Washington, D.C.
October 29, 1998

CONTACT INFORMATION

United States
National Administrative Office
Bureau of International Labor Affairs
U.S. Department of Labor
200 Constitution Avenue, NW
Room C-4327
Washington, D.C. 20210
(202) 501-6653
(202) 501-6615 fax

Canada
Inter-American Labour Cooperation
Labour Branch
Human Resources Development Canada
Phase II, 8th Floor
165 Hôtel de Ville
Hull, Quebec K1A 0J2
(819) 953-8860
(819) 953-8494 fax

Mexico
Oficina Administrativa Nacional de México
Secretaría del Trabajo y Previsión Social
Av. Periférico Sur 4271
Edificio A Planta Baja
Col. Fuentes del Pedregal, Deleg. Tlalpan
14149 México, D.F.
(525) 645-4218
(525) 645-4471 fax

Secretariat
Commission for Labor Cooperation
1211 Connecticut Ave, N.W. suite 200
Washington, D.C. 20036
USA
(202) 464-1100
(202) 464-9487 fax
1(800) 682-5557

The North American Agreement on Labor Cooperation calls for the Council of Labor Ministers to promote cooperative activities among the three countries on labor issues. Pursuant to this directive, the National Administrative Offices (NAOs) of the three countries have developed a Cooperative Activities Program under which they sponsor trilateral, tripartite events on a regular basis. These activities are coordinated by the three NAO Secretaries: Irasema Garza, United States, May Morpaw, Canada, and Rafael Aranda, Mexico.

This conference on Labor-Management Relations in North American Multinationals: Legal, Cultural and Economic Environments, held in Washington, D.C. on October 29, 1998 was one of a series of conferences focusing on industrial relations.

I would like to extend my sincere appreciation to the speakers who participated in this event. Thanks to their insight, and the guidance of moderator John McKennirey, the discussion was fruitful and engaging. I would also like to acknowledge Don Carter from the Department of Labor, Office of the Solicitor,the staff and students from American University, and my staff for assisting with the coordination of this event.

The views expressed by the individual participants are their own and do not necessarily represent those of the governments of the United States, Canada, or Mexico. Please note that remarks made in Spanish and French were translated to English.

Irasema Garza, NAO Secretary
U.S. National Administrative Office
Bureau of International Labor Affairs
U.S. Department of Labor

A Cooperative Activity of the United States, Mexico, and Canada

Labor-Management Relations in North American Multinationals: Legal, Cultural and Economic Environments was a cooperative activity under the North American Agreement on Labor Cooperation (NAALC), presented by the United States, Mexico and Canada. The conference explored labor-management relations in the context of the operations of multinationals in the NAFTA countries. The goals of the conference were to:

• Examine the practices by which multinationals maintain uniformity and deal with diversity across borders: how do they adopt to the different legal, cultural and economic environments of the NAFTA countries pursuant to the labor side agreement.



• Examine how unions in the North American countries work with multinationals.



• Develop a better understanding regarding the functioning of labor-management processes in the three countries.



• Exchange experiences and create a dialogue between labor and management.

The moderator gave a brief introduction to the session topic, and then each member of the panel of experts delivered a short presentation on the topic. The panel members and the round table participants then discussed the topic, guided by the moderator. At the conclusion of the discussion, each member of the panel of experts provided brief observations and conclusions based on the discussion.

PARTICIPANTS:

UNITED STATES DELEGATION:

ANDREW SAMET
Deputy Under Secretary for International Labor Affairs
U.S. Department of Labor

IRASEMA GARZA
Secretary
U.S. National Administrative Office
U.S. Department of Labor

LEWIS KARESH
Deputy Secretary
U.S. National Administrative Office
U.S. Department of Labor

DAVID GRANT
Baker & Hostetler

SAMUEL ESTREICHER
Professor
New York University School of Law

MARLEY S. WEISS
Associate Professor of Law
University of Maryland School of Law

STEVE M. BECKMAN
International Economist
UAW

JIM NICHOLS
Former Vice President Industrial Relations
Joseph E. Seagram & Sons, Inc.

CANADIAN DELEGATION:

MAY MORPAW
Secretary
Canadian National Administrative Office
Human Resources Development Canada

VIVIAN COLLINS
Senior Policy & Program Officer
Canadian National Administrative Office
Human Resources Development Canada

ROBERT COOK
Senior Counsel
Legal Services
Human Resources Development Canada

MATTHEW LEVIN
Economic Counselor
Canadian Embassy

ANTHONY GILES
Professor
Department of Industrial Relations
Laval University

JOHN A. COLEMAN
Partner
Ogilvy Renault

GERRY BARR
International Affairs
United Steelworkers of America

NORMAN BEDARD
Vice President of Human Resources
Cambior Inc.

ROBERT CHERNECKI
Assistant to the President
CAW - Canada

MEXICAN DELEGATION:

RAFAEL ARANDA
Secretary
Mexican National Administrative Office
Secretariat of Labor and Social Welfare

ALESSANDRO RUBIO MAGANA
Director of Cooperative Work
Mexican National Administrative Office
Secretariat of Labor and Social Welfare

FRANCISCO LUIS SAENZ GARCIA
Director of Legal Contracts
Labor and Social Welfare

GILBERTO A. GONZALEZ TREVIÑO
Director of Human Resources
Siderurgica Lazaro Cardenas las Truchas

YVONNE STINSON
Consultant
Trade Policy and Trade Promotion

ISAAC MAYA PEREZ
Finance Secretary
Union of Workers in the Chemical & Petrochemical Industry

AGENDA ITEM:

Welcome and Conference Overview

Andrew Samet

Remarks by Heads of Delegations

U. S.: Irasema Garza
Canada: May Morpaw
Mexico: Rafael Aranda Vollmer

The Adjustment of Multinationals to Each Country's National Environment, and How Unions deal with Multinationals

Moderator: John McKennirey, Executive Director, Secretariat, Commission for Labor Cooperation

U. S.
Prof. Samuel Estreicher, New York University School of Law

Canada
Canada: Prof. Anthony Giles, Department of Industrial Relations, Université Laval

Mexico
Yvonne Stinson, Consultant, Trade Policy and Trade Promotion

Round Table Participants:

U. S.
David Grant, Baker & Hostetler

Steve Beckman,UAW

Canada
John A. Coleman, Partner, Ogilvy Renault

Bob Chernecki, CAW

Mexico
Gilberto A. Gonzalez Treviño, Director of Human Resources, Siderurgica Lazaro Cardenas las Truchas, S.A. de C.V.

Questions and Answers

Differences in Negotiated Conditions of Employment in the NAALC Countries

Moderator: John McKennirey

Mexico
Lic. Francisco Luis Saenz Garcia, Director of Legal Contracts, Mexican Ministry of Labor and Welfare

Canada
Prof. Anthony Giles, Department of Industrial Relations, Laval University

U.S.
Prof. Marley S. Weiss, Associate Professor of Law, University of Maryland School of Law

Round Table Discussion:

U.S.
Steve M. Beckman, International Economist, UAW

Jim Nichols, Former Vice President, Joseph E. Seagram & Sons, Inc.

Canada
Bob Chernecki, Assistant to the President, Canadian Auto Workers

Normand Bedard, Vice President of Human Resources, Cambior Inc.

Mexico
Gilberto A. Gonzalez Treviño, Director of Human Resources, Siderurgica Lazaro Cardenas las Truchas, S.A. de C.V.

Questions and Answers

Closing

U. S.
Irasema Garza

9:15 a.m.

MS. GARZA: Good morning and welcome to the Labor-Management Relations in North America Seminar, part of our cooperative programs for 1998.

Before our introduce our Heads of Delegations, I'd like to mention a few administrative details.

One is that you've got translation equipment. And you can find the English translation in Channel 4, the Spanish translation in Channel 5 and the French translation in Channel 2.

Also, I'd like to mention that on the table right outside this room there are a number of publications related to the North American Agreement on Labor Cooperation and the work of the NAO. Please help yourselves to those materials.

Now it's my great pleasures to introduce to you Mr. Andrew Samet. Mr. Samet is the Deputy Under Secretary for International Labor Affairs at the U.S. Department of Labor. On January 1st, 1998, Mr. Samet was appointed to serve as the Deputy Under Secretary for International Affairs. In his current role he is responsible for U.S. Government participation in the International Labor Organization, the ILO, and represents the United States Government on the governing body of the ILO.

He's forming policy on issues related to worker rights in the international labor standard and he's responsible for the Department of Labor's studies and programs on international child labor issues.

The Bureau of International Labor Affairs which he heads also implements the North American Agreement on Labor Cooperation. And it's the labor side agreement to the NAFTA. In other words, Andrew Samet is my boss.

Prior to joining the Clinton Administration in 1993, Mr. Samet served as legislative director to Senator Daniel Moynihan. Mr. Samet joined Mr. Moynihan's staff in 1987 and his responsibilities included international trade, transportation, environment, labor and welfare policies.

And prior to joining the government, Mr. Samet was in private law practice. He's a graduate of Yale University, Carlton University in Canada, with a master's from that institution, and he has a law degree from Georgetown University.

He's written numerous articles and edited two books on international trade and human rights issues.

Please join me in welcoming Andrew Samet.

MR. SAMET: Thank you very much, Irasema. All of that was true and obviously understated, except for being Irasema's boss, as many of you know. (Off mike.)

So, let me welcome all of you and thank you all for being here. And let me also acknowledge May Morpaw and Rafael Aranda Vollmer from our counterpart institutions and operations, and thank them for all the work they've put into today's efforts.

We are, as you know, here as part of a series of efforts that we've had on labor-management issues and industrial relations throughout the process of building, even before the North American Agreement on Labor Cooperation was signed and implemented and subsequently. This has been a very important subject for us and we place a lot of emphasis on establishing a strong effort in this regard.

As you also know, this program is part of the overall cooperative activities efforts that our three countries undertake as part of the NAALC. Let me use that term, NAALC. I'm sure all of you are familiar with it.

And really, the purpose of this effort is to continue to increase the understanding of the laws and the institutions and the practices of labor relations in the three countries. We always look for common ground and common understanding, but we also always recognize that all three might be doing things differently in many ways. And that's obviously part of the benefit of this kind of exercise is getting a better perspective on what you do, based upon looking at it through contrast and comparison to what others do.

I also think it's worth noting that we're meeting here today in the same month that our three Secretaries -- if I can apply that word to Canada, for the moment -- Secretary Herman, Secretary Bell and Mr. McCauley -- have been meeting. Had a meeting earlier this month in the beautiful place on Prince Edward Island. We all very much enjoyed the opportunity to visit Prince Edward Island.

And they also met in fact again this month -- indeed, last week, Viña Del Mar, Chile, where they were altogether as part of the meeting of the Hemisphere Labor Ministers, which comes out of, in many ways, the direction of the leaders of the Hemisphere who met in Chile earlier this year as part of the Hemispheric Integration Process.

