U.S. Requests DR-CAFTA Arbitral Panel in Guatemala Labor Dispute
On August 9, 2011, U.S. Trade Representative Kirk announced that the U.S. is taking the next step in a dispute regarding the Government of Guatemala’s "apparent failure" to effectively enforce its labor laws by requesting the establishment of an arbitral panel under the Dominican Republic-Central America-U.S. Free Trade Agreement (DR-CAFTA). This is the first labor case that the U.S. has ever brought under a trade agreement.
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(In April 2008, the AFL-CIO1 and six Guatemalan worker organizations filed a public submission under the CAFTA-DR alleging that the Guatemalan government had violated its DR-CAFTA labor commitments by failing to effectively enforce its labor laws. The labor laws that the Guatemalan government has apparently failed to enforce include those related to the right of association, the right of workers to organize and bargain collectively, and acceptable conditions of work. The Labor Department reviewed the submission and issued a report finding significant weaknesses in Guatemala's enforcement of its labor laws. The U.S. conducted an extensive examination into these issues and concluded that Guatemala appeared to be failing to enforce labor laws. In an attempt to resolve its concerns, the U.S. requested formal consultations in July 2010. Consultations were held in September and December 2010.)
The U.S. requested a meeting of the FTC in May 2011. The FTC met in June and work ensued to reach agreement on an adequate enforcement plan. USTR notes that those efforts have not succeeded, and therefore, the U.S. is now moving to the next step of formation of an arbitral panel. USTR Kirk has stated that while Guatemala has taken some positive steps, its overall actions and proposals to date have been insufficient to address apparent systemic failures. He stated that with this case, the U.S. is sending a strong message that the Administration will act firmly to ensure effective enforcement of labor laws by its trading partners.
1The American Federation of Labor and Congress of Industrial Organizations
House Ways and Means Ranking Member Levin (D) and Trade Subcommittee Ranking Member McDermott (D) have issued a statement welcoming the Administration's decision to bring this matter to dispute settlement.
(See ITT's Online Archives or 05/18/11 news, 11051818, for BP summary of the USTR requesting a meeting of the DR-CAFTA FTC regarding Guatemala's "apparent failure" to effectively enforce its labor laws.
See ITT's Online Archives or 05/31/11 news, 11053169, for BP summary of a Guatemalan Apparel and Textile Association stating that the Guatemalan government wants to resolve the labor dispute and avoid arbitration.
See ITT's Online Archives or 08/02/10 news, 10080209, for BP summary of USTR announcing that the U.S. was initiating consultations with Guatemala under the DR-CAFTA.)