officials admit it might be members hostile to closer EU integration that get von der Leyen over the line.

AFP

 

VIETNAM-BELGIUM PROGRAMME CHURNS OUT SKILLED POSTGRADUATES

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HCM CITY — The Vietnam- Belgium Programme, which offers master’s programmes in several business-related streams, is helping train human resources to meet Việt Nam’s needs.

The programme has been run by the HCM City Open University and Université Libre de Bruxelles’s Solvay Brussels School of Economics & Management since 1995.

On July 13 a graduation ceremony was held to present master’s degrees to 23 students in business administration, marketing and communication management, and business quality and performance management.

So far around 1,400 students have graduated from the programme.

“The programme is creating opportunities for students to pursue a master’s degree, contributing to consistently turning out high-quality human resources for our society,” Assoc Prof Dr Nguyễn Minh Hà, rector of the HCM City Open University, said.

 

PROMPT ACTION NEEDED TO TAKE ADVANTAGE OF FTAS

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HÀ NỘI – Opportunities provided by free trade agreements (FTAs) will only exist on paper if local authorities and enterprises do not take prompt and concrete actions to take advantage, experts said at a meeting on Wednesday in Hà Nội.

Việt Nam has signed many trade deals with different countries and regions but both local authorities and businesses have been slow to prepare plans for these changes, said Ngô Chung Khanh, deputy director of the Ministry of Industry and Trade’s Multilateral Trade Policy Department.

Speaking at the seminar on business and investment opportunities arising from the EU-Việt Nam Free Trade Agreement (EVFTA), Khanh said inertia is common among Vietnamese authorities and businesses. He expressed his fear that businesses are not doing enough to take advantage of the ongoing implementation of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).

As an example, Khanh cited the Prime Minister’s request for local authorities and ministries to build action plans to implement CPTPP. To date, only a few have submitted their proposals.

“Up to now, we’ve yet to receive full action plans from ministries, sectors and localities,” he said. “Implementation is too slow and if we continue this stagnancy then all the presentations on opportunities will remain on paper and never become a reality.”

EVFTA and CPTPP are two new-generation FTAs with a broad scope and the highest level of commitments that Việt Nam has ever signed. Under the two trade deals, some reference calculations estimate Việt Nam’s gross domestic product (GDP) could increase by between 1.3 per cent and 1.6 per cent.

EVFTA has a very short schedule for tariff reduction with many Vietnamese products enjoying tariff-free exports to the EU. Việt Nam’s competitors in the region such as China, Thailand and Malaysia have not signed an FTA with the EU, but that does not mean they never will. Khanh told businesses they must move quickly to take advantage of the FTA while Việt Nam is in an advantageous position.

He pointed out the indifference of local businesses to the trade deal. Only two foreign direct investment enterprises have sent questions on issues of tax codes or rules or origin concerning EVFTA.

Việt Nam and the EU signed EVFTA and the Europe-Việt Nam Investment Protection Agreement (EVIPA) on June 30. Khanh said the two agreements would be submitted to the National Assembly for approval in October this year and the European Parliament would vote around the same time to hopefully have the deals take effect next year.

Vũ Tiến Lộc, chairman of the Việt Nam Chamber of Commerce and Industry (VCCI), said Việt Nam’s economic openness was second in ASEAN only to Singapore but its competitiveness and capacity for integration were still low.

Việt Nam placed 77th out of 140 countries in the 2018 Global Competitiveness Report by the World Economic Forum. It placed 99th for institutional competitiveness and 101st in business competitiveness.

The EU is highly demanding market and has little direct competition with Việt Nam so Vietnamese products have advantages, Lộc said. To make the most of their strong position, Lộc said local businesses must satisfy many requirements for origins, environmental standards, labour relations and sustainable development. This means they need to restructure their production processes and technologies – VNS