On July 30th, United States Trade Representative Ron Kirk announced that the U.S. would file a formal complaint against the Guatemalan government for violating labor standards under the Dominican Republic-Central America Free Trade Agreement (CAFTA-DR). According to the Office of the U.S. Trade Representative, the announcement marks “the first labor case the United States has ever brought against a trade agreement partner.” In Kirk’s speech the same day to Allegheny Technologies Inc., a metal manufacturing company in Washington, Pennsylvania, he declared that the Obama administration intended to “[send] a strong message that our trading partners must protect their own workers…and that we are prepared to enforce the full spectrum of American trade rights from labor to the environment.”
Though this development deserves recognition for improving the protection of labor rights under free trade agreements (FTAs), there is reason to be skeptical of the administration’s intentions. Since Barack Obama’s January State of the Union Address, in which he promised to double exports over the next five years, the President has adopted a decidedly pro-trade approach, voicing support in recent weeks for FTAs with Panama, Colombia and South Korea. The case against Guatemala, brought when Congress is becoming increasingly polarized over ratifying further free trade measures, may be an attempt by the Obama administration to quell democratic labor-related concerns by demonstrating that the labor provisions included in FTAs can and will be enforced.
Regardless of its political motivations, the complaint is unlikely to have a significant impact. Since taking effect in Guatemala on July 1st, 2006, CAFTA-DR has spawned systemic labor abuses, anti-unionist violence, and human rights violations. The agreement is intentionally devoid of rigid labor law enforcement mechanisms and lacks sufficiently formidable penalties for noncompliance with labor provisions, making it unfit to induce lasting reform. In this sense, though a positive step, the case against Guatemala should not be seen as a comprehensive solution. The Obama administration would be wise to take this as an opportunity to help the Guatemalan government combat the exploitation of labor by civic authorities acting on behalf of big business and agricultural interests. For the time being, Washington should use the case of Guatemala to recognize the flaws in the U.S.’ current FTA model and begin improving upon them for future agreements.
A Long-Awaited Response to Endemic Labor Abuses in Guatemala
On April 23rd, 2008 the American Federation of Labor and Congress of Industrial Organizations (AFL-CIO), along with six Guatemalan labor unions, filed a public submission to the U.S. Department of Labor’s (DOL) Office of Trade and Labor Affairs (OTLA) claiming that the Guatemalan government had not been fulfilling its labor-related obligations under CAFTA-DR. In the complaint, Thea M. Lee, the AFL-CIO Policy Director, offered five different case studies in which labor laws had been violated repeatedly between CAFTA-DR’s ratification in July 2006 and April 2008. In all of these cases, the Guatemalan government’s inaction, failing to sufficiently respond despite repeated notification, constituted a breach of articles 16.1, 16.2, and 16.3 of the agreement. The comprehensive report also addressed issues that are not dealt with in CAFTA-DR’s labor provisions, such as violence against unionists, unjust dismissal, and the failure of employers to pay into the Social Security System. The submission urged the OTLA to immediately invoke Article 16.6.1 of the agreement to request consultation with the Guatemalan government and pressure its Labor Ministry to rectify the situation.