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1 1 (December 18, 2020)

handle is hein.crs/govdcye0001 and id is 1 raw text is: Labor Enforcement Issues in U.S. FTAs B ackground 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), a side agreement to the 1994 North American Free Trade Agreement (NAFTA). Since then, U.S. 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 requested by Congress through trade promotion authority (TPA), recent U.S. FTAs also subject labor chapters to the same dispute settlement (DS) procedures as other obligations, although with minor modifications. Some Members of Congress view strong labor provisions in U.S. FTAs as an important issue and have raised concerns over FTA partner compliance with commitments and the U.S. record of enforcement. These issues were part of the debate in the renegotiation of NAFTA as the U.S.-Mexico-Canada Agreement (USMCA), which entered into force in 2020. 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 and in the eligibility criteria of unilateral trade preferences programs. 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. Enfocemnt M cha ism inU.S. F TAs 3 The U.S. has brought complaints over FTA partners' compliance with labor commitments under five FTAs listed below. Among these agreements, provisions subject to DS procedures and remedies may differ: * NAALC provisions were subject to dispute settlement procedures separate from those applicable to the main NAFTA. NAALC aimed to settle labor complaints primarily via dialogue and consultations. If consultations were unable to resolve a complaint, certain issues could be referred to other mechanisms. The full spectrum of dispute procedures, including an arbitral panel and limited monetary penalties, applied to limited set of allegations/obligations involving: a persistent pattern of failure to enforce occupational safety and health, child labor or minimum wage technical labor Updated December 18, 2020 standards, where the matter is trade-related and covered by mutually recognized labor laws. Other issues, such as freedom of association and the right to organize, were limited to ministerial consultations. USMCA procedures supersede NAALC for any future disputes involving North American partners (see below). 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. Parties may impose monetary penalties in limited circumstances. 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 labor chapters reflect provisions required by the May 10th Agreement, a 2007 bipartisan deal between congressional leadership and the George W. 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 a 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. Colombia agreed in a separate bilateral labor action plan to meet certain commitments prior to FTA ratification. Many observers expect additional labor complaints under USMCA. It revised NAFTA to include a dedicated labor chapter and reflects negotiating objectives in the latest version of TPA (enacted in 2015). USMCA imposed additional substantive commitments that go beyond the Peru and Colombia FTAs and created a new enforcement mechanism for labor violations at facilities (see below). The Office of Trade and Labor Affairs (OTLA) within the U.S. Department of Labor's Bureau of International Labor Affairs 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 with its findings and Mips:------------------.-, g-v

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