And the leaders have adopted visions on the labor dimensions now and all the Labor Ministers are very much engaged in working on that subject.

Indeed, what we've done in the context of this agreement is obviously very helpful and will continue to be helpful as that process goes forward.

Let me just mention and review for you, as some of you are well aware of, that previous at conferences that we've had on this topic and in fact, the relationship between the three countries began even before the NAALC itself was negotiated.

1992 was the first conference between the three countries on labor protection. And this began a building block which led, under President Clinton, to the negotiations of the NAALC, and subsequently a much more accelerated and deepened relationship under the agreement on this subject.

In 1994, we had a conference which focused on issues of labor-management cooperation and productivity concerns, and we had conferences in Canada in 1996 which examined the ways that industrial relations practices in the North American countries had just changed with the global economy.

In this period, I think it's fair to say that we have come quite a long way in terms of the base of knowledge about each other, the practices and how they actually work, as well.

Today's conference is designed to take an additional step in this regard by looking at labor relations in the context of multinationals, companies that operate industries in the three countries.

Although obviously, again, there are many similarities, there are some very important differences in the ways that business is done in terms of labor and management in each country. And by looking at how multinationals address some of the different legal, cultural and economic environments, we again hope to expand our base of understanding in this area.

I think it's also important to note, as I alluded to earlier, that what we do here will also helps to guide us as we look at these labor-management issues in other forums beyond our NAALC context.

If we look at the United States, at least I believe it's fair to say that with the other countries involved, we're becoming much more focused on this activity in various other fora. We're engaged in these questions in the context of our relationship with the European Union. We're engaged in a number of activities pertaining to this subject.

This is an issue in the APEX context. And obviously, as I said before, the Hemispheric Labor Ministers have adopted very important additions to the work plan that takes in much of the issues of labor-management relations. And so a lot of the work that we've done in this context, I think, will emerge as an important guidepost in how to effectively deal with these issues elsewhere.

We've designed the conference to try to maximize and extend the dialogue between us. In the first two sessions we want to look at how multinationals adjust to each country's national environment and how unions work with these multinationals. In the second session, we'll look at differences in negotiating conditions of employment in the three countries and examine how they impact operations in North American countries.

Obviously to engage in any valuable discussion it's important to bring all the parties into it and to elicit an exchange and have a true dialogue. And in this conference, each of the sessions will include a panel of academic experts from the three countries and a roundtable selection that includes labor and management representatives.

Obviously, in addition to our delegations from each country today, we're very lucky to have Mr. John McKennirey here, who's the Executive Director of the Committee for Labor Cooperation, and he will play a very pivotal role in guiding the discussions.

If there's anything that I want to emphasize today, it would be that we really would encourage a full discussion. We want everyone here to feel part of this dialogue and to fully participate.

It's our hope that this meeting, along with the other cooperative activities under the agreement, will again enhance and further our understanding of labor-management systems in the three countries. I hope each and every one of you find this a valuable experience and that we'll be able to draw upon your participation in future activities.

And with that, I'd like to thank everyone; Irasema and her staff and everyone from the other countries who made this day possible. And most of all, thank each of you for being here and I hope you will fully participate.

Thank you.

MS. GARZA: Next, I'd like to introduce my counterparts from Canada and Mexico.

From Canada, Ms. May Morpaw, and from Mexico, Mr. Rafael Aranda Vollmer.

May, would you join us at the podium?

MS. MORPAW: (translated from French) Good morning, everyone. (return to English) Good morning. (translated from Spanish) Good morning. (return to English) I get a strange feeling. I've been looking at the back of all these heads. (translated from French) Good morning again. On behalf of the Canadian Delegation, I wanted to tell you how happy we are to be here in Washington today, not only for the conference, but also for the tour...[inaudible]...this morning and also for...[inaudible].

(return to English) On behalf of the Canadian delegation, I would like to say how pleased we are to be here at this conference on Labor-Management Relations in North American Multinationals. We understand and appreciate the interest of the U.S. National Administrative Office in organizing and hosting this conference today.

(Off mike.)

In closing, let me take this opportunity to extend my thanks in advance to the Canadian speakers and the roundtable participants. They are here on short notice and I thank them very much for taking up the challenge and I look forward to everyone's participation in the discussions that will follow.

MS. GARZA: Thank you, May. And welcome to you and the Canadian delegation. On behalf of the U.S. Department of Labor, we're very happy you're here and could join us for this event.

And likewise, I'd like to invite now my counterpart from Mexico, Rafael Aranda, and welcome to the Mexican delegation and Rafael to the United States. We're very happy to have you here today.

MR. ARANDA VOLLMER: (translated from Spanish) Good morning. We are very happy to have this opportunity to participate in these forums. This is a unique agreement for the future of the three countries, with their different cultures and situations, with respect to better working conditions and productivity [off mike]

The success of this achievement stems from the effort put forth by the three countries to expand the construction of a mutual foundation of labor systems, with seminars, conferences, and workshops at which they will solve some of the economic and social differences. We have always tried at these conferences to make them a forum for working together to find solutions for labor-related problems. These conferences afford us the opportunity for a dialogue on this situation and to respond.[off mike]

It is important that we take advantage of this exchange of information to build systems that are adapted for cooperation.

I want to end here by thanking...[off mike]. Thank you very much.

MS. GARZA: Thank you, Rafael.

It's my pleasure to introduce to you Mr. John McKennirey, who's going to serve as our Moderator. Mr. McKennirey, in April of 1995, was appointed jointly by the Secretary of Labor of the United States, Secretary of Labor and Social Welfare of Mexico and the Minister of Labor of Canada, to be the first Executive Director of the Secretariat for the Commission for Labor Cooperation.

The Ministers earlier this year approved a second three-year appointment, so we have John for another three years.

As many of you know, the Commission for Labor Cooperation is composed of the Council of Ministers the Secretaries from Mexico and the United States and the Minister from Canada, and its governing body has an international secretariat as its administrative arm, and John is the Executive Director of that administrative agency, so that the Secretariat is really our international institution under the agreement, as opposed to the domestic officers which are the National Administrative Offices.

Mr. McKennirey, in 1993, was the chief negotiator for the NAALC. (Off mike.)

Immediately prior to his current appointment, Mr. McKennirey was Director General of Staff Relations and Compensation in Canada's Department of National Affairs. Mc. McKennirey has also held a number of other senior positions in the Canadian public service.

Mr. McKennirey holds a bachelors from Brock University and a masters from the University of Ottawa, and he's also pursued graduate studies at the University of Lourain in Belgium and the University of Ontario.

Please join me in welcoming John McKennirey.

MR. McKENNIREY: Thank you, Irasema.

This is a marvelous room for this kind of meeting today because it really facilitates participation by the audience as everybody is close to one another and we can create the kind of day that the organizers hoped to achieve.

This is a day in which all of you will be able to participate almost as much as the panelists taking part in this. And we will blur the distinction between the panelists and the audience. And I know from looking at the list of participants and the audience, that this is a wise idea.

Let me say first of all a word of encouragement for everybody to feel free to speak in French and Spanish because we have excellent simultaneous translation and this may make it a lot easier for you to participate.

We all probably, and I must give this message to myself, could speak a little more slowly to give the translators the opportunity to keep up with us. This also gives me the opportunity not to get two or more sentences ahead of my brain.

Here's our format for this morning and this afternoon. We'll be asking three experts, one from each country, to give us a 10 or 12 or 15 minute brief set of introductory overview remarks devoted to our morning and afternoon topics. We'll then take a coffee break this morning, which will be about 35 minutes from now or so, for 10 or 15 minutes.

We'll come back and ask each one of our roundtable participants to give us a couple of minutes of observations on what they've heard.

This is a surprise conference. Nobody's seen the papers and nobody knows what they're going to hear. And a lot of people said when they were coming in, they didn't know what people were going to discuss.

So it should be interesting to hear and the panelists have the challenge to develop some observations when we come back after coffee.

And then we'll throw the floor open to all of you to pose questions or make comments addressed to individuals on the panel and we'll have a discussion. Please use the microphones for translation purposes and amplification purposes.

And that will be our format.

The moderator is supposed to make a few introductory remarks I see in my notes, and I don't have any introductory remarks. And I think we've had a lot of introductions. But if you don't mind, I would like to read a couple of sentences from a marvelous article I was reading by Duncan Campbell of the ILO, the International Institute for Labor Studies, on the interdependence of the labor markets, just because I thought it made such a good introduction to today's discussion to leave out my remarks with Mr. Campbell's.

He says this. That trade structures an international division of labor through the product market but the cross-border dependencies of labor markets are being even more deeply forged through the expansion of international production. With international production -- that is, production that involves various subsidiaries or parts of a single firm -- with international production, labor markets are linked through bonds of ownership or contact in a tighter more systematic way than through the impersonal workings of the market. And at the center of this expansion are the activities of multinational corporations whose number has increased from 7,000 in 1970 to over 37,000 today, with over 150,000 affiliates worldwide.

Although MNC's, multinational corporations, employ directly just over 70 million persons worldwide, which is a tiny fraction of the global labor force but an enormous number, an estimated one-third of the world's private sector output is under the governance of MNC's.

In 1992 the global value of sales of MNC's and their affiliates surpassed $500 billion, a figure 25 percent greater than the value of total world exports.

So we're dealing with, as we all know, an enormously important phenomenon, this phenomenon of international production and the intensification is deepening of the interdependencies of global markets between countries that it brings about. And it's implications for labor relations are hopefully the topic of today.

Well, without further introduction, I'm going to introduce our experts in the order in which they appear in their agenda.

Professor Samuel Estreicher -- by the way, I'm not going to give long introductions. We've got to get into the meat of this sooner or later today. You have their bios in your packages.

Professor Samuel Estreicher from New York University School of Law. Also, I think he's practicing in the area of employment law.

Professor Anthony Giles from the Department of Industrial Relations at Lavale University in Quebec will speak from the Canadian point of view.

And Yvonne Stinson, who is to my immediate right, is a consultant and now jack-of-all-trades, and making millions of dollars in the private sector, having formerly been in the public sector, has a lot of experience in international trade and now a leading consultant in Mexico City.

Those are our three experts and I'm looking forward to hearing from them.

Professor Estreicher, if you will.

MR. ESTREICHER: Thank you, John.

When I first got the invitation, I thought it was a mistake. First, seeing the word expert was a bit discomfiting, on all three countries. I had enough trouble knowing how to get home at night.

Secondly, reading the agenda and not being able to figure out what to say this morning was the second problem.

The third problem, the more serious problem. I knew this was a mistake; offering an academic 10 minutes. For an academic, 10 minutes is barely enough time to prepare one's throat.

As I see it, our mission this morning is to sort of lay the foundation for the later discussions, sort of to set out the legal, cultural, economic and other social factors that underlay the labor-management relations system and then we will then turn to how the multinational corporations and the unions and all are faring in that environment.

