06 Mar Incorporating Labor Rights into Trade Agreements: Democrats Flex their Muscle
The NYT has an article today discussing negotiations between the President and Congress on revisions to pending bilateral free-trade agreements. The new Democratic Congress is pushing for greater protection of labor rights in those trade agreements with Panama, Peru, and Colombia.
I’m far from an expert on labor rights in trade agreements, but I do find a couple references in the article of interest.
(1) Clinton – Good/ Bush – Bad
The article implies that the Bush Administration has been steadfastly refusing to include labor rights in such trade agreements, thus losing Democratic support, whereas President Clinton had been more willing to includes such labor provisions. I certainly welcome any commenters who can correct me, but my impression was that both administrations have been unwilling to include very strict, enforceable labor rights provisions in trade agreements. The leading Clinton-era labor-trade provision, I believe, is the NAALC (North American Agreement for Labor Cooperation) side agreement to NAFTA. My impression is that NAALC has been relatively dormant and I don’t quite see how it is different, substantively, from a variety of labor provisions that have been added to pretty much all Bush-era trade agreements. Compare CAFTA Art. 16 “(“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…”) and NAALC (“”Each Party shall promote compliance with and effectively enforce its labor law through appropriate government action . . .”).
There are differences, of course, but they don’t seem to be particularly significant. It strikes me that partisanship is more of the reason why Democrats opposed Bush free trade deals and supported Clinton ones (and vice versa for some Republicans). (Again, I welcome folks who are knowledgeable and can point out the differences).
2. Incorporating the ILO and Delegation
The article suggests the real substantive sticking point between the President and Congress is an effort by Democrats to require trade partners to adhere to International Labour Organisation standards. Prior agreements, even Clinton-era ones, simply required the enforcement of local labor laws.
What I find interesting is that business folks who oppose this provision have come up with a new objection to incorporating the ILO standards – it might flow backward and require the U.S. to change and revise its own labor standards. This type of “delegation” argument seems like a new one in the trade context, at least when it is raised by typically pro-trade business people. Although trade agreements are typically non-self executing, this might be a valid objection, although I’m fairly ignorant of the details. This at least further demonstrates that many folks in trade are not anti-internationalist or pro-internationalist. It usually just depends on whose ox is being gored. Free traders may be seeing the first signs of that.
At the IADB, we have been working on the implementation of CAFTA’s labor chapter. That is why we have decided to draft a paper analyzing the implications of implementing labor commitments under recent US FTAs. Once its done, I’ll be happy to send a copy around. Certainly, labor and trade regulation under FTAs has evolved since NAALC. The major change is not in terms of which labor rights are protected (although their have been changes here), rather on the consequences for not enforcing them. Under recent FTAs the lack of enforcement of some labor rights can result in a trade dispute under the DS mechanism of the agreement. In other words, a labor violation can potentially generate a commercial sanction. In most cases, commercial sanctions for labor violations are capped at US$15 million/year. There have also been some developments as of which labor rights (domestic or international) should be protected under the agreements. For many developing countries this is not a problem. Most of them have already ratified major ILO conventions and incorporated them into domestic regulation. However, their problem relies on lack of institutional capacity for enforcement. As you said, and I totally agree with you on that, if… Read more »
In my previous comment when I wrote “Most of them have already ratified major ILO conventions. I meant to say “Many of them…”, at least in the context of CAFTA. Sorry about that…
Just a quick couple of thoughts on this: First, Julian’s point is generally correct if one looks at the text of the agreements. The Bush administration has by and large adopted as boilerplate language on labor and environmental issues texts that were first agreed in NAFTA and its side agreements on labor and the environment. And the labor unions (and to some degree enviros) have criticized that language pretty consistently, both during the NAFTA debate and ever since as not being strong enough. Second, I think many labor and environmental observers would say that the real difference between the two administrations has been in the follow-up. NAFTA’s side agreements created two trilateral institutions (the Commissions for Labor and Environmental Cooperation, respectively), and gave them various mandates. (Full disclosure: I participated in the negotiation, and also chaired the EPA advisory committee on the CEC for several years under both the Clinton and Bush administrations.) The Clinton administration was fairly actively involved in trying to make them work — which isn’t to say that it wasn’t criticized for not trying harder, especially, again, by labor unions. Critics would say that the Bush administration’s efforts have tailed off, and that the organizations now… Read more »