Thursday, August 19, 2010
[IWS] USTR: LABOR RIGHTS ENFORCEMENT CASE AGAINST GUATEMALA [30 July 2010]
IWS Documented News Service
Institute for Workplace Studies----------------- Professor Samuel B. Bacharach
School of Industrial & Labor Relations-------- Director, Institute for Workplace Studies
16 East 34th Street, 4th floor---------------------- Stuart Basefsky
New York, NY 10016 -------------------------------Director, IWS News Bureau
Labor Consultations with Guatemala [30 July 2010]
U.S. Secretary of Labor Hilda L. Solis today announced that the U.S. government has requested labor consultations with the Government of Guatemala under the Dominican Republic-Central America-United States Free Trade Agreement (CAFTA-DR). This is the first time that the United States has requested consultations under the labor chapter of a U.S. free trade agreement.
UNITED STATES TRADE REPRESENTATIVE
www.ustr.gov Washington, D.C. 20508 202‐395‐3230
For Immediate Release: Contact: Carol Guthrie
July 30, 2010 firstname.lastname@example.org
United States Trade Representative Kirk Announces Labor Rights
Trade Enforcement Case Against Guatemala
Washington, Pennsylvania – In a major speech this morning about the Obama Administration's
trade enforcement efforts, United States Trade Representative Ron Kirk announced that that
the United States will file a case against Guatemala under the Dominican Republic‐Central
America‐United States Free Trade Agreement (CAFTA‐DR), for apparent violations of obligations
on labor rights. This is the first labor case the United States has ever brought against a trade
"We want to see the Government of Guatemala take specific and effective action – including,
if appropriate, legislative reforms – to improve the systemic failures in enforcement of
Guatemalan labor law," Ambassador Kirk said. "In addition, the issue of labor‐related violence
is a matter of serious concern to the United States. Our request for consultations also
expresses our grave concerns about this problem and indicates that we intend to take this
issue up with the Government of Guatemala in the near future."
Following is general background information about the case:
What CAFTA‐DR Obligations Are at Issue?
Under Article 16.2.1(a) of The Dominican Republic‐Central America‐United States Free Trade
Agreement (CAFTA‐DR), each Party to the agreement has committed that it will not fail to
effectively enforce its labor laws, through a sustained or recurring course of action or inaction,
in a manner affecting trade between the Parties.
What Concerns Does the United States Have With Guatemala's Compliance With its
Obligations under Chapter 16 (Labor) of the CAFTA‐DR?
In April 2008 the AFL‐CIO and six Guatemalan unions filed a public submission under the CAFTADR
alleging that the Guatemalan government is failing to effectively enforce its labor law. Since
then the U.S. Government has conducted an extensive examination of Guatemala's compliance
with its obligations under the Labor Chapter of the CAFTA‐DR. This examination has included
(1) a careful review of Guatemala's labor laws, (2) extensive collection of factual evidence, and
(3) a careful analysis of Guatemala's obligations under Article 16.2.1(a). Based on this
examination, it appears that the Government of Guatemala is failing to meet its obligations
under Article 16.2.1(a), with respect to effective enforcement of Guatemalan labor laws related
to the right of association, the right to organize and bargain collectively, and acceptable
conditions of work. For example, we have identified a significant number of failures to enforce
Guatemalan labor law, constituting a sustained or recurring course of action or inaction,
1) Ministry of Labor failures to investigate alleged labor law violations;
2) Ministry of Labor failures to take enforcement action once the Ministry has identified a
labor law violation; and
3) Court failures to enforce Labor Court orders in cases involving labor law violations.
The United States also has grave concerns about the problem of labor‐related violence in
Guatemala, which is serious and apparently deteriorating. The United States is seriously
concerned about the Government of Guatemala's response to the use and threats of violence
that appear to be related to the exercise or attempted exercise of labor rights in Guatemala,
including the right of association and the right to organize and bargain collectively. The
concerns of the United States include apparent failures by the Government of Guatemala to
adequately protect those threatened with violence and apparent failures to adequately
investigate and prosecute such crimes. Our request for consultations expresses our grave
concerns about this problem and indicates that we intend to examine and take this issue up
with the Government of Guatemala in the near future.