We're laying the groundwork, the foundation. The later sessions will build the house.

What I'd like to do is sort of set out seven dimensions or seven factors that we might want to consider. And there may be others that might be helpful. And then I'll say a few words about each factor as it pertains primarily to the United States.

The first factor is the level of formalization or the level of transparency of the system. And what I mean by formalization and transparency is to what extent is the labor relations law as it is on the books, the statute books and code books or the caselaw, to what extent does the formal law actually describe practices on the ground. Because we know that countries and unions are not theorists. They're practical people. And they're going to care about how the law actually impacts behavior.

Now, I would think that the U.S. and Canada are at the high end of that transparency dimension in the sense that the law you see on the books pretty much reflects the law that's going to impact the parties involved. And unless you're in Mexico -- I have a sense that companies in Mexico will need to be much more into consulting the code or even their expert lawyers. They will have to get a better feel for the institutions on the ground and the power, for example, of labor unions, which will not be reflected in the code books.

That's one. You may disagree with what I've just said, but I think that's an important dimension.

The second dimension is public policy support for labor organization and collective bargaining. And we want to think about how these three countries array themselves in that dimension. I know less about Mexico, but my sense is that Canada is considerably more supportive of labor organizations and collective bargaining than is the United States.

Why? Because they have laws that make it easier for unions to obtain bargaining authority without elections. Two, they have laws, as in Quebec, which make it very hard for companies to maintain operations during strikes. That has implications for bargaining power, bargaining leverage. Three, they have rules which impose arbitration in first-time bargaining situations where the parties themselves are unable to reach agreement. And in the United States, we have none of those features. I'll talk a little bit about some of the features we do have.

But we want to look at public policy support for labor organizations and collective bargaining.

A third variable or dimension is to look at the extent to which unions are faring well or badly in private companies. I think it's useful to exclude from the discussion unions in government offices because government tends to be relatively immune from market forces and the kinds of cross-border market forces that are the subject of today's conference.

In the United States at the present time, trade unions represent no more than 10 percent of workers working in private firms; 10 percent private union density. And, by the way, in the United States, the numbers to not vary. Members and non-members covered by collective bargaining is about the same percentage.

In Canada, I believe, and there has been debate about this, but the range is between 25 and 30 percent of private sector workers. It's a declining number in Canada but the numbers are declining much slower than in the United States.

Now, I don't know the union density figure for Mexico but I hope to be enlightened on that by this Ms. Stinson.

That's the third dimension I'm offering you to as the extent to which unions are faring well or badly in private firms.

A fourth dimension is the extent to which the government dictates or regulates the terms of the labor contract or the employment contract. In Europe, Continental Europe, we have a tradition of governments spelling out a great many of the terms of the employment contract, by which I mean the pay, benefits -- you know, a pension benefit and what level; severance pay if there's a termination of the employment relationship; and rules governing dismissal, both individual and collective. In Continental Europe there is a great deal of regulation of the content of those terms. It's not subject to labor by collective bargaining or by individual contracts.

I believe that here in North America, in general, Canada and the U.S. follow a tradition of voluntarism, where by and large we allow these terms to be decided by contract, with some exceptions. In the United States, we do have the Fair Labor Standards Act which sets our minimum wages and also requires the payment of an overtime plan for work over 40 hours a week. We have some minimum occupational safety and health standards for the workplace, and we have antidiscrimination laws by the dozens.

We do not have a wrongful dismissal law in the United States. There's one state that does, and that's Montana. Montana is the only state in the Union that has a wrongful dismissal law. And we do not any laws that require the payment of severance pay, and we do not have any laws that require the provision of pensions. Pensions are a matter of contract.

Once you do have a pension and you are seeking an exemption or a deduction for your expenditures for contributions to the pension plan, then you have to follow certain federal standards. But there's no federal law obligation or state law obligation that you have to provide pensions.

I know less about Canada, but I suspect Canada is closer to the voluntarism than maybe Mexico and certainly than Continental Europe.

So that's the fourth dimension; state regulation of the content of the employment contract.

A fifth dimension, scope of bargaining and where does bargaining occur. Now, those familiar with Continental Europe would assume that bargaining occurred at the multi-employer level. If you want to establish a business say in the textile industry or in the steel industry or in the automobile industry, you might join a multi-employer association just so you could have a say in the terms negotiated on your behalf. And if you stood outside of the multi-employer association, you would find Canada and -- sorry -- in Germany and France that there's an administrative mechanism imposing the collective agreement on you.

So, there are a lot of pressures in Continental Europe to join the multi-employer association and bargain on the multi-employer level.

I know less about Mexico but I believe that the bargaining does occur on a multi-employer industry wide level in Mexico. We certainly will be enlightened on that point.

In Canada, I believe there is more multi-employer bargaining going on than in the United States, and nothing like the Canadian model. I'm sorry. Nothing like the Continental model, Continental European model.

In the United States there's been a decline in the multi-employer bargaining but we see it only in several industries. We see it still in construction. We see multi-employer bargaining in trucking to some extent. We see multi-employer bargaining in the maritime and in longshoring, and we see it, interestingly enough, in the film and theater industries and sports industries, sort of the high end of the labor market. But it is a declining phenomenon.

I think if you looked at the American labor relations scene in 1945, you have seen multi-employer bargaining as a larger part of the scene than it is today. It's declining everywhere.

We do not have in the United States that they do in Continental Europe to provide for the extension of multi-employer agreements to the non-union sector. Thus, if you are setting up a company in the United States, all of the incentives are to stay away from multi-employer associations if you can, and operate either non-union or operate on a level of bargaining that is very decentralized. In otherwise, site by site, and require the unions to organize unions site by site.

I should say also in this connection that under U. S. labor law, pre-hire contracts are unlawful outside of the construction industry, so that actually the employers and unions cannot enter into agreements before the workforce is hired. That is the law in the United States outside of construction. Which again is another factor that I think depresses the incidence of multi-employer bargaining.

And that's the fifth dimension, the scope of the bargaining.

A sixth dimension is the nature of the regulation of the bargaining process. If you do have a union and the union has bargaining authority, what are the rules governing the manipulation of the process.

In the United States, again it's largely a system of voluntarism. We do not regulate the substance of collective bargaining with some very limited exceptions. We do not tell the parties that they have to reach an agreement, that they have to make concessions, what the terms of the contract should be. It's voluntarism.

We do not have a tradition in the United States of resolving disputes in the private sector by interest arbitration. There are just arbitrations where the parties or a state designates a third party to decide the content of the collective agreement. In the event of an impasse, we do not have substitute jurisdiction over states. Indeed, if one parties wants interest arbitration, it is not a mandatory subject of bargaining. It may not be insisted upon by that party over the reluctance of the other party's discussions. So, interest arbitration is a very insignificant feature of the United States.

I believe in Canada, in most of the provinces -- I'll be corrected on this by John and by our friend from Laval University, but I believe in most of the provinces they have the provision of interest arbitration for bargaining failures in first-time relationships. We do not have that. Of course, that is something maybe we would like to see, but we don't have it.

What American labor law does do is regulate the process of collective bargaining. It doesn't regulate the substance of collective bargaining. It regulates the process.

American labor law decides whether a subject is a mandatory subject. As I just illustrated before with my example of interest arbitration, certain subjects are not mandatory. And that means that the parties don't have a duty to bargain over the subjects. And moreover, the party that wants some change in that subject can't insist, can't make it deal breaker. There is no duty to bargain let's say over interest arbitration and it cannot be a deal breaker. If you make it a deal breaker, that is a failure to bargain in good faith.

Say the union wants a seat on the corporate board. As I understand it, that's not a mandatory subject of bargaining. The union can't make it a deal breaker. We do see union members on corporate boards but that usually is the result of concession bargaining leading toward more concession in the context of it. Concessionary bargaining of course you're willing to listen to what the union wants in exchange, even if they're permissive subjects.

So we regulate which subjects are mandatory in the sense in which there's a duty to bargain over them, and two, they can serve as deal breakers. That is, you can insist upon them in an impasse.

The law also regulate when you have an impasse. Now, we do this in two different ways in the United States. Under the Railway Labor Act, which is the statute that governs the airline and railroad industries, a federal agency called the National Mediation Board ultimately decides whether the parties are at impasse. It's only when the NMB decides the parties are at impasse. It's only at that point that the parties can resort to self help, whether it's a strike by the union or a lockout by the employer, or implementation by the employer.

In the other industries that are covered by the National Labor Relations Act, the impasse determination is made by the parties themselves and they basically take a gamble that they're going to get it right. And so the parties will engage in bargaining and at some point the employer or the union will say there's no further need to talk. We're at impasse. They then resort to self help, let's say. And then at some later point there might be a legal dispute about that, and the Labor Board will tell you whether in fact they qualify as impasse.

By and large today -- I'm running out of time. Two minutes.

By and large today, it is the employer who's seeking to declare impasse and not the unions. And it's the employer that takes this risk. Under American labor law, unions can strike even before impasse outside the railroad and airline industries.

An employer can maintain operations. A strike force is lawful. And employers can maintain operations during strikes. We do not have laws like the Quebec laws which bar the hiring of replacements, whether permanent or temporary, or laws like the Quebec laws that use management help to maintain operations during strikes.

There are very few limits on what employers can do to maintain operations. I believe they cannot bribe strikebreakers. They can't offer strikebreakers more than they offer the union. And they also cannot engage in extraordinary rewards, like offering strikebreakers seniority. But short of those kinds of things, employers can attempt to maintain operations by the hiring of permanent or temporary help or management help.

Now, I should say something about the work of the permanent replacement. The permanent replacement could be tantamount to discharge but need not be because you still are an employee and as jobs open up you have the preferential right to those jobs once you declare you're willing to come back to work. They can. It can be the same.

The final dimension is firing costs. And you might say why am I have firing costs here? Well, the firing now would be to the matrimonial laws. If you make it hard to dissolve a marriage you'll have fewer people going into a marriage. And the Continental Europeans do not understand this point. They think they can make it hard to divorce and at the same time -- (off mike).

The Americans try to make it very easy. I'm sorry. Most of the states try to make it very easy to dissolve the relationship in the hope that relationships will form.

We have serial monogamy in the United States; serial marriage; and we have easier divorce. And that's our matrimonial law. But it's also our labor law.

And we are not (inaudible) in the United States, but there's also very few restrictions on firings. If you're under a union contract with a just cause provision and if you are a non-union contract, there are no federal or state laws that require that you justify your dismissal to some outside agency. Again, with the exception of Montana. (Off mike.)

You do have to pay vested benefits if there's a pension plan. Under the federal Plant Closing Law, you have to give notice of a plant closing or you can buy out the employees by paying them the equivalent of the notice period, and you have a very healthy array of discrimination laws. So there are lawsuits over the discrimination laws but there are no laws for dismissal generally either individually or collectively.

