Worker Rights and Free Trade Agreements

Free Trade Agreements contain worker rights protections but they have yet to proven effective, even though the protections have gotten stronger in each new round of Free Trade Agreements.

In NAFTA (the North American Free Trade Agreement), worker rights protections (1.0) were contained in a “labor side accord,” outside the main text of the agreement.  Over 50 “labor complaints” have been filed under NAFTA, to little effect.

CAFTA (the Central American Free Trade Agreement) included a “labor chapter” (2.0) within the text of the agreement but it only requires governments to enforce labor law, no matter how weak it is, and initial sanctions consist of a fine that the government essentially pays itself.  A CAFTA complaint filed against Guatemala in 2008 has yet to yield any significant advancement on worker rights in Guatemala.

The most recent round of trade agreements (Peru, Colombia, Panama, and South Korea) include a new, improved “labor chapter” (3.0), requiring countries to meet international standards and not just enforce their own labor law as required by CAFTA and NAFTA but these new worker protections remain untested.

USLEAP believes that the workers rights protections in Free Trade Agreements like CAFTA and NAFTA have been a big step back from those that applied under pre-existing U.S. trade programs. Standards are lower and sanctions are less effective under CAFTA and NAFTA compared to U.S. trade programs that continue to govern trade policy with countries with whom the U.S. does not have a Free Trade Agreement.  Approval of trade agreements like NAFTA and CAFTA have significantly reduced the ability to use U.S. trade policy as a source of leverage for respecting worker rights in Mexico, Central America, and the Dominican Republic.

May 2007 Trade Deal on Worker Rights

In May 2007, House Democrats and the Bush Administration agreed to stronger worker rights provisions in pending trade agreements as a condition for bringing any of these agreements to a vote.  Some unions, including the AFL-CIO, praised the agreement as a significant step towards protecting worker rights but questioned whether the Bush Administration would enforce the protections and argued that the agreement is inadequate in providing protections for the environment, consumers and farmers. The AFL-CIO, Change to Win, and other unions agree that the May 2007 “template” must be further strengthened in any future trade agreements that come after the current round.  Human Rights Watch issued an analysis of the new labor provisions, incorporated into trade agreements with Peru, Panama, Colombia, and South Korea.

Obama Administration Position on Worker Rights Protections and New Trade Agreements

As Senator, President Obama opposed CAFTA but voted for the Peru agreement, citing in part the stronger protections for worker rights represented by the May 2007 deal.

In a February 2009 document released by the U.S. Trade Representative, the Obama Administration stated that it would not seek renewal of "fast track" trade authority before engaging in an extensive round of consultations.  Since then, the Obama Administration has begun negotiations for a TransPacific Partnership (TPP) FTA involving the US, Australia, New Zealand, Brunei, Vietnam, Chile, Singapore and Peru.

USTR Ron Kirk testified in March 2009 that the Obama administration wanted to improve upon the May 2007 agreement, but didn't offer specifics other than to put a critical qualifier that the Administration will not push for agreements that would require changes in U.S. domestic labor law. This is a sign that it will not push for agreements that require compliance with the International Labor Organization (ILO) conventions, most of which have not been ratified by the U.S.  Compliance with ILO conventions is a central tenant of the international trade union movement.

The Administration says it is committed to "working with our trading partners to improve the status, conditions, and protections of workers" and to ensure that "competitiveness is not based on the exploitation of workers."