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1 1 (August 23, 2019)

handle is hein.crs/govbava0001 and id is 1 raw text is: La Congressional Research Service ~Info rming th Veslat've debate since 1914 Labor Enforcement Issues in U.S. FTAs Background Labor provisions in free trade agreements (FTAs)-both in the U.S. and globally-were first included in the North American Agreement on Labor Cooperation (NAALC), the side agreement to the 1994 North American Free Trade Agreement (NAFTA). Since then provisions have evolved from commitments not just to enforce a country's own domestic labor laws, but also to adopt and enforce core principles of the International Labor Organization (ILO). As mandated by Congress through trade promotion authority (TPA), recent U.S. FTAs also subject labor chapters to the same dispute settlement procedures as all other obligations. Some Members view strong worker rights provisions in U.S. FTAs as an important issue and they have raised concerns over FTA partner compliance with labor commitments and the U.S. record of enforcement. These issues were part of the debate over the Trans-Pacific Partnership (TPP) and in the NAFTA renegotiation, signed in 2018 as the U.S.-Mexico-Canada Agreement (USMCA). Labor standards are not part of World Trade Organization (WTO) rules; in 1996, members reaffirmed the ILO as the competent body to deal with labor issues, while denouncing the use of labor standards for protectionist purposes. Limited progress at the WTO led several countries to include labor commitments in FTAs. The United States and others also include worker rights as eligibility criteria for developing countries to receive unilateral trade preferences. U.S. FTAs have set precedents both in terms of the scope and enforceability of labor provisions. An ILO report found as of 2016, 77 out of 267 FTAs globally included labor provisions, compared to 21 in 2005. Unlike U.S. practice, the majority of agreements do not subject labor provisions to dispute settlement. Most provide a framework for dialogue, capacity building, and monitoring, rather than link violations to economic consequences, such as trade sanctions. In cases where dispute settlement is applicable, such mechanisms have been rarely invoked; countries largely aim to solve disputes via cooperative consultations. Enforcement Mechanisms in U.S. FTAs Complaints over U.S. FTA partners' compliance with labor commitments have been brought under five FTAs. Among these agreements, provisions subject to dispute resolution procedures, and remedies may differ: * NAALC contains 11 principles on worker rights, subject to separate dispute settlement procedures from the main NAFTA. NAALC aims to settle complaints regarding labor enforcement primarily via dialogue and consultations, through the national administrative offices and at the ministerial level. If consultations are unable to resolve a complaint, certain issues can be referred to other mechanisms. The full spectrum of Updated August 23, 2019 dispute procedures, including an arbitral panel and limited monetary penalties, applies to allegations involving: a persistent pattern of failure to enforce occupational safety and health, child labor or minimum wage technical labor standards, where the matter is trade-related and covered by mutually recognized labor laws. Other issues, such as freedom of association and right to organize are limited to ministerial consultations. Dominican Republic-Central America FTA (CAFTA-DR) and U.S.-Bahrain FTA labor chapters include one provision subject to enforcement-a party shall not fail to effectively enforce its labor laws, through a sustained or recurring course of action or inaction, in a manner affecting trade. Procedures related to labor disputes may include limits on monetary penalties. Creation of a labor cooperation mechanism, in addition to a capacity building mechanism and labor affairs council in the case of CAFTA-DR, were intended to oversee review and implementation of the labor obligations. CAFTA-DR was the first U.S. FTA to include measures in support of labor capacity building. * U.S.-Peru, U.S.-Colombia FTA and USMCA labor chapters reflect provisions required by the May 10th Agreement, a 2007 bipartisan deal between congressional leadership and the Bush Administration. The agreement called for: (1) an additional enforceable commitment that FTA parties adopt and maintain core labor principles of the 1998 ILO Declaration; and (2) the same dispute settlement procedures and remedies, including recourse to trade sanctions, for FTA labor provisions as applied to other obligations. A party alleging violation of the provision on ILO commitments must demonstrate that failure to adopt or maintain ILO principles has been in a manner affecting trade or investment. USMCA, which revised the NAALC, also reflects updated negotiating objectives on labor within TPA-2015 and covers new commitments. For Colombia, a labor action plan was also negotiated, requiring that certain commitments be met prior to FTA ratification. Summary of U.$. Labor Disputes The Office of Trade and Labor Affairs (OTLA) within the U.S. Department of Labor receives and reviews complaints (termed submissions) of alleged violations of FTA labor commitments. The DOL consults and coordinates with the U.S. Trade Representative (USTR) and State Department on labor enforcement. Per OTLA, a submission must raise issues relevant to the labor provisions in the NAALC or FTA and illustrate a country's failure to comply with its obligations. If the submission is accepted, OTLA does a review and issues a public report on its findings, with recommendations to the FTA partner. OTLA may also recommend further actions, including that the U.S. request htops:!crsreports~cong --ssqg

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