Hariati Sinaga

Trade Liberalisation and Labour Standards in Labour- and Capital-intensive Sectors - A Case Study of the Oil Palm and Automobile Sectors in Indonesia

Debates on the linkage between trade liberalisation and labour standards have been continuously made. Critics of trade liberalisation point to the abuse of labour rights, demonstrating the “race to the bottom” as a result of the competitive pressures. In developing countries particularly, the relationship between export-oriented strategy and trade liberalisation, partly indicated by the establishment of Export Processing Zones (EPZs), has often been associated with the abuse of workers’ rights (see studies on EPZs). Nonetheless, most of the existing studies on the debates about race to the bottom are at national level. There is still a lack of studies that compare two different sectors in the face of trade liberalisation.
In particular, Indonesia serves as one of developing countries that attempt to reap the benefit from trade liberalisation. There is a plethora of studies on Indonesia with regard to trade liberalisation. Some of them also relate trade liberalisation to labour issues in Indonesia. However, there is a deficit comparative study on the connection between trade liberalisation and labour rights at sectoral level.
This research is intended to fill these gaps, in which it will compare the response of two types of sectors to the competitive pressures resulting from trade liberalisation and the implications on labour standards in the two sectors. The main question that leads this research is, “How do labour- and capital-intensive sectors respond to the competitive pressures resulting from trade liberalisation and what does it mean for labour standards in the two sectors?” Empirical findings are drawn from the case study of the oil palm and automobile sectors in Indonesia. Noting that trade interaction has increasingly shifted towards intra-industry trade, the research will incorporate global value chain (GVC) and global production network (GPN) approaches. Comparing the oil palm and automobile sectors coincides with feminist studies on women workers as in Indonesia the number of women working in the oil palm sector in has been continuously growing, while the automobile sector has been traditionally male-dominated sector. As such, this research will also employ feminist perspective.