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Office of Trade and Labor Affairs (OTLA)

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Free Trade Agreements (FTAs)

How Labor Rights Are Enforced in FTAs (Submissions)

The United States has free trade agreements (FTAs) with 19 countries that include provisions to protect worker rights and facilitate cooperation among labor ministries. These labor provisions establish official processes for receiving complaints, or "submissions" from interested organizations that believe a trading partner is not fulfilling the labor commitments it made. In the United States, the U.S. Department of Labor, specifically the Office of Trade and Labor Affairs (OTLA), receives and reviews submissions made under the NAALC and the FTA Labor Chapters.

The Submission Process

A labor submission must meet certain criteria. The allegations must raise issues relevant to the labor provisions in the NAALC or FTA and illustrate a country's failure to comply with its obligations. OTLA's procedural guidelines provide a detailed explanation of what is required. If the submission meets these criteria, OTLA will accept the submission for review. OTLA then conducts the review and issues a public report on its findings generally within six months of accepting the submission. Depending on the outcome of the review, OTLA may recommend further actions, including that the U.S. request Consultations with the other country. The U.S. requested the first labor-related consultations ever under an FTA Labor Chapter on July 30, 2010 with Guatemala.

If Consultations fail to resolve the issue(s), FTA dispute settlement procedures may be invoked under certain circumstances. The procedures and remedies vary depending on the particular FTA, and the NAALC limits which labor issues can be taken to dispute settlement.

Labor Submissions Accepted for Review by OTLA

OTLA has accepted labor submissions for review in several countries. OTLA’s decision to review a public submission does not indicate any determination as to the validity or accuracy of the allegations contained in the submission. This will be addressed within the report.

Honduras

On March 26, 2012, OTLA received a submission from the American Federation of Labor and Congress of Industrial Organizations (AFL-CIO) and 26 Honduran Federations, Trade Unions and Civil Society Organizations. The submitters allege that the Government of Honduras' actions or lack thereof denied workers their rights under Honduran law relating to freedom of association, the right to organize, child labor, the right to bargain collectively, and acceptable conditions of work in the Honduran apparel and auto manufacturing, agriculture and port sectors, in violation of the Labor Chapter of the Dominican Republic — Central America — United States Free Trade Agreement (CAFTA-DR). On May 14, 2012, OTLA accepted the submission for review, and on May 22 a Federal Register notice announced its decision. OTLA is now in the process of conducting its review of the submission to determine its findings on the allegations in the submission, which it will present in a public report to the Secretary of Labor within 180 days, unless OTLA determines that circumstances warrant an extension.

Dominican Republic

On December 22, 2011, OTLA received a submission from Father Christopher Hartley. The submitter alleges that the Government of the Dominican Republic's actions or lack thereof denied workers their rights under Dominican law relating to freedom of association, the right to organize, child labor, forced labor, the right to bargain collectively, and acceptable conditions of work in the Dominican sugar sector, in violation of the Labor Chapter of the Dominican Republic — Central America — United States Free Trade Agreement (CAFTA-DR). On February 22, 2012, OTLA accepted the submission for review, and on March 15, 2012, it issued a Federal Register notice on its decision. OTLA is now in the process of conducting its review of the submission to determine its findings on the allegations in the submission, which it will present in a public report to the Secretary of Labor. On August 20, 2012, OTLA determined that an extension of time for its review was warranted, and notified the public in a Federal Register notice that published on August 28, 2012.

Mexico

On November 14, 2011, OTLA received a submission from the Mexican Union of Electrical Workers (Sindicato Mexicano de Electricistas, SME) and over 90 other organizations (including the AFL-CIO, the ITUC, and many grassroots organizations) under the North American Agreement on Labor Cooperation (NAALC). The submission alleges that the Government of Mexico (GOM) has failed to uphold its commitments under Articles 2 through 6 of the NAALC stemming from the GOM's actions or failure to take action following the issuance of a Presidential decree on October 10, 2009, dissolving the state-owned electrical power company, Central Light and Power, and terminating the employment of over 44,000 SME members. On January 13, 2012, OTLA accepted the submission for review and issued a Federal Register notice on its decision. OTLA is now in the process of conducting its review of the submission to determine its findings on the allegations in the submission, which it will present in a public report to the Secretary of Labor. On June 25, 2012, OTLA determined that an extension of time for its review was warranted, and notified the public in a Federal Register notice that published on July 2, 2012.

Bahrain

On April 21, 2011, OTLA received a submission from the American Federation of Labor and Congress of Industrial Organizations (AFL-CIO), with a statement from the General Federation of Bahrain Trade Unions. The submission alleges the Government of Bahrain has violated the Labor Chapter of the Bahrain – United States Free Trade Agreement by failing to fulfill its obligations and commitments with regard to the right of association, generally, and in particular with regard to non-discrimination against trade unionists. On June 10, 2011, OTLA accepted the submission for review and issued a Federal Register notice on its decision on June 16, 2011. OTLA has met with the submitters and the Government of Bahrain as part of its efforts to prepare a public report with findings and recommendations on the allegations contained in the submission. On December 9, OTLA notified the submitters and the Government of Bahrain it had extended its period of review.

Peru

On December 30, 2010, OTLA received a submission from the Peruvian National Union of Tax Administration Workers (SINAUT), Sindicato Nacional de Unidad de Trabajadores de SUNAT. The submission alleges that SUNAT, an executive branch agency of the Government of Peru, has failed to comply with Peru's labor laws as they relate to collective bargaining, in violation of the Labor Chapter of the U.S. Peru Trade Promotion Agreement. On July 19, 2011, OTLA accepted the submission for review and issued a Federal Register notice on its decision on July 26, 2011. OTLA has engaged with the submitters and the Government of Peru as part of its efforts to prepare a public report with findings and recommendations on the allegations contained in the submission. On January 10, 2012, OTLA notified the submitters and the Government of Peru it had extended its period of review.

