Last week I noted that El Salvador had ratified various conventions of the International Labor Organization because it would lose duty-free access to European Union markets if it did not. An article today from the Inter Press News Agency describes the pressure brought by Spanish tuna company Grupo Calvo in bringing about this result:
Since July 2005, this Central American country has benefited from the Generalised System of Preferences Plus (GSP+) scheme, which that allows Salvadoran products to enter the EU duty free.
Faced with the prospect of paying tariffs of 20.5 percent if the Salvadoran government failed to ratify the conventions, Spanish tuna canning giant Grupo Calvo spearheaded a campaign to force the government to comply with the EU conditions.
Last July, the Calvo company threatened to close its local plant if El Salvador did not ratify the conventions, stating that its competitiveness would drop significantly without the tariff preferences, and laid off 600 workers in preparation for a pull-out from the country.
Grupo Calvo, which has operated in El Salvador since September 2003, has exported 20,500 tonnes of tuna so far this year and has invested 118 million dollars in this country -- more than any other European investor over the past five years.
Ramon Calvo, CEO of Grupo Calvo, spared no effort in lobbying the Salvadoran government. In late June he travelled to San Salvador from Spain, spoke with cabinet members and held meetings with the congressional Policy Commission.
Calvo, who is well aware how important his companyÂs investment is to the Salvadoran economy, had no doubt that the government would act on his demands. He told the local press: "They can't afford to let us leave," and "The country has already made it through the hard part, what's stopping them from completing the easy part?" referring to the ILO conventions.
Congress approved amendments to the Civil Service law that give workers associated with the police, the legal system, the armed forces and other "sensitive areas" the right to collective bargaining and freedom to organise (conventions 87 and 98), but also introduced regulations circumscribing trade union activity. (more)