I'm sure there are other dimensions but those are the ones I wanted to bring up this morning.

Thank you.

MR. McKENNIREY: Thanks very much, Professor Estreicher.

Professor Anthony Giles from Laval University.

MR. GILES: Thank you, John, and good morning gentlemen.

What I'm going to try to do in the next 10 minutes or so is to point out quickly and crudely a few of the key similarities and differences among the three countries in their labor regimes. Then I'm going to go on to ask whether these differences are all important for multinationals. And if so, how they cope with them.

And then I'm going to finish up by commenting again, extremely briefly, on the implications of multinational labor relations strategies for unions and the connections between the North American Agreement on Labor Cooperation.

We don't have to go over the detailed differences that we've just heard about. It think it's important to begin though by mentioning that in all three countries it's about the same basic set of formal labor principles: freedom of association, right to collective bargaining, right to strike, and so on.

And although there are a host of differences in the detailed way that the state regulates employment or, as we heard, the different division of power between federal and provincial and state jurisdictions, different way that (inaudible) are regulated or the way the union bargain is framed in the countries, instead of looking at these differences through the prism of formal legal principles, what I thought I'd do is look at the three systems from the point of view of a company that's trying to decide where to set up a plant in each of the three countries, or the kind of company that's already in operation in the three countries and is trying to figure out how to cope with these differences.

So what, from that point of view, are the key differences.

Well, the first one is that it's obviously a lot harder to unionize in the United States than in Mexico or in Canada, largely due, as we've just heard, to legal differences in the three systems for unionizing.

Second, where the workforce is already unionized, the U.S. and Canada begin to look a lot more similar and Mexico becomes (inaudible), since most unions there enjoy somewhat less independence from the state and from employers than do unions in Canada and the U.S.

Third, in all three countries the predominant level of negotiation is probably the enterprise or establishment level, although someone locating in Mexico will have a slightly greater chance of encountering multi-employer bargaining and industry bargaining.

Fourth, it's my impression anyway that collective agreements in Mexico are on average in comparison with American collective agreements, less detailed and regulate the workplace in less depth than in the other two countries. Conversely, Mexican collective agreements are more likely to be shaped by the laws than they are in Canada and the United States.

A fifth difference that a company will find is that the regulation of strikes is most advantageous for employers in the United States in the sense that they have the most (inaudible) for strikebreakers and so on.

And the last difference of possible interest to employers is that the political mode of the union is different in the three countries. In the U.S., the political practices of unions is still focused chiefly on lobbying. In Mexico, the largest union confederation is still fairly closely tied to the traditionally known political party. Canadian unions are sort of caught between these two models; frequently allied to a political party ultimately or not, but remaining fiercely independent when their party happens to come to power.

Now, my second question is this. Do these differences matter for multinational corporations? Do they care how unions are organized and how collective bargaining is regulated, strikes conducted and what kinds of political ties their unions might have?

I've argued that there are in fact two ways that these differences come into play. First, in some circumstances international differences in labor relations can have an impact on where multinationals choose to locate. Second, once a firm has operations up and running in two or three of the NAFTA countries, the differences between the countries may be difficult to pursue uniform labor relations across countries. Though, I'm going to also suggest that this might not necessarily be a fault from the point of view of the multinational corporation.

Let's look first at locations. One of the reasons that firms might wish to operate in one or both of the other countries is to simply put their grasp in that country's market. In an era of continental free trade, some products and services -- the hotel rooms we stayed in last night, for example, need to be produced at the point of sale. In other cases, it might be simply political expedient to locate in another country to gain access to contracts.

So, to penetrate a national market will also be the dynamic driving the expansion of multinationals. It's sometimes necessary to locate a facility in one or both of the other countries, either through a wholly-owned subsidiary, a joint venture, and so on. And in cases such as these, the industrial relations businesses that we will be talking about this morning simply don't come into play. They are instead -- and I'll go on to say in a few minutes -- the strength that has to be managed after the fact of the (off mike).

The second logic for operating in another country is to take advantage of the differences. And these differences again might have nothing to do with labor relations. It might be a question of transportation costs, natural resources, proximity to sources of supply and so on. But in some cases, it might very well be to take advantage of differences in labor relations and labor markets more generally.

The classic case, of course, is the Canadian company that moves an assembly operation to the United States or an American company that moves an assembly operation to Mexico. Another example might be the company that locates a research and development unit in a city rich in universities and high tech groups. For another kind of operation there are other kinds of human resources, as we hear in Canada, the number of call centers. Continental call centers have been located in various (inaudible) cities in Canada, obviously drawn to a particular (inaudible).

So, from the point of view of a multinational, labor relations differences between the three countries might sometimes just be a fact of life that has to be accepted or they might be crucial, good strategy. Even when the differences are incidental in labor relations, multinationals still have to cope obviously with the increased level of complexity and diversity that comes from international operations.

So let's turn to this question and ask how they do it.

Generally speaking, the research on multinationals shows that compared with other corporate functions -- accounting, finance, research and development, multinationals tend to decentralize the day-to-day management of their labor relations. They tend to use locals rather than expatriates to manage labor relations at the establishment level. They tend to accept and adapt to local laws and customs. They also tend to pay a wage premium compared to local competitors in the host country. And they try whenever possible to avoid unionization or, when that's impossible, strike a deal with the most compliant (inaudible).

Now, that's sort of general findings from the literature but it's also important to notice that there's a fair amount of variation in the way multinational labor relations strategies function.

For example, the country of origin of a firm has an affect on the way it operates in other countries. Research shows pretty consistently that American multinationals, for example, behave very differently than say Japanese or European multinationals. In particular, American multinationals tend to shape their foreign affiliates, or try to shape their foreign affiliates, in ways that conform to the U.S. model, whereas European companies are far more apt to take on the local coloration wherever they are operating.

A second reason why the strategies differ is the nature of the local regime they're operating in. For example, where there's a highly developed and broadly respected set of regulations in a country, multinationals will conform to them. But in countries where regulation is lighter or is not strictly enforced, they tend to use this marginal (inaudible) to import their own ways of doing things. So usually the same multinational's degree of uniformity in its labor relations policy and the actual content of its labor relations policy may very well vary from country to country.

A third source of variation in the way multinationals manage the variations across the three countries flows from the very reason why they establish relations abroad and the way they tie those operations together.

To begin with, a multinational pursues what's known as a stand-alone policy. It operates a number of more or less free-standing units in different countries, each one serving the local market. It's typically much more ready to adapt to local variation in labor relations. Control from the center in these cases is usually restricted to financial control.

A case in point here is the Canadian printing multinational (inaudible), which has extensive operations throughout Latin America, the States and Canada, which gives a (inaudible) amount of time to each of its local businesses because each one is serving a local market and (inaudible) in that environment.

On the other hand, the firm that operates in a more integrated strategy; that is, a production system that's linked horizontally across national borders as you find in the automobile industry, for example, it's much more likely to chafe the local peculiarities. And this obviously despite the paradox that the reason that they located different functional units in different countries is to take advantage of those very differences.

An example. Here's a firm that opens a subsidiary for the express purpose of reducing costs. A firm that runs an assembly operation or a network of subcontractors in a low wage area, like Canada's maritime provinces, for example. Sure. They've gone there to take advantage of say low labor costs or some other factor, but the very fact of the establishment in question is the link in a longer production chain pushes them to search for methods of forming and standardizing across borders.

So we have to be careful not to generalize too, too much, although we cited the fact that individual company industrial relations strategies are shaped by county of origin, the nature of the host regime where they operate and by their production standards.

Now, despite these variations it still remains true that labor relations in multinationals tends to be quite decentralized. They don't on average run roughshod over local (inaudible). But I would argue that this isn't necessarily because of any profound or abiding respect for local culture or norms, nor that it's the only option available. In fact, I'm going to conclude this party by suggesting that this strategy of decentralization actually works to their advantage in the field of labor relations or at the very least it's not a disadvantage.

To begin with, where standardization or policy uniformity isn't initiated to begin with in the stand-alone plants, for example, there is really no compelling need for standardized regulations and policies unless the particular corporate culture demands it or psychological need for tidiness overcomes common sense.

Second, there's a number of researchers in the human resources field have discovered and pointed diversity in the way local units are managed can be quite creative and beneficial in the sense that they can lead to local innovations that can spread be spread across the corporation and the creation of an internal learning process.

Third, a formally decentralized labor relations approach helps to avoid the possibility of a concerted challenge from employees and unions whose bargaining in a decentralized system is restricted to the establishment level and thus well away from strategic sites of power.

And lastly, a formally decentralized approach to labor-management relations reinforces divisions between workers and unions in the different countries in which the multinational operates and makes them more susceptible to the creation of a dynamic of competition within the corporation. A dynamic of competition, for example, for investment in new plant and equipment which can then lure them into a fairly vicious downward spiral of concessions.

So all of this suggests that the question of uniformity versus respect for local differences and uniquenesses might be somewhat misleading in the sense that the absence of uniformity doesn't necessarily mean an absence of coordination from the center, either direct or indirect coordination.

I'll give you one quick example of strategies to reorganization work. I've been studying the operations of a Swedish multinational -- ABB, as it's known. One of the things that we've found in this research is that the central headquarters of the corporation never tells the local plants how to manage their labor relations. There is not even someone in charge of labor relations at the international level. And so bargaining is entirely local, plant by plant. But ABB is pursuing a policy of technological standardization and rationalization, at least in the samples that we've been studying. And what is happening and the dynamic that is creating, is that that's forcing labor relations adjustments in all the different plants according to a central program -- or a coordinated approach, excuse me.

Production and job classifications loosely report (inaudible), reductions in job security and so on. It's a coordinated policy. Because it's not a labor relations policy, because labor relations continues to be handled on a local level, it appears as if a lot of autonomy has been retained when in actual fact autonomy is shrinking rather markedly.

Do I have time to speak two words about unions or --

MR. McKENNIREY: Tony promised that if I gave him a few more minutes in the morning -- he's going to be on a panel in the afternoon -- he'd be a little shorter in the afternoon. So I'll hold you to that, Tony.

MR. GILES: Okay.

So where does this leave unions? The easy answer and one that the union representatives on this panel this morning will have heard umpteen times before is international coordination. You need transnational organization and negotiation is really the only viable response to the multinational organization. Anything less is going to leave them open to be played off against each other, or worse, they can increasingly marginalize their plant.

I'm not saying it's the easy answer because I'm not -- but the very real obstacle is the lack of interest by employers and governments, the variance of language and culture, and not least -- and I think the fundamental problem is to go forge a genuine common set of interests around the issue across borders.

A couple of words about the mechanism that brought us here together today, the North American Agreement on Labor Cooperation. The people in this audience probably don't need to be told that the agreement doesn't provide any means for unions to organize, bargain or strike on a comparable basis. It wasn't its purpose.

