Monday, August 2, 2010

US To File First CAFTA-DR Labor Case Against Guatemala

U.S. Trade Representative Ron Kirk announced on Friday that the United States intends to initiate dispute settlement proceedings against Guatemala under the Dominican Republic-Central American-United States Free Trade Agreement (CAFTA-DR).  This will be the first labor case the United States has ever filed under a free trade agreement.  USTR Kirk stated in a press release:

"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 . . . 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."

Under Article 16.2 of CAFTA-DR, each party promises to effectively enforce its labor laws. The United States alleges that Guatemala has violated Article 16.2.1(a) by failing to effectively enforce Guatemalan labor laws relating to the right of association, the right to organize and bargain collectively, and acceptable conditions of work. The United States government also has expressed concerns about the response of the Government of Guatemala to the use and threats of violence against persons and organizations who attempt to exercise their labor rights.  The United States claims that the failure to enforce labor laws in Guatemala creates an unfair playing field that harms U.S. workers.

The parties will now enter a 60-day consultation period.  If they are unable to resolve the matter during that time, the United States, as the complaining Party, may 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 United States may request the establishment of a Chapter 20 dispute settlement panel to consider the matter.


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