4. U.S. Trade Policy

Figure 24: ILAB’s Organisational Chart

Source: Organization Chart, (Bureau of International Labor Affairs, n.d.-a), URL

4. U.S. Trade Policy

U.S. FTAs The limitations of EU FTAs described – notably relating to the mere existence of flexible mechanisms, the other to their activation – call for a comparison with the U.S. FTAs, whose approach to compliance with human rights standards is substantially different. Most of the U.S. agreements have indeed required the compliance with the internationally recognised worker rights (Ebert, 2013, p. 31). By contrast to EU agreements, their enforcement relies on dispute settlement procedures such as formal consultations or the establishment of panels endowed with the ability to impose sanctions when the treaty requirements are not met (Lowe, 2019, p. 2). These sanctions function as “sticks” for partner countries, as the threat of their enforcement encourages these countries to respect their commitments under the trade agreements.

Furthermore, the U.S. system also allows the aggrieved party to withdraw its trade concessions if it demonstrates that the other party's non-compliance with its commitments has had a substantial impact on trade flows. Both are made effective by the importance attached to complaint mechanisms, which ensure substantial third-party participation and give the U.S. Department of Labor the role of reviewing submissions (Barbu et al., 2017, p. 5; European Commission Services, 2017, p. 7; Lowe, 2019, p. 2).

Recent U.S. FTAs commit countries to maintain laws on core ILO labour standards (ILO, 2009). For example, in its 2000 free trade agreement with Jordan, the trade partners agreed to protect core ILO workers’ rights. Disputes over labour standards, e.g. if one country weakened its labour laws or failed to bring its laws or enforcement into compliance with the ILO core standards, could end with the other party unilaterally withdrawing trade benefits.

For the first time in a U.S. FTA, the United States-Mexico-Canada Agreement (USMCA) also commits the parties to prohibit imports produced by forced labour and to cooperate in identifying such goods. USMCA-implementing legislation created a Forced Labor Enforcement Task Force, chaired by the Secretary of Homeland Security, to monitor and report on broader enforcement of Section 307 (USMCA Implementation Act, 2020). Incidentally, the Canadian system allows for the imposition of fines proportionate to the adverse impacts on trade.

In addition, eligibility criteria for U.S. trade preference programs includes taking steps to maintain internationally recognised worker rights. Some eligibility reviews and revocation of developing country benefits by the U.S. Trade Representative have involved concerns over labour practices. Trade agreements have expanded coverage of trade and labour issues in part because the World Trade Organization (WTO) does not cover such rules (though it provides exceptions to a country’s obligations for measures related to imports of products of prison labour) (CRS, 2021a).

The aegis of monitoring and enforcing foreign government compliance with trade agreements is principally held by the United States Trade Representative (USTR), which “pursues enforcement using bilateral engagement, dispute settlement procedures, and the full range of U.S. trade laws when appropriate.” USTR is supported by “relevant agencies, including the U.S. Departments of Agriculture, Commerce, Justice, Labor, and State,” which “help ensure that these agreements yield the maximum benefits by ensuring negotiated market access, promoting adherence to international commitments, and advancing a free, fair, and market-oriented trading environment” (USTR, n.d.-a).

Relevant legislation The U.S. Trade Act of 1974 notably defines “internationally recognized worker rights” as constituting “acceptable conditions of work with respect to minimum wages, hours of work, and occupational safety and health” (Trade Act, 1974). The law furthermore provides instruments to protect U.S. traders and workers against unfair trade practices. “Section 201 provides for safeguard actions in order to facilitate positive adjustment of U.S. domestic industry to import competition. Section 301 may be used to enforce U.S. rights under

bilateral and multilateral trade agreements, and to respond to unreasonable, unjustifiable, or discriminatory foreign government practices that burden or restrict U.S. commerce” (USTR, n.d.).

The U.S. Trade Act of 2002 (H.R.3009) directs U.S. trade negotiators to:

● “promote respect for worker rights and the rights of children consistent with core labor standards of the ILO”; ● “seek provisions in trade agreements under which parties to those agreements strive to ensure that they do not weaken or reduce the protections afforded in domestic environmental and labor laws as an encouragement for trade”; ● “promote universal ratification and full compliance with ILO Convention No. 182

Concerning the Prohibition and Immediate Action for the Elimination of the Worst

Forms of Labor.”

The U.S. Bipartisan Trade Promotion Authority Act of 2002 (Pub. Law 107-210) provides, inter alia, for the President to “submit several reports to Congress related to any free trade agreements entered into under the act,” including a report entitled “Laws Governing Exploitative Child Labor” (USTR, n.d.-b). Eleven such reports have been published.

The U.S. Trade Promotion Authority Act of 2015, in effect through July 1, 2021, notably included “the same dispute settlement mechanisms and penalties for labor as for other FTA chapters;” required “the maintenance in laws and practice of principles stated in the ILO Declaration;” prohibited “the diminution of labor standards to attract trade and investment;” and limited “prosecutorial and enforcement discretion, as grounds for defending a failure to enforce labor laws” (CRS, 2020). In section (10) LABOR AND THE ENVIRONMENT, the Act affirms that the “principal negotiating objectives of the United States with respect to labor and the environment are,” inter alia, “(C) to strengthen the capacity of United States trading partners to promote respect for core labor standards (as defined in section 111(7)). These core labour standards also concern “(C) the elimination of all forms of forced or compulsory labor; (D) the effective abolition of child labor and a prohibition on the worst forms of child labor” (Defending Public Safety Employees Act, 2015).

As presented in a Congressional Research Service (CRS) publication, the treatment of labour rights in U.S. trade policy and FTAs has been of long-standing congressional interest, and has become stricter in recent years (see Figure 25).