On the other hand, it has stimulated a lot of contests between unions and other social groups in the three countries. And I don't think it's an accident that most of the complaints that have been launched under its provisions concern multinational companies, which is our topic today. So in a sense, it's planted seeds which just might produce the fruit of more collaboration.

I have one sort of more pessimistic reading of the situation. And that is that the entire process is complaint based, which tends to focus on extreme cases rather than on the norm.

By way of conclusion, I think obviously the unions have a long way to go before they can deal effectively with multinationals. Not necessarily (inaudible). But at a higher level.

I'd like to finish up just by quoting one of the people who's sitting in the audience this morning, Professor Harry Arthur, who near the end of an article on a related subject wrote the following passage.

He writes: "Attempts to regulate labor conditions and practices on a transnational basis, however desirable, are problematic both conceptually and in practical terms. Transnational labor standards will obviously be attacked as intruding upon national sovereignty, as a form of disguised protectionism designed to preserve jobs in the advanced countries. Even in the attempt to force labor standards down to a lower transnational norm in those countries in which we've seen it, in practical terms, given the difficulty of setting up and enforcing labor standards in the domestic context, it's hard to imagine regulation could be transnational.

"Nevertheless", -- and this I think is the spirit of this morning's session, -- "we can probably look forward to spirited debated over whether and how to establish transnational labor standards and a good deal of experimentation with actual law and with international market institutions."

That could be one of the themes of our later discussion.

Thank you.

MR. McKENNIREY: Thank you very much for taking us in that direction. And I think it complements very well Professor Estreicher's legal review of the United States, Canada and Mexico.

Now we're turn to Yvonne Stinson.

MS. STINSON: (translated from Spanish) Good Morning. I'll be speaking in Spanish. It is a pleasure for me to be with you today. [inaudible] We will be talking about relations between unions and companies. I will begin with the Mexican companies, and end with the multinational companies.

In the case of Mexico, with the change in its economic course that occurred early in the 1980s, relationships between unions and companies began to experience a major change. Before this change in course, as in fact one of my fellow panelists has said, there was a single powerful union ... [inaudible] ... the official union, which is allied to the party that used to dominate in this country and that now, as a result, lost ... [inaudible] ... control of the country, lost with the new political changes resulting from changes in Mexico's policies have also changed the power of these ... [inaudible]. Economic changes have had an impact on labor relations in Mexico and, in fact, a union like CTM which began in 1951 (?) and which occupied the leadership of the union, where more than 50 percent of Mexican workers were affiliated with this union, and all the bargaining was done, as one of the panelists has said, was similar to Europe with the collective bargaining contracts, but this has changed, and this probably lasted up until the 1980s, the previous decade. There has been a slight change in that a leader who lasted close to sixty years leading this union about the past ten years. Shortly before that, Mexico's presidents, who serve a six-year term, have always tried to wield their powers ...

In 1988, the forces began to change and a pact was signed with the private sector, the unions, and the government. This pact ended the ... [inaudible] ... but under this pact we are determining, through the study by a government committee, what is the wage level that could be increased and making some economic study that has to do with the country's economic policy with respect to wage increases. That is why this change of forces between the unions and the companies, previously and now. It was the president prior to the present one who succeeded in changing these labor relations with the private sector ... [inaudible] ... any other. This had to do with the desire that people in my country be able to find out ... [inaudible] ... and the desire to make production processes efficient and give both Mexican and multinational companies a degree of security. Because as you know--and I won't discuss this at further length--our labor laws, which are very strict, require an enormous number of things that are not required of the other NAFTA countries, that makes it ... [inaudible] ... and makes it anti-Mexican ... [inaudible]. That even prevents our domestic companies from expanding, or trying to participate internationally. And so, if we make a list of this policy ... [inaudible] ... to try to make the domestic companies in foreign ... [inaudible] ... competition ... [inaudible] ... What do I mean by this change that is occurring? I am referring to the fact everything used to be negotiated at the level of ... [inaudible] ... but now, increasingly in recent years, the workers ... [inaudible] ... by themselves before the Conciliation and Arbitration Board, with the individual contracts they have with the companies. In other words, we are still in the process, and so many unions are trying to find a way to redefine themselves.

Now, there are a lot of unions in Mexico, and most of them are termed official. There are few independent and strong unions and a couple of years ago people said that there would be a redefinition of the unions in Mexico, with more independence to ... [inaudible] ... but because there are many people involved, this has not yet been achieved and we are still in the process. Mexico's challenge is precisely to get directly involved in globalization and economic modernization on a par with its trading partners, and to be efficient enough to be able to compete on the markets, both the domestic and export markets. The 1996 crisis also dealt a very heavy blow to all the plans for redefining the labor relationship between the unions and the companies, since the fact that many workers were laid off ... [inaudible] ... an economic crisis. This ... [inaudible] ... a lot because it creates a sense of insecurity in workers who are associated with these organizations, and these organizations have certain wage and salary requirements and certain contributions, but the mere fact that a person thinks there is a danger of losing his or her job has even made them curb some of their demands. Speaking of the transnational companies in Mexico and their labor relations, some of them, especially in the automotive industry -- Chrysler, Ford, Volkswagen -- who had problems a few years ago, especially with this federation ... [inaudible] ... The relations between the unions and the multinationals are much better now and demonstrate that there are very few problems that really are at the union level, at least as far as I could see when I visited a few plants, Volkswagen ... [inaudible] ... Chrysler said that this relationship of forces has been changing as time goes on and the Mexican workers, with the presence of these transnationals and the association of the unions at these transnationals, receive very good options if we compare them with the companies of Mexico and the unions that the Mexican companies have. Because it is important, and here I differ somewhat with my fellow panelists, we cannot try to standardize this type of situations throughout the NAFTA of which we are members. Experience is what has made us join associations, we are different, I speak differently, I am different, I see things differently. It is a cultural thing, it is a different way of looking at the world. We can become closer to each other, we can improve, but the difference persists. I believe that this difference is welcome; because of it we can exchange things, goods, experiences. But to begin to make laws uniform, to start comparing the United States, Mexico, Canada, to see who is better in this, seems to me not to be the right approach. One would have to compare the version [sic] between the unions of one country ... [inaudible] ... dependent unions, official unions, or unions at multinational or domestic companies, since it would be hard to compare apples with pears or oranges. It is worthwhile in terms of the exchange of goods because ... [inaudible] ... but in this type of thing that involves a culture and a way of doing things, I believe that you would have to do it within a given country, exchanging ideas in order to improve it.

MR. McKENNIREY: Thank you, Yvonne.

You can understand why Yvonne writes regularly for the newspapers in Mexico City. We have a good appraisal of the fact that all of these concerns take place within a social, political and economic context rather than simply multinational business dealings.

But with that, we'll take a break and come back in about 15 minutes.

(Whereupon, a recess was taken.)

MR. McKENNIREY: Beloved members of the audience, I think we'd better get into our discussions so that we don't eat up any more of our time.

It was a really marvelous coffee break. I certainly hated to bring it to an end myself.

Now, what we'll do at this point is simply go across our panel of roundtable participants and ask each of them to give us their observations on what they've heard this morning or any other relevant observations they want to make for about five minutes. And at that point then we'll open it up to the floor and ask you to use the microphones to make comments and address questions or comments to the whole panel or anybody on the panel.

For the sake of the people up at this desk, these gray mikes are for the recording of the session and we're told not to touch them. We'd better not fiddle around with these.

Okay. Our first commentator will be David Grant, who's a partner in the Baker and Hostetler law firm, a management side law firm, if I could say that here in Washington, D. C. and throughout the United States.

David.

MR. GRANT: Thanks.

First, I want to extend greetings from Betty Murphy who was slated to be on the panel this morning. Betty was unavoidably unable to be here. She has done a paper which I will make sure is left with the organizers today, but asked me to give you her greetings and profound regrets that she couldn't be here.

I think in the couple of minutes I have this morning, I want to take Professor Estreicher's very thoughtful framework, his seven dimensions and factors, and just kind of comment on those briefly.

I've kind of been doing this for 20 years as kind of an in-the-trench labor lawyer, and I think Professor Estreicher's comments give us a framework to kind of proceed off on a discussion of the issue of multinationals.

With respect to the level of formalization, the transparency of the system, I find that particularly for multinationals doing business in the United States there is a very high degree of formalization. And Professor Estreicher noted some of the particular laws and statutes, such as the Fair Labor Standards Act, the Occupational Safety and Health Act, Title VII of the Civil Rights Act of 1964 that apply. But particularly for multinationals, for example, who wind up doing business with the government, there's even a whole overlay of other obligations and laws, such as Executive Order 11246, which requires affirmative action and other laws, such as the Service Contract Act, which regulate not just minimum wages but regulate prevailing wages in the workplace on government contracts.

And so there is a very high degree of formality which inevitably leads to a formalization of the process which, for example, will lead to the use of lawyers all over the place, even in things like labor arbitrations and all their alternative dispute resolution and in other areas where otherwise the parties themselves might be left to kind of deal with each other.

I think there has been a trend in the last five or 10 years towards trying to minimize some of that formalization through the use of things like arbitration procedures in the non-union context. But all that's done has again, create even a greater degree of complexity by what relationships may or may not exist between -- or more precisely, what level of deference should be given to those decisions when they're dealing about statutory claims, such as claims under the Civil Rights Act, et cetera, that plaintiffs and others would have the right to go to court on.

So, I think Professor Estreicher was exactly right on that point.

With respect to public policy support, I think there has been a trend certainly in the last few years through the National Labor Relations Board which administers and enforces the basic collective bargaining process in the United States, to try and speed up some of the representation procedures which enable unions to organize. There are more timetables and limits and more restrictions being put on employers who may be trying to resist unionization. And so I think there is an increasing public policy support that does tend to shift somewhat depending on what party may be in power, but I think we have found in the last few years that it is becoming a little bit more difficult for employers to do some of the things that they might otherwise do to resist unionization.

Professor Estreicher talked about the fact that the government really doesn't regulate the terms of a labor contract but regulates the process. And I think we have found practically when multinationals come in, they sometimes are interested in -- because they want to take advantage of tax or other economic advantages, they're thinking about setting up a number of different and other subsidiaries.

And, of course, one of the things to bear in mind is although the government doesn't regulate terms of the labor contract, the Supreme Court has so stated to the extent that employers try and utilize corporate structures to avoid labor contractual obligations, the labor laws, such doctrines as the Alter Ego doctrine, the Single Employer doctrine and the like, will look askance at abilities of employers to avoid labor law obligations if there is common ownership, common control of labor relations, common management and interrelation of operations, among other things.

And in certain situations, labor contracts will very specifically be applicable to affiliated or separate subsidiary companies.

