436
Kimberly Ann Elliott
U.S. negotiators are constrained in how they treat labor issues in PTAs by the need to obtain congressional approval. The role of dispute settlement procedures and, especially, trade sanctions in enforcing labor provisions has been a key source of disagreement between the United States and its trading partners, but the partner countries have little influence over labor language because the approach is settled in negotiations among various U.S.based constituencies, the two major political parties, and the executive and legislative branches. Although these internal political battles have brought about changes in the language of the labor provisions, depending on the distribution of political power among the various interests, enforcement of the labor provisions in U.S. PTAs has varied surprisingly little. Between 1994 and 2008, two U.S. presidents, each from a different political party, presided over the implementation of PTAs. Both were restrained in their approaches to enforcement, with neither coming close to invoking sanctions of any sort. The big unknown today is how aggressive President Obama will be on this issue, given the statements in his official trade agenda on the crucial role that worker rights should play in trade policy (USTR 2009), and the decision on July 30, 2010, to formally request consultations with Guatemala over alleged violations of the CAFTA–DR labor chapter.15 On the other side, technical and financial assistance to partner governments to strengthen their capacity to implement and enforce labor standards has also been neglected. Other than the agreement between the United States and CAFTA–DR, there has been no dedicated program of capacity-building assistance related to the signing and implementation of PTAs. The U.S. Agency for International Development (USAID) is providing technical and financial assistance to address labor rights violations in special export zones in Jordan that export clothing to the
United States. That program, however, was developed in response to a report on exploitative conditions involving migrant workers, not as part of a strategy for implementing the PTA or as a result of systematic monitoring. A key problem is that the congressional committees that oversee trade agreements are not the same as those that appropriate funds for capacity building, and close collaboration is often lacking. Although the details differ, the dispute settlement process for labor violations under U.S. PTAs is generally as follows. The agreements do not provide for a private right of action, but they do require parties to designate a national contact point to accept submissions from citizens or groups requesting consultations over potential problems under the agreement. It is then up to the receiving government to decide whether to request consultations with the other government. If consultations do not resolve the problem, the government alleging a violation can request appointment of a dispute settlement panel to investigate. If the panel agrees that a violation exists, the responding country will have a certain amount of time to bring its practices into compliance and if it does not, penalties—either fines or trade sanctions, depending on when the agreement was negotiated—may be authorized (see table 20.1). Thus far, only three of the nine U.S. PTAs in force have seen any enforcement activity, and most of that has been under NAFTA. There have been only two other requests for consultations regarding labor rights violations, involving Jordan in 2006 and Guatemala in 2008. In the Guatemala case, first filed in 2008, the U.S. Department of Labor (U.S. DOL 2009) investigated the issues raised in the submission from the AFL-CIO trade union, affirmed that problems existed, and recommended actions the government of Guatemala could take to address them. In early 2009, the Department of Labor opted not to recommend formal consultations under the
Table 20.1. Sanctions Authorized for Labor Violations in U.S. Preferential Trade Agreements Agreement partners, and year approved
Enforcement mechanisms permitted
Canada, Mexico, 1993
In Canada, fines only; for Mexico and the United States, monetary assessments that may be collected by suspending tariff concessions if not paid
Jordan, 2002
“Any appropriate and commensurate measure”—the same as in other parts of the agreement Monetary assessments, capped at US$15 million (adjusted for inflation)
Chile, 2003; Singapore, 2003; Australia, 2004; Morocco, 2004; Bahrain, 2005; Oman, 2005; CAFTA–DR, 2005; Korea, Rep., pending Peru, 2007; Panama, pending; Colombia, pending Source: Office of the U.S. Trade Representative, http://www.ustr.gov. Note: CAFTA–DR, Dominican Republic–Central America Free Trade Agreement.
Compensation, fines, or trade sanctions—the same as for other parts of the agreement