How do Guatemala's Apparent Failures to Enforce its Labor Laws Disadvantage U.S. Businesses
The Government of Guatemala's apparent failure to effectively enforce its labor laws harms U.S.
workers by forcing them to compete against substandard labor practices and tilts the playing field
away from American workers and businesses. By holding the Government of Guatemala
accountable to its labor commitments under the CAFTA‐DR we can help to ensure that U.S.
businesses and workers are able to compete on fair terms.
Why Request Chapter 16 Consultations at This Time?
The U.S. Government has been engaged in informal government‐to‐government discussions
with the Government of Guatemala since the U.S. Department of Labor issued a report in
January 2009, where it found systemic weaknesses in the Government of Guatemala's
enforcement of its labor laws and raised concerns about labor‐related violence. The report
stemmed from an April 2008 submission filed with the U.S. Department of Labor under Chapter
16 of the CAFTA‐DR by U.S. and Guatemalan labor unions. To date, the Government of
Guatemala has not undertaken effective steps to correct systemic failures in the enforcement
of its labor laws. By invoking consultations under Chapter 16 and formally putting the
enforcement issues on track for possible dispute settlement proceedings, we hope to see the
problem effectively resolved.
What Happens Next?
The United States and Guatemala will engage in formal consultations. The CAFTA‐DR provides
that if the matter involves the effective enforcement of domestic labor law and the consulting
Parties have failed to resolve the matter within 60 days after the delivery of the consultation
request, the complaining Party may request a meeting of the agreement's Free Trade
Commission. The U.S. Government will assess what it learns in consultations, whether the
problem is being effectively resolved, and will determine whether it will seek to resolve
outstanding issues through a Chapter 20 dispute settlement process. Only matters arising
under Article 16.2.1(a), which relate to the effective enforcement of labor laws, may proceed to
Chapter 20 dispute settlement.
What is the Scope of Consultations under the Labor Chapter of the CAFTA‐DR?
Article 16.6.1 of the CAFTA‐DR expressly contemplates and permits a Party to raise in consultations
any "matter arising under the agreement," which may include both justiciable and nonjusticiable
matters. Justiciable claims are those that could proceed to formal dispute settlement under
Chapter 20 of the CAFTA‐DR (i.e., issues related to the failure to effectively enforce labor laws).
In April 2008, the AFL‐CIO and six Guatemalan unions filed the first public submission under the
CAFTA‐DR labor procedures, alleging that the Guatemalan government is failing to effectively
enforce its labor laws with regard to freedom of association, the right to bargain collectively,
and acceptable conditions of work in five separate cases. The Department of Labor (DOL)
conducted a review of the submission and issued a public report on January 16, 2009. DOL
found significant weaknesses in Guatemala's enforcement of its labor laws and made specific
recommendations on steps that Guatemala should take to address these matters. USTR, DOL,
and the Department of State engaged extensively with the Guatemalan government during the
past year and a half in an effort to resolve the individual cases in the unions' submission and,
more broadly, to address systemic concerns with the enforcement of labor law in Guatemala.
Our engagement has yielded limited results.
Under the CAFTA‐DR, a Party may request consultations with another Party regarding any
matter arising under the labor chapter. If the matter involves the effective enforcement of
domestic labor law and the consultations do not resolve the matter within 60 days, the
complaining Party may then request a meeting of the agreement's Free Trade Commission, the
ministerial level body that supervises the implementation of the agreement. If the Parties do
not resolve the matter through ministerial consultations within 30 days, the complaining Party
may request the establishment of a dispute settlement panel to consider the matter. If the
panel finds that the Party complained against has failed to effectively enforce its labor law, the
panel may, at the request of the complaining Party, impose an annual monetary assessment of
up to $15 million (adjusted for inflation), if the disputing Parties are unable to reach agreement
on a resolution of the matter or, after reaching agreement, the complaining Party considers
that the responding Party has failed to observe the terms of the agreement. Any such
assessments are to be paid into a fund established by the trade ministers of the disputing
Parties and expended at their direction on appropriate labor initiatives, including efforts to
improve or enhance labor law enforcement in the territory of the responding Party.
More information about the CAFTA‐DR is available on USTR's website. For information about
the CAFTA‐DR labor submission, go to DOL's website, www.dol.gov.
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