Washington, D.C. — Acting United States Trade Representative Demetrios Marantis and Acting Secretary of Labor Seth Harris today announced that the United States and Guatemala have agreed on a robust enforcement plan to resolve concerns raised in a labor case brought by the United States under the Dominican Republic-Central America-United States Free Trade Agreement (CAFTA-DR). The 18-point plan includes concrete actions with specific time frames that Guatemala will implement within six months to improve labor law enforcement. This is the first labor case that the United States has brought to dispute settlement under a trade agreement.
“This landmark agreement with Guatemala demonstrates that, by using the tools in our trade agreements, we can achieve tangible and concrete commitments that will improve the daily lives of workers in Guatemala and ensure a level playing field for American workers upon its implementation,” said Ambassador Marantis. “This plan reflects Guatemala’s commitment to constructive engagement to meet its labor obligations under our trade agreement and the United States’ commitment to working with our trade agreement partners to help ensure respect for labor rights.”
Acting Secretary of Labor Seth Harris said, “Through dedication and perseverance, Guatemala and the United States have reached a strong, groundbreaking agreement. Its full and timely implementation over the coming months will yield demonstrable improvements in Guatemalan labor law enforcement that will be a real victory for workers.”
Under the Enforcement Plan, which was the result of extensive engagement and resolve by both governments, Guatemala has committed to strengthen labor inspections, expedite and streamline the process of sanctioning employers and ordering remediation of labor violations, increase labor law compliance by exporting companies, improve the monitoring and enforcement of labor court orders, publish labor law enforcement information, and establish mechanisms to ensure that workers are paid what they are owed when factories close.
The United States and Guatemala will shortly sign and release the full text of the Enforcement Plan. A summary of key aspects of the Enforcement Plan is available at USTR’s website here.
On April 23, 2008, the American Federation of Labor and Congress of Industrial Organizations (AFL-CIO) and six Guatemalan worker organizations filed a public submission under the CAFTA-DR alleging that the Guatemalan government had violated its labor obligations by failing to effectively enforce its labor laws. After reviewing the submission, the U.S. Department of Labor issued a public report finding significant weaknesses in Guatemala's enforcement of its labor laws.
In an attempt to resolve its concerns, the U.S. Government requested consultations under the CAFTA-DR labor chapter on July 30, 2010. Unable to resolve the matter through consultations, the United States requested a meeting of the Free Trade Commission on May 16, 2011, which took place on June 7, 2011. Because the issues remained unresolved, the United States requested the establishment of an arbitral panel on August 9, 2011. Once the panel was constituted, the parties suspended the work of the panel while they continued to negotiate to reach agreement on an enforcement plan.
The dispute settlement panel will be suspended to allow for implementation of the Enforcement Plan. If the Plan is not implemented within specified time frames, arbitration may resume.