President Reagan yesterday ended Chile's right to ship duty-free imports to the United States, declaring that country is not following internationally recognized policies on worker rights.
The violations cited by the Reagan administration involve the refusal by Gen. Augusto Pinochet's government to lift restrictions on workers' rights to organize and bargain collectively.
It appeared to be another move by the Reagan administration to signal its displeasure with what it sees as continued human rights violations by the Pinochet government. Earlier this month, the United States abstained in a vote by the World Bank to grant Chile a $250 million loan.
Removing Chile from the list of Third World nations allowed to import certain products duty free under the U.S. Generalized System of Preferences (GSP) law is seen as a largely symbolic gesture against the Pinochet government. Duty-free imports from Chile into the United States last year amounted to $60 million, or 7 percent of that country's $818 million in shipments to this country. GSP privileges allowed Chile to avoid $5 million in U.S. duties.
Administration officials cited arrests by the Pinochet government in October of a number of leaders of an opposition labor group, the National Workers Command, an umbrella group of 22 unions that is considered illegal by the military regime. National Workers Command leaders were arrested during a general strike demanding a 22 percent across-the-board wage hike and the restoration of labor rights that have been restricted since the military seized power in Chile in a 1973 coup.
Administration officials called the arrests a sign of retrogression, not progress, on restoring worker rights.
"The president made his decision after more than a two-year-long review of Chile's practices on worker rights," said Deputy U.S. Trade Representative Alan F. Holmer, who announced Reagan's decision.
In January, Reagan said he would continue GSP privileges for Chile for one more year while the U.S. government monitored its worker rights record. "At the end of the monitoring period," said Holmer, the president decided, "Chile had not met the requirements of our law."
Under U.S. law, countries must show an improvement in bringing worker rights to internationally accepted standards. These include recognizing the right of workers to associate, to organize and to bargain collectively; having child labor laws, including a minimum age for child labor, and establishing minimum wage and hours laws and standards on occupational health and safety.
Chile maintains stiff antistrike laws that can mean dismissal for illegal strikes. Workers are allowed to join some unions and to strike on economic issues, but political strikes are banned and labor organizers often face trouble with the government for engaging in political activities against the government. Unions are further weakened by having to strike against individual companies instead of being able to mount industry-wide walkouts.
Removing Chile from GSP also takes away the protection that the Overseas Private Investment Corp. offers U.S. companies doing business in that country. The protections include insurance against expropriation of property by the government and guaranteed loans.