A. GSP is a U.S. trade program that provides duty-free treatment for some exports from developing countries. Many countries in the North have adopted GSP programs as a development policy, on the questionable thesis that development is faster when countries in the South can export more easily to the North. GSP is not a trade agreement, but a unilateral U.S. program. It is overseen by the U.S. Trade Representative. Most countries in the South receive some GSP benefits from the U.S. program.

To qualify for GSP benefits, a country must meet certain criteria (e.g. income eligibility, protection for intellectual property rights, etc).

B. Worker rights conditionality. Since 1984, GSP eligibility has also been conditioned, by law, on the exporting country taking steps to meet internationally-recognized worker rights. Internationally-recognized worker rights are defined as

(a) freedom of association
(b) the right to organize and bargain collectively
(c) a prohibition on forced labor
(d) a prohibition on child labor
(e) acceptable conditions of work with respect to minimum wage, hours, and health and safety. ["Acceptable" is not defined.]

C. Petition process. The GSP program provides for any organization to file a petition requesting USTR to review a country's worker rights practices to determine whether the country should lose its GSP benefits. USTR can refuse to take up the petition at all (on the grounds that it has no merit) or can accept it for review. "Review" is effectively probation. Once USTR reviews and investigates a country's worker rights practices, it has three options: to end the review/probation, to continue the review/probation for another period of time, or, rarely, to suspend duty-free benefits on some or all of the GSP products exported by the country under review.

D. History. During the 1980s, the worker rights conditions of the GSP program were generally applied by the U.S. government in accordance with its foreign policy. In Central America, this meant in accordance with U.S. Cold War policy. Hence, Nicaragua lost its GSP benefits while El Salvador did not. In general, however, the worker rights conditions have not been applied unless there is outside pressure on USTR.

GSP, WORKER RIGHTS AND GUATEMALA

A. Brief history. The GSP worker rights process has been used more intensely with respect to Guatemala than with any other country. GSP petitions on Guatemala were filed annually starting in 1987; in 1992 USTR finally accepted a petition for review, in part because the LAWG helped organize support from members of Congress. USTR then kept Guatemala under review (probation) until 1997 when review was ended, primarily as a reward for signing the Peace Accords. When USTR lifted review in 1997, it warned that it would continue to monitor the situation closely and said it might initiate its own review should conditions warrant. Petitions were filed again in 1998 and 1999 but were not accepted. In October 2000, however, USTR, for the first time in its history, initiated its own worker rights review, of Guatemala.

B. Evaluation. USLEAP, formerly the U.S./Guatemala Labor Education Project, has been active in the GSP process since 1991. It is clear that the GSP process - and the potential loss of trade benefits - was very effective at getting the attention of the Guatemalan government and business sector in the early years. For example, just before USTR hearings on the 1992 petition, the Government of Guatemala (GOG) approved legal recognition of the first maquila union in six years. During the 1992-1997 review period, the Guatemalan government took several important steps in response to the review, including raising the minimum wage, reforming the labor code, establishing new labor courts, increasing fines for violators, and streamlining the legal recognition process. However, the new labor courts remain dysfunctional, key provisions of the labor code are not enforced, fines are rarely paid, and there are massive violations of the minimum wage in the agricultural sector. Guatemalan trade union leaders say that if nothing else, the worker rights situation would have been worse with the GSP threat.

In more recent years, Guatemalan leaders appear to have become convinced that USTR will only threaten and will never actually suspend benefits. The threat has been around so long that it is no longer taken seriously, even when USTR initiated its own review last year. The election of a Republican President has emboldened Guatemalan business and government leaders who believe that the Republican opposition to linking worker rights and trade means that the new Bush USTR will not follow through on what was begun by the old Clinton USTR.

HISTORY OF WORKER RIGHTS PETITIONS ON GUATEMALA

1987-1991 Petitions filed annually by various groups, including the United Electrical Workers Union, US/GLEP, the AFL-CIO, and the International Labor Rights Fund. Petitions rejected by USTR.

1992 USTR accepts two petitions, one filed jointly by US/GLEP, the International Labor Rights Fund, Washington Office on Latin America, the National Council of Churches and six other groups, and one filed by the AFL-CIO.

1997 USTR removes Guatemala from GSP review.

1998-1999 Petitions filed by USLEAP, UNITE, the International Labor Rights Fund, and the AFL-CIO are rejected.

August 2000 AFL-CIO files another petition (focused largely on the Sitrabi case).

October 2000 USTR initiates own review (technically, USTR did not accept the AFL petition but, in order to send a stronger message to the GOG, self-initiated a worker rights review for the first time).

March 2001 Hearings on GSP to be held March 9.

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Resources:

Trade Conditions and Labor Rights: U.S. Initiatives, Dominican and Central America Responses, by Henry J. Frundt (1998: University Press of Florida, Gainesville).

Current petitions, supporting and opposing material are available at the USTR Reading Room at 600 17th St., N.W. Appointment only. Call 395-6186.