The Office of Trade and Labor Affairs (OTLA) of the U.S. Department of Labor has conducted an extensive review of the allegations contained in Submission 2010-03, filed under the United States-Peru Trade Promotion Agreement (PTPA) by the Peruvian National Union of Tax Administration Workers (SINAUT).  The submission alleges that the SINAUT’s employer, the National Superintendant of Tax Administration (SUNAT), failed to effectively recognize the union’s right to collective bargaining.  Based on the review, the OTLA has determined that the Peruvian Ministry of Labor and Promotion of Employment appears to have fulfilled its duties during the relevant collective bargaining processes, but the SUNAT failed to comply with certain elements of the Peruvian Collective Bargaining Law, including deadlines for launching negotiations.  With regard to all other issues raised in the submission, the OTLA has determined that important legal ambiguity during the period at issue prevents a finding that the SUNAT failed to comply with the law or that the Government of Peru failed to comply with or enforce its own labor laws during that time. 

Throughout the review process, the Peruvian government has demonstrated a willingness to productively discuss with the U.S. government the issues raised in the submission.  In addition, since the petition was filed, the Government of Peru has taken important steps to address some of the issues raised therein, including by issuing legal instruments to help clarify legal ambiguity and facilitate collective bargaining.  The OTLA does not believe formal consultations are needed to continue such positive engagement and progress on these matters.  As a result, the OTLA does not recommend formal consultations between the U.S. government and the Peruvian government under Article 17.7.1 of the PTPA Labor Chapter.  

North American Agreement on Labor Cooperation

Learn more about the countries with submissions that OTLA accepted for review: Guatemala, Peru, Bahrain, and the Dominican Republic.

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How FTAs Involve Labor Rights

In 1993, the Presidents of the United States, Canada, and Mexico signed the North America Free Trade Agreement (NAFTA), as well as the first side agreement on labor standards, the North American Agreement on Labor Cooperation (NAALC). Beginning with the U.S.-Jordan FTA in 2001, all subsequent FTAs have included labor provisions within the text of the agreements.

The labor provisions of FTAs help ensure that the benefits of trade are widely shared, that worker rights are not denied in order to gain a trade advantage or attract investment, and consequently that U.S. businesses and workers compete on a level playing field globally. For the United States, the Trade Agreement Administration and Technical Cooperation Division within the Office of Trade and Labor Affairs serves as the point of contact for the labor provisions of the NAALC and FTAs.

The NAALC and the FTA Labor Chapters promote cooperation among trading partners to achieve these goals. For example, the labor provisions include mechanisms for meetings of the Labor Ministries to discuss progress in implementing the labor provisions of the NAALC and FTAs and to develop cooperative activities, such as technical exchanges.

National Advisory Committee for Labor Provisions of U.S. Free Trade Agreements

In March 2011, Secretary Solis nominated twelve individuals representing the public, the business sector, and worker organizations to the National Advisory Committee (NAC) for Labor Provisions of U. S. Free Trade Agreements. The committee is one way that OTLA channels external advice from key stakeholders into ILAB free trade agreement policy.

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Which FTAs Have Labor Provisions

For specific information on FTAs with Labor Provisions, our work with FTA partners, and copies of an FTA Labor Chapter, please choose from the links below:

North American Agreement on Labor Cooperation

U.S. — Jordan Free Trade Agreement

U.S. — Chile Free Trade Agreement

U.S. — Singapore Free Trade Agreement

U.S. — Morocco Free Trade Agreement

U.S. — Australia Free Trade Agreement

U.S. — Bahrain Free Trade Agreement

U.S. — Central America-Dominican Republic Free Trade Agreement

U.S. — Oman Free Trade Agreement

U.S. — Peru Trade Promotion Agreement

U.S. — Colombia Free Trade Agreement

U.S. — Panama Trade Promotion Agreement

U.S. — Republic of Korea Free Trade Agreement

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How Labor Rights Are Reviewed and Strengthened before FTA Ratification

Trade Act of 2002

Per the Trade Act of 2002 [sections 2102(c)(5), 2102(c)(8) and 2102(c)(9)] and subsequent delegations of responsibilities that it creates, ILAB prepares for Congress three reports for every country with which the United States intends to establish a free trade agreement: a U.S. employment impact report, a report on the labor rights situation in our proposed partner country, and a report on laws governing exploitative child labor in the partner.

Colombia Action Plan Related to Labor Rights

The United States-Colombia Trade Promotion Agreement (Agreement) includes strong protections for workers' rights based on the May 10, 2007 bipartisan Congressional-Executive agreement to incorporate high labor standards into America's trade agreements. The Agreement includes obligations for Colombia to protect fundamental labor rights as well as to effectively enforce existing labor laws, which will enable American workers and businesses to compete on a level playing field.

In addition, President Obama insisted that a number of serious and immediate labor concerns be addressed before he would send the Agreement to Congress. These concerns include violence against Colombian labor union members; inadequate efforts to bring perpetrators of murders of such persons to justice; and insufficient protection of workers' rights in Colombia. As a result, the U.S. and Colombian governments have agreed to an ambitious and comprehensive Action Plan that includes major, swift and concrete steps the Colombian government will take to address outstanding labor concerns.