Barack Obama says Vietnam 'presenting unprecedented labor reforms' thanks to TPP

At a press conference with Singapore’s Prime Minister Lee Loong, President Barack Obama said the Trans-Pacific Partnership would improve global labor rights.

Specifically, he said Vietnam had agreed to improve its labor policies as a condition of entering into the 12-country trade agreement, which has been contentious this election cycle.

"Vietnam is drafting and presenting unprecedented labor reforms, changing their Constitution to recognize worker organizations in Vietnam for the first time," Obama said.

We fact-checked another TPP claim from the press conference, on tariffs, elsewhere. Here, we look at Obama’s Vietnam claim.

Labor law

Before diving into what the TPP asks of Vietnam, let’s look at what protections Vietnam already affords workers. The 2013 Vietnamese Constitution provides for "break policies," "equal and safe" work conditions and protects against "discrimination, forced labor" and under-age workers.

It also establishes trade unions to represent workers and protect their legal rights. According to a 2012 "Law on Trade Unions," however, this is an entity "placed under the leadership of the Communist Party of Vietnam." Essentially, all trade unions must affiliate with the Vietnam General Confederation of Labour.

We consulted various law firms that cover Vietnamese labor law, and they detailed Vietnam’s already-existing labor protections. According to the the Southeast Asian law firm Tilleke & Gibbins, Vietnam sets a maximum of 48 hours per week and provides mandatory rest periods of at minimum 24 consecutive hours per week. Employers are required to provide protective equipment, and there is maternity leave typically around four months.

The labor law firm Fisher Phillips  classified Vietnam’s labor law as "employee-friendly." We spoke to White House representatives who acknowledged Vietnam had such provisions.

So, what then, was Obama referring to as "unprecedented" labor reforms?

Work-in-progress

The White House pointed us to a "consistency plan" negotiated as part of the TPP, titled the "United States — Vietnam Plan for the Enhancement of Trade and Labour Relations."

Key to the plan is the decoupling of labor unions from the government. Workers must be allowed to spontaneously form a grassroots labour union. The union must be registered, but not affiliated with, the government, thus allowing it to operate by its own rules and procedures.

"Vietnam shall ensure that its law does not mandate a labour union registered with the competent government body to operate according to the Statutes of Vietnam General Confederation of Labour," the plan states.

Experts we spoke to said the term "unprecedented" is valid.

"The workers can form their own unions," said K. William Watson, a trade policy analyst at the libertarian Cato Institute. "That's going to be a big change for Vietnam just because of the way it currently regulates labor unions. It’s not going to be compatible with the TPP at all."

John Sifton, Asia Advocacy director at Human Rights Watch, said independent unions are the first step to having workers enforce their own rights.

"This other stuff about minimum wage and working ours, all of that, is meaningless if you don’t have unions," he said. "Without unions, without the capacity to organize, whatever workers’ rights are written down on paper don’t have teeth."

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Changes to labor laws are still going through the country’s legislative process, they said. While acknowledging that might be the case, Sifton said Obama’s claim was "premature" for suggesting current changes.

"They’ve signed up to a whole lot of things and if President Obama had simply said, ‘Vietnam has promised and must do a whole bunch of things under the TPP,’ then he would have been perfectly accurate," Sifton noted. "But he made it sound like Vietnam has already started to do things and that’s just not true."

Enforcement

Changing the law is one thing, but actually implementing it is another.

Prior to the TPP entering into force, Vietnam must change its labor code to correspond with the side agreement, the White House explained. The plan also provides a review mechanism after-the-fact whereby the United States can impose higher tariffs on Vietnam if the provisions are not being implemented.

Nonetheless, experts questioned both the likelihood of Vietnam implementing the new rules and of the United States enforcing them. Both Sifton and Watson noted America’s poor track record in enforcing other free trade agreements’ labor provisions.

"They have a terrible record of enforcing labor chapters as evidenced by the Central American Free Trade Agreement and the North American Free Trade Agreement and the Colombian Free Trade Agreement," Sifton said. "So he says they’re enforceable and that’s true on paper and its true technically, but it doesn’t mean it would be be enforced."

Watson, on the other hand, said it is in Vietnam’s economic interest — due to their significant gains from the TPP — to abide by the proposed legal changes. In order to attract investors, they have to follow the rules and won’t be too antagonistic to the agreement, he explained.

"It’s not a situation where this was something that they didn’t want and now they’re going to try to sidestep it," he said. "Vietnam is — economically — the country that will benefit the most from the TPP."

Vague language in the consistency plan could also hinder implementation, said Angie Ngoc Tran, a professor at California State University. In an article in New Mandala, she criticized the deal for not offering enough protection for independent unions and other procedural issues.

On the flip side, Cathleen Cimino-Isaacs at the Peterson Institute for International Economics, said the TPP has made progress to address past failures. The Peterson Institute for International Economics has been described as a pro-trade economic policy group. 

"Although the TPP does not address all the concerns of labor rights advocates, it represents an important step forward," Cimino-Isaacs wrote. "The bilateral plans negotiated alongside the TPP are a major innovative component, targeted to address the substandard labor conditions of most concern. Implementation of the mandated reforms would deliver significant improvements in Brunei, Malaysia, and Vietnam. The monitoring mechanisms attached to Vietnam’s plan in particular seem more proactive than past U.S. efforts."

Our ruling

Obama said "Vietnam is drafting and presenting unprecedented labor reforms" and is "changing their constitution to recognize worker organizations in Vietnam for the first time."

There are some problems with the claim.

Experts said actual changes to the law have not happened yet but acknowledged the drafting process might be underway. They did agree, however, that the changes proposed would qualify as "unprecedented."

More critically, they said it’s hard to enforce the changes being described and the United States has a particularly poor track record of doing so.

On balance, we rate this claim Half True.

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(Update Aug. 5: This fact-check was updated to include Cimino-Isaacs' comments.)