US to File First Free Trade Labor Rights Case Against Guatemala

US Trade Representative Ambassador Ron Kirk announced Friday that the US will file a case against Guatemala for labor rights violations. The case, filed under the Dominican Republic-Central America-United States Free Trade Agreement (CAFTA-DR), will be the first time the US has pursued a labor violations claim against a free trade partner. Addressing Guatemala’s labor standards, Kirk said:

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.

Also on Friday, US Secretary of Labor Hilda Solis announced that the US has requested labor consultations with Guatemala and expressed concern about the “labor-related violence in Guatemala, a problem which is serious and apparently deteriorating.” If within 90 days the US and Guatemala fail to resolve the issue, the dispute could go before an arbitration panel. Ultimately, if Guatemala is found guilty of violating CAFTA-DR, it could be subject to a yearly penalty of $15 million, which will fund the enforcement of its labor laws.

In April 2008 the American Federation of Labor and Congress of Industrial Organizations (AFL-CIO) filed a public submission under CAFTA-DR claiming Guatemala had failed to enforce its labor laws. Following the submission, the US Department of Labor (DOL) issued a report highlighting Guatemala’s ineffective enforcement of those laws, alleging its failure to meet its obligation under CAFTA-DR. CAFTA-DR was signed into law in 2005, making it the first official trade pact between the US and Central America. CAFTA ends tariffs against US products in Guatemala, El Salvador, Nicaragua, the Dominican Republic, Costa Rica, and Honduras, and ensures those countries duty-free access to the US.