The scope of bargaining in the United States is one of those issues that practically I think most issues wind up being discussed at the bargaining table. But as I was listening to Professor Estreicher talk about these issues, things like subcontracting issues and others tend to create and blur distinction between what is a mandatory or necessary subject of bargaining and what is a permissive or the kind of subject that, as we talked about, you can't insist to impasse on. And those issues are not always terribly clear.

But again, it's through issues like that and through ways like that that there does tend to be at least indirect regulation of the substance of labor agreements. Because inevitably the regulation of process does lead to the regulation of substance. And for multinationals coming into the United States, that is a lesson that they have to learn.

There was a comment about firing costs as a dimension. And I think the one thing that I've noticed is that although the United States certainly is a job creation machine, there is no question that the panoply of laws that employers have to comply with have created significant expenditures, both in terms of internal bureaucracies to make sure that things like terminations of employment are done correct. But I think practically I can tell you from clients, multinationals or otherwise who deal with United States laws, they would say that there are clearly attendant economic costs to terminations of employment.

Professor Giles commented on the decentralization of labor relations in the way multinationals deal with the issues, and I have found that to be the case. I think that companies either going into the United States who are based elsewhere or United States companies doing business in Canada and elsewhere have a healthy appreciation for the fact that laws, custom and practice, et cetera, have to be dealt with on a local basis. And I think that's led in part to the kind of decentralization to which Professor Giles referred.

There certainly are exceptions to that, but I think that has been the trend. And I don't really see that as something that's going to change.

One trend that we were talking a little bit about that I do see coming down the pike despite some of the difficulties that may exist. Because of economic and trade dependency, I do think that multinationals are going inevitably to deal and have to deal with transnational union cooperation and alliances. That may create some issues concerning labor solidarity, what that means, what that may mean in terms of self-help in which unions engage across borders to assist each other. And I think those are some of the issues as we head into the next millennium that multinationals are going to have to deal with.

So, John, I think I'll stop with that.

MR. McKENNIREY: Thank you very much, David, for your excellent point by point commentary and also for self-regulation.

Let me turn to someone in the United States, from the labor side, Steve Beckman, who's an international economist with the UAW.

MR. BECKMAN: Thank you, John.

Well, you've now heard about the problems of companies operating in the over-regulated U.S. labor market. Certainly, it was a surprise to me and not quite the description of the U.S. system that I would have made myself.

And like the others on this panel, not having known what was going to be presented, it's been a challenge trying to figure out which of the 15 or 20 sort of listed questions in the agenda to even think about commenting on.

But one issue that does arise of necessity is the impact of the increased integration in the three markets and the way that affects production organization and the way workers interact with management.

In terms of the U.S. experience, I'd simply remind people that since 1977 the American labor movement has been trying to reform U.S. labor law to make it neutral and we've been unsuccessful in achieving that objective.

So in terms of the environment in which American unions operate, the imbalance is one that we're constantly reminded of in organizing and bargaining. Even more so in organizing. And the ability to perform the most basic functions of representing workers, organizing workers to represent them, is a very difficult struggle in the United States, a situation that's quite different from what prevails in Canada and Mexico.

I think Tony pointed out a sort of useful way of distinguishing the situations that are going on in NAFTA. And the one that I think is most relevant to this seminar is where companies are in fact integrating production. Having separate production sites or local production is a very old phenomenon. It does have a very decentralized structure. And that's not really where the action is right now and it's not what the opponents of NAFTA like to think it changes.

So let me just comment briefly on that integration process and how it affects workers.

I think there's no doubt that employers are constantly thinking about ways in which they're going to take advantage of the differences in the systems in the three countries in ways that make their lives simpler or more profitable, make their companies more profitable. And that's been our experience and I think it's been the experience of workers in the region as companies introduce not uniform but similar production systems in all three countries and organize work in similar fashion, and thereby achieve productivity levels that are fairly comparable among the three countries. Not identical by any means, but comparable.

They are trying to achieve efficiencies in their own operations through purchases of supplies, purchases of machinery, organization of production, that makes for a smoother flow of the goods that are traveling internationally within the region. By the same token, they are not trying to standardize wage levels. They are not trying to standardize health and safety protections for workers. They are not trying to standardize the benefits that they pay throughout the region. But they are trying to arbitrage what kinds of provisions they have to make to different workers.

And one of the things, one of the issues that you see raised throughout the world, and particularly in Mexico in the last 10 years -- Ms. Stinson referred to this -- is the goal of increasing efficiency and the way it's described by the company, flexibility. Increasing flexibility for the way they interact with workers.

And that flexibility is really a shorthand term for more control over the employment relationship, less government intervention in that process, less union intervention in that process, and the ability to treat workers individually, set their terms of work, have them follow a set of rules that the company produces with nobody else intervening in trying to help set those rules.

And you see the results of this all the time. In Mexico, in many of the big multinationals companies -- and Ford and Volkswagen have been raised. In Ford, in 1987, I believe, the entire workforce was fired at one plant and rehired under new conditions and new wage levels.

At Volkswagen in 1992, I believe, the same thing happened; 17,500, 15,000 workers fired and rehired the next day or a few days after a rather lengthy strike, a few uncertain moments. But rehired under very different labor conditions which were much more advantageous to the company's control over the operation of the plant and a reduction in the influence of the union in that process.

We've experienced this in the United States very dramatically as companies have tried to gain greater control over the workplace and their organization of it. And they have used the increasing efficiencies that are taking place in Mexico and in Canada, where appropriate, to put pressure on American workers to lower wages, to accept fewer benefits, to diminish labor costs.

And that is the strategy, as we see it, of the integration process and the production integration process for the big multinationals that operate in this region. They are very much interested in standardization but, as has been raised, in standardization at lower levels of protection for workers and greater levels of control of the workplace for the company. And, of course, less government intervention in that process, as well.

And you see that happening in the countries where there has been traditionally greater government and union control, and you see a variety of barriers put in front of workers in the United States who are trying to improve our ability to influence the way the process takes place.

So I think these are the realities that we see. Certainly the issue of transnational union relationships, union alliances to try to combat this, the companies playing us off against each other, is something that, again, like the decentralized structure of international operations of companies, is not a new thing. International solidarity is a very old union process and yet the current environment creates a set of new conditions that require greater intensity of these relationships and the breadth in which they affect union organizations.

But as Tony pointed out, it is not a simple process. I was telling my brother from the CAW and I remind people of this all the time. There was a time when the Canadian auto workers and the UAW were one union, represented together in one union, and now they are two union who represent workers in Canada and the United States. And this is a situation where the cultures are very similar, where the economic conditions are relatively similar, and yet the differences, the national differences, are quite important.

Trying to bridge that divide between more dissimilar countries with different labor histories, different labor situations, different traditions, is that much greater. And while there have been a lot of contacts that have been established and that will continue to grow, there is a relatively long road to go before we can talk about multinationals bargaining in any serious way, although it is certainly an interesting and desirable issue to discuss.

Thank you.

MR. McKENNIREY: Thanks you very much, Steve.

Turning to Canada, I'll ask John Coleman, a partner in the Ogilvy Renault law firm in Canada, to give us some comments from his perspective.

John.

MR. COLEMAN: Thank you.

Let me first point out for the record that as a management-labor lawyer, it's quite surprising for me. It's the first time I'm to the left of Mr. Chernecki.

I'm picking up on Professor Giles' comments with regard to decentralization and giving you perhaps a bit of a Canadian perspective.

I'd like to start with a common parable about four private school students in an international school who were each asked to write an essay about the elephant. And the British student writes, of course, -- the topic of his essay, is "The Elephant And Its Habitat." The French student writes about the love life of the elephant. The American student writes -- the title of his essay is "Towards a Newer and More Improved Elephant." And the Canadian essay is "The Elephant: Is it Provincial or Federal Jurisdiction."

I start off this way because Canadian companies are quite used to having to adapt where they have multi locations to numerous different labor jurisdictions, just operating in different locations within Canada. And I think it's important from the perspective of an attorney who receives requests for opinions from U.S. companies seeking to do business in Canada that it be understood that in Canada, provincial labor relations is the rule. So it's provincial jurisdiction in the matter of labor relations which sets up 10 -- in some cases more -- provincial labor codes.

In addition, you have a federal labor code governing the companies that come within federal jurisdiction, and those are companies such as transportation companies, banks, et cetera, who have a completely distinct set of rules as a federal undertaking.

Now, that means a different labor code for labor relations purposes. It means a different labor standards act for labor standards issues which are quite important in each province. It means different human rights acts in each province, as well as for the federal. And all of these acts create different standards, different processes that have to be taken into account by any multinationals setting up in Canada. And indeed, in determining where that multinational will set up in Canada, and in which province.

The other element, of course, is Quebec. (translated from French) You know that in Quebec we are a separate jurisdiction -- although the word is often controversial -- a separate society. (return to English) And there will be additional issues in Quebec, such as the linguistic regulations which do apply, as well as in a more peripheral basis but nonetheless important, immigration issues, which do normally fall within the exclusive federal jurisdiction, but there are some interconnected issues and jurisdictions for the Quebec government.

That being said, as I want -- as I set up to note, Canadian companies have had to deal with the different dynamics in each jurisdiction and they can be quite different. And the most frequently asked questions that we get deal with such issues as, as was already pointed out earlier, certifications.

Certifications are, with the exception of one recent exception, generally determined without a vote. This is often an anathema to Americans. American counsel will call us and say, "What do you mean, there's no vote?" Ontario has recently enacted certain changes which we may hear about later in terms of mandatory votes.

Not only do you see this different provincial standard, but the standards seem to change quite rapidly from one government to another. And we have the example of B.C., with which each change of government, you'll find almost the implementation of a complete new labor code. More recently in Ontario, that has occurred over the last two changes of government, as well. And depending on what happens in this next Quebec election, there may be a completely new set of regulations, as well.

So, coming back to the American concerns that we hear about when they're establishing here -- and you talked about labor standards in terms of employment costs, termination costs were talked about earlier. Well, Nova Scotia, Quebec and the federal government, federal employees, have access to a mandatory arbitration where the other jurisdictions do not. With respect to such issues as a strike, considerable differences. And perhaps best illustrated by recent cases that I've been involved in, a lot of American companies are, of course, requiring their affiliates in Canada to have the same drug and alcohol testing policies. And here you'll get a completely different cultural approach.

In Canada, drug testing, notwithstanding attempts and disputes that we're having currently with the CAW over the issue, drug testing is simply -- it's almost considered to be a crime. And even in the transportation sector it is very limited.

So you'll have the cross border issues, as there is a deregulation which has occurred in Canada over the last 10 years in the transportation sector. You'll have these issues where the American companies will set up requirements that anyone driving a truck or a train in the U.S. must be subject to a mandatory random drug testing policy and you have Canadian drivers who go down there but, under the Canadian Human Rights Act, there are serious concerns and indeed disputes about the legality.

So, that's just one of the issues which I think, while Canadian companies are very much used to having to adapt within Canada to each jurisdiction, my sense is -- and I guess perhaps I could be corrected -- American companies are much less -- I'm sorry. I'm not familiar with too many Mexican companies coming into Canada. But from an American point of view, it's almost a shock as to the degree of differences, which of course, advantages the legal profession in each province. But shocked as to the degree of differences there are in terms of the number of different rules and regulations that will apply depending on where you are, but also in terms of the -- I think some fundamental differences in terms of human rights cases, as well.

Those are my comments.

Thank you.

MR. McKENNIREY: Thanks very much.

John, I'm going to resist the comment no the elephant.

And we'll go straight to our labor perspective from Canada from Bob Chernecki, who's Assistant to the President of the Canadian Auto Workers.

MR. CHERNECKI: Thanks, John.

It is a pleasure for us to be here this morning. My good friend to my left, the only thing I can say, who owns the only Chrysler in we think the world that has no left signal.

I do want to start by saying a little bit about who we are. The Canadian Auto Workers Union is composed today of 215,000 members in virtually every economy that one can identify.

For today's purposes, I think I want to try and stick to the auto industry as the best identified for people in this room and for the discussion, multinationals. And the subject of the day is how we deal with them.

Well, most days the code word is "very carefully." But in terms of the labor relations, we have -- and when you go back in our history, Steve touched on it in terms of us belonging some years ago to the international union.

The corporations today, Ford and Chrysler, as we all know, are multinational corporations and have been for a lot of years. Before the buzzword "mobilization" and all that was around in our dictionaries, the Big Three, as they're commonly called, were researching every market they could get their hands on.

We dealt with the -- first, we tried on an international scale working with, of course, the UAW at that time, trying to, at every set of bargaining, make progress on behalf of the workers. But they still, I think, played a role in our separation in terms of their approach to bargaining in both countries.

Chrysler, for example, which I know best -- I come out of it -- labor relations was always extremely difficult. The history of that is that you could count on every three years having a strike. For a lot of reasons, I think on both sides of the border, I guess right after the concessionary strikes in the early '80s, for some reason the labor relations changed.

Why did it change? Did it change because the unions changed? No. I think they recognized that in order for them to have the kind of quality and productivity that would lead them to other markets, I think they had to have a relationship with the workers. And you can have two relationships with workers. You can have it so that you try and control the agenda, of course, or you can try and have it where you have a relationship that's based upon mutual respect with the trade union and its top leadership. And I think Chrysler chose the right path. Ford is similar. GM -- we all know general motors.

Anyway, the issue for us as a union, and I know the subject matter is standard, but some people here in this room -- Canada at one point used to stand up as a model for standards of labor relations. And that, quite frankly, is going to hell in a handbasket. And it's largely driven -- and John touched on this. Largely driven by the force put on us by -- some people who are calling it the Americanization of Canada, the globalization of Canada, whereby our standards are being attacked on a daily basis, on a government by government basis.

Today the only provinces that has anti-scab are two; B.C. and Quebec. And John's right. At some point we're going to be under attack there. But the only provinces, two provinces left that have that capability. And the exponentiation of the federal labor code, a new one, which touches on anti-scab, doesn't get us there.

So my point in all this is that there's always a drive, and we're calling it a race to the bottom. And that means the standards that we have enjoyed as labor over many, many years are constantly under attack. And the recent changes in the Harris government has left Ontario with one of the worst labor relations records in the past 50 years of experience.

I can tell you today in our union, and everybody I think knows in Canada anyway, how we have demonstrated on the streets against what we see as the most anti-union government in the history of the country.

So with that kind of role in terms of how we deal with multinationals, certainly, yes. Recently, you may have heard -- I'm sure you've heard about the Mobil situation in which a plant of 36 years, good quality, good productivity, decent working conditions and pay -- and a corporation that has a good reputation worldwide for good labor relations. Well, the long and short of the story in Halifax, quite frankly, was that the local was not prepared to even give us a standard that workers would enjoy in Sweden had the same circumstances occurred.

So although there is this recognition that standards are important across the system, corporations are not, quite frankly, living up to the total standards even in their own countries.

So, I know I'm a little bit over here, and I'm going to stop. But I do want to end on a positive note.

Quebec, we think, probably has led the country in many of its labor laws and we really are certainly going to make sure in our country that Quebec stays in the federation. We are a union of choice for those people who choose to leave. And we'll have an international union again -- an international cooperation, I mean.

Thank you very much.

MR. McKENNIREY: Thanks very much, Bob.

I don't know what to say on that point. I'm somewhat speechless. But we'll hope they stay.

Let me turn to our participant from Mexico, Gilberto Gonzalez Treviño, who's the Director of Human Resources for a major steel company in Mexico, Siderurgica Lazaro Cardenas las Truchas.

Senior Treviño, por favor.

MR. GONZALEZ TREVIÑO: (translated from Spanish) Good morning. Thank you very much for inviting me. I have just three comments to share. The first concerns the relationship between the Mexican Government and the Confederation of Mexican Workers [CTM]. The second refers to how employee benefits relate to wages. And my third comment is about a success story for labor in Mexico ... to reduce ... [voice of English interpreter heard above the speaker] ... Las Truchas ... [voice of English interpreter heard above speaker] ... which have been in existence for 24 years. Though it's true that in the days when corporatism prevailed in Mexican politics, there was indeed a close relationship between the government and the CTM, it's also true that when our political system began to change, and move towards a completely open democracy, corporatism started fading from the picture, and with it, the effects of the CTM-government relationship. During the decades when corporatism prevailed in Mexican politics, we saw that the government, in order to preserve the political power and dominance of its party, the Institutional Revolutionary Party, used the Confederation's supposed powers of control to ensure that its candidates won at election time. We also saw that the CTM was granted favors in political and labor matters, and received too much protection for its actions, whether or not they adhered to Mexican law. With a more open democracy, which made it possible for new political parties to form and ensured that the electoral victories of non-PRI candidates would be recognized, coupled with the death of CTM's leader, Fidel Velásquez Sánchez, whom Yvonne mentioned, corporatism was supplanted in the Mexican political system, and the union's strength and control waned. Thus, the protection and concessions accorded to the CTM have tended to disappear. This has enabled workers to choose freely the union they join and means that they are treated differently, and has also made it possible to try to improve contract-based employee benefits, in keeping with the parameters of Mexico's current economic crisis.

My second point concerns the relationship between wages and employee benefits, which, as I mentioned, is very important. As we know, there are two types of employee benefits in Mexico. The first are legislatively-mandated benefits written into the labor code, and these must be included in individual labor contracts for rendering personal services. The second type is the contract-based benefit, found in collective labor contracts that govern the employee-employer relationship at specific companies. Contract-based benefits tend to exceed the minimum benefits specified in the labor code, and thus help employees. Wages, as a key element of the individual contract or the labor relationship, are classified much as other employee economic benefits, i.e., there is the so-called minimum wage set by the National Minimum Wage Commission, which is divided into the legal minimum and the professional minimum, applied in the various economic zones into which the relevant Mexican entities are divided. There is also the so-called "contract-based wage" which is governed by the wage index for collective labor contracts. It should be pointed out that the most common type of wage in Mexico is the daily wage, which covers personal services rendered by employees in a legal work day, and paid on a weekly basis for workers or biweekly for supervisory employees.

One important thing to keep in mind is that because of Mexico's economic crisis, caused by various international economic crises, the government has established unlimited controls on wage increases, both on law-based and contract-based minimums. At the start of each year, it sets an official guideline that is used mainly to review the indices for wages governed by collective labor contracts. The purpose of this measure is to prevent any increase in wages freely negotiated in collective labor contracts from triggering an inflationary spiral in wages and prices for basic consumer items, which would aggravate Mexico's economic crisis. Mexico is regarded around the world as a cheap labor country, in view of the level of wages its workers are paid. The situation we discussed earlier results, in our view, from the basic circumstances of its prevailing economic system, which currently prevents it from competing with the so-called First World countries, where economic stability and growth prevail. The United States and Canada, both First World capitalist countries, with robust economies and steady growth, stand in stark contrast to Mexico in terms of employee benefits. The evolving situation explains why Mexico is regarded around the world as a cheap labor country, particularly because of its low wage levels. Nevertheless, this reputation has drawn a large number of varied companies to Mexico, and has thus generated jobs and employment for those who live in the border regions. This, in turn, has provided an honest livelihood, and enough income to fulfill their families' basic needs, thus lowering the crime rate.

Finally, I would like to offer the following observation. In late 1991, the Lázaro Cárdenas Las Truchas steel company, a government-controlled enterprise, was privatized. We knew that that the human resources had to be preserved and protected. In order to make sure that this happened, we outlined a program to steadily enhance quality of life, designed to resolve all the internal problems we had with our workers. In order to accomplish this, the first challenge we set for ourselves was to maintain a productive plant, while at the same time enabling workers to keep their jobs. A modernization program, coupled with our collective labor contract with the national miners' union, enabled us to build several plants, such as, for example [unintelligible], an oxygen plant, a desulfuration unit, etc. With the full cooperation of the union that signed our collective labor contract, those workers left over from other plants (SICASA has 10) were relocated to the new plants. Worker response was enthusiastic, since they appreciated our organization's effort to maintain plant productivity, and, most importantly, because they were able to keep their jobs. Their wages were reviewed, and they were given a better benefits package, based on work done by the technical engineering unit. What I really want you to know about the privatization of Siderúrgica Lázaro Cárdenas Las Truchas is that it has truly been a success. Thank you very much.

MR. McKENNIREY: Gracias, Senior Gonzalez Treviño.

Now we're at the point of opening our panel for comments and observations from the floor and we have about 35 minutes before lunch, so we have some time. And we'll have some more time this afternoon.

The floor is open.

Could you identify yourself, please?

MR. MORRISON: You had mentioned for the most part there are a few trade unions that were independent but for the most part they were official, whatever that means. I'm not quite sure. And as a trade unionist I have a very strong belief that in order to have the ability to represent workers and to make sure that they have decent conditions for themselves and their families, you have to have strong independent trade unions.

Having said that, within Canada there are no barriers whatsoever. The professor and you all can correct me on this if I'm wrong, but absolutely not in terms of the ability to create a trade union.

Now, I don't know what kind of barriers are present in Mexico or in the United States that prevent that from happening. As it sits right now in Canada, we have at least 25 and probably lower than that number, unions that are internationally based.

I'm with the Electrical Workers Union and I know we've got many members in Canada that are members of American affiliates.

And the question I have is are there laws that prevent or try to bar now the ability of another union to open up an office in Mexico or to charter a local union so they can start representing workers in that country? And I would address that to both the U.S. group as well as the Mexican group.

There are laws in the U.S. now that would prevent something like the CAW from opening up an office in the United States to start organizing workers? Is there a law in Mexico that prevents the IBEW or the Teamsters from opening up an office down there to start organizing workers?

MR. ESTREICHER: I'll take the U.S. I don't think there are any restrictions in the United States. The more competition, the better.

MS. STINSON: About Mexico -- (translated from Spanish) There are no restrictions on independent unions in Mexico. What I was trying to say earlier is that the CTM dates back to the early 20th Century, after the Mexican Revolution, naturally for the purpose of defending workers' rights. Nevertheless, as time went by, and Mexico began to organize, the official party we now know as the PRI, which is still in power, began to grow. The PRI tried to protect the CTM by giving it political leeway. In some ways, I would say it was extremely pro-government, but it did represent the workers. I will say that the CTM wasn't ordered to act that way for 60 years -- it just evolved that way as part of our culture. But then, with the new economic model we started trying out in the early 1980s, and the way the CTM was organized, it failed to modernize as much as industry and the companies needed in order to compete. This made it more necessary to have independent unions, which had always existed in Mexico, not as strong as now, but they had always existed. And I think that in recent years there has been more of this than ever before. So there are no barriers -- there can be unions associated with the government or any party. In this case, the CTM teamed up directly with the governing party, the PRI, because it had political leeway. But any independent union, any union at all, can exist in Mexico. There are no legal barriers.

MR. McKENNIREY: If I understood the question, Yvonne, it was also whether or not there was any restriction on the organization of a union in Mexico that might be affiliated with a union in another country.

MS. STINSON: (translated from Spanish) No, I don't think there's any problem.

MR. McKENNIREY: Steve Beckman?

MR. BECKMAN: I don't claim to be an expert on Mexican labor law in all its great details but I have had about 10 years of experience dealing with independent unions in Mexico and the difficulties that they have had in becoming registered.

Many of the petitions that have been filed to the USNAO regarding violations of the NAALC have revolved around freedom of association and the ability of independent unions to organize and gain registration in Mexico.

So if you ask the question are there legal barriers, the answer is no. Are there functional barriers to the independent unions registering to unions from other countries registering, the answer is decidedly yes. And there is very much experience to demonstrate this.

MR. ESTREICHER: What are those barriers?

MR. BECKMAN: In order to become a registered union, you have to be certified by the Conciliation and Arbitration Board, generally locally, but there is also a national system, as well. And the representatives on that board are tripartite; labor, management and government.

Well, guess where the government represent comes from. Comes from a PRI functionary of some sort. The management representative is interested in having the most meek and ineffective union possible. And the labor representative, because of the relationship between the PRI and the CTM, almost exclusively on the CTM.

Now, if there is a group of workers who is trying to change its affiliation from the CTM to a new independent union, let's think about the votes on that conciliation and arbitration board and how they're going to treat such a request. The CTM delegate is unlikely to be terribly sympathetic. The employer representative is unlikely to be terribly sympathetic. And the government representative is unlikely to be terribly sympathetic.

So an independent union doesn't have exactly what we would call and what they would call a fair hearing under a system that is objectively tripartite, fair and open and which has specific rules which apply.

Now, again, the way in which the independent unions are denied registration can be very instructive from case to case. You need to sign this in triplicate or duplicate; this number of signatures from the workers; identify your name and your jurisdiction accurately. There's an unlimited number of procedural barriers that can be placed in the way of independent union organization, and they are utilized.

I would say though, just one other point. The two cases I mentioned of situations where the workers were fired and rehired, one was a CTM union situation and one was an independent union situation. The economic realities apply to all the workers in Mexico, and in fact, all the workers in the United States and Canada. We're laboring under the same pressures.

Independent unions in Mexico are not exempt from that. They are not able in all instances to more effectively represent the economic interests of their members because they're independent. There are real serious economic pressures that prevent them from winning wage increases comparable to the productivity gains that have been accomplished in the same way that the CTM union, or the official party affiliated unions have not fought, we would say, as effectively as they might to obtain those kinds of improvements for wages in Mexico. And in fact, their wages have declined substantially.

But obviously it's a day-long discussion.

Irasema is smiling. She's been through many days' discussion about these issues. It is very complicated and not transparent.

MR. CHERNECKI: We're going to have to have a debate in the labor movement of how many unions we have in countries to date. I want to throw it out. It's an important piece we have today in the railway industry. Too many unions. And how corporations deal with that is pretty difficult and how we deal with it as deal with it as a union.

MR. COLEMAN: Well, John, I'll tell you. I won't say that the CAW is very difficult.

MR. CHERNECKI: That's how we won the vote. I just want to make that point. There's barriers, without question, in every country. I think the labor movement has to stop and look at itself inside, too, and say is there too many unions in the country.

MR. COLEMAN: If I could just add one point from what I just heard in terms of restrictions on unions.

There is something in Canada. I don't know if it exists in the States. But certainly on an organization campaign there are no restrictions with respect to Canadian unions. However, if a group of employees which to change trade unions there are also functional barriers in terms of non-raiding pacts between unions that are members of -- and I believe most are -- of the Canadian Labor Conference. So it's not quite as clean as Mike suggested.

MR. ESTREICHER: I just want to clarify. The same thing is true in the United States. We don't have a certification requirement. Anyone can become a labor organization as long as you're not employer supported or dominated. And so we have no notion of established labor unions but there are rules on decertification and that sort of thing.

Plus, the AFL-CIO in its Article 20 has a no-raiding pact. I actually commend them. More competition is a good thing. Maybe it's gone too far in railroads but there is a problem with kind of a one union federation.

Everyone needs competition to keep them honest and keep them vigilant, but the AFL-CIO isn't in the business of preventing that competition within the labor federation.

MR. GILES: Can I just very, very quickly --

MR. McKENNIREY: You'd better be careful of your questions. A warning to the audience.

MR. GILES: It is quite true that in Canada and the United States as well there are restrictions on certifications. There are time frames that you can do it within. But by and large employers have been very, very vocal in support of that. Because what that does is that creates stability. And that's been the driving force behind those provisions. It's not been even a disguised attempt to protect particular kinds of unions.

MR. McKENNIREY: A second question?

Could you give us your name and your organization, please?

MR. RUGGIERI: Yes. Peter Ruggieri. I'm with the Maryknoll Fathers. We're a Catholic religious organization and we work in Mexico and Yucatan.

I just want to know why isn't there a representative of Mexican labor here.

MR. ARANDA VOLLMER: I'll answer.

MR. McKENNIREY: Oh, there is an answer?

MR. ARANDA VOLLMER: (translated from Spanish) The Mexican labor representative was unable to attend. First, there were problems getting the United States to issue a visa, and then there were personal problems. When something like that happens, it's hard to find a suitable replacement. I want to answer your question. I want to take this opportunity, it makes ... [inaudible] ... Sometimes you hear people say things, there are translations about Mexico, very general knowledge, very limited, and one of them, one that really stunned me, was a reference to the relationship between the PRI, the PRI's representatives, and the representatives of the boards and ... [inaudible] ... public ... that we have, the 9702 for companies, in [Baja] California Norte, a government ... [inaudible] ... a CTM representative and we are making ... [inaudible] ... there is no reason to support a union associated with the PRI, and I'd say you should be much more careful about making generalizations like that. There's a lot more behind it, ... [inaudible] ... rural ... at the labor level ....

MR. McKENNIREY: For the record, that was Rafael Aranda from the Mexican NAO.

MR. BECKMAN: John, just 15 seconds?

MR. McKENNIREY: Fifteen seconds on this question.

MR. BECKMAN: I'm sorry. I would just point out that the PAN is a party that is associated more closely with the business community in Mexico. It's not exactly a labor party. So I'd just point that out.

MR. NERON: (translated from French) I am Jean-Pierre Neron, President of the Quebec Confederation of Labor. The other day I bought a can of tuna. On the can there was a little picture with a sign that said, "Save the dolphins." I liked the idea, looked into it, and learned that there was a campaign to protect dolphins. In fact, dolphins can die if they are caught in fishing nets. So, hurray for the dolphins.

Now, I represent a federation of men and women workers, and we want to be protected, too. So now we ask, how can a worker, up against multinational corporations, be protected. I agree with Ms. Stinson, who says that standardization is not what we want. One of the methods that we do have, that we are trying to promote, is codes of conduct. We want to get the companies to adopt codes of conduct, like the company that had a code of conduct to protect dolphins. We simply want them to adopt a code of conduct to protect workers, i.e., to see that fundamental rights are respected in each country. This is precisely the goal of the NAALC, but in [off mike].

The other day I was reading a little news item where the writer had pointed out that it is a bit odd that when you buy a product, you can know what percentage of fat, sugar, water, etc. it contains. I do not know under what conditions that same product was produced. There ought to be a label that would say " Yes, this shirt was made by a worker who gets a decent salary, who has decent health and safety conditions, who is not sexually harassed, who has a pension fund, etc. That's what we want. Or else I could say, or you could [inaudible] what could be said about this code of conduct. But in the end that's what we want how can we get these codes of conduct?

I know, of course, that some of our union brothers see that as being a little like protectionism, but up against the multinationals, if we want to move ahead along those lines, that will be the price. Thank you.

MR. McKENNIREY: Any panel reaction to the question? Codes of conduct and statements attacking information about work conditions.

MR. BECKMAN: I think there are a couple of points.

One, the principles of the NAALC, as they're written in the document, would lead you to believe that the three governments hold that as an objective. That you would want people to know about the improvements or the benefits of respect for workers' interests that they profess. And, of course, each of the three governments does profess to uphold high standards for the treatment of workers and whatever.

And the reality is quite different. The NAALC's nice words about this have not contributed to a standardization or a recognition among the three governments that they will play some role in ensuring that conditions for workers do meet the nice words that are included in the document and that the governments are more than happy to expound on when given the opportunity, domestically and internationally.

The issue of codes is that they are voluntary in general. There have been some that have been negotiated directly with companies by unions. And those in which a union is in a position to enforce that code obviously are more effective and have a greater effect than those that are entirely voluntary and rely on the companies' own process of review.

There are a number of organizations around the world that are presenting themselves as available to review company policies and make pronouncements on whether they are following their commitments or not. Unions have mixed experiences with such organizations, particularly when they don't include union or worker representatives but are non-governmental, non-affiliated organizations.

There are a variety of ways in which companies can manipulate such reviews. One of which is by allowing inspections of their plants but having the company notified in advance that an inspection is going to take place. That is not an adequate oversight of a code of conduct.

So I think these have to be negotiated. And where it's possible to negotiate them, it means that the workers have some kind of serious leverage. Well, if the workers have some kind of serious leverage they can usually adopt the kind of conditions that you're describing through collective bargaining or through some other process, not through a code. And so the code is a less effective means of achieving this objective than doing it through collective bargaining, which means that the union isn't necessarily in the same kind of position to impose the oversight necessary in order to make sure that it's working well.

But obviously workers share the interest in having consumers understand the conditions under which products are made. That's why we are pushing for and have been pushing for standards in international trade agreements that make demands on employers and on governments to improve conditions for workers. And we will continue to do that