Trade, Globalization, and the Race to the Bottom

USLEAP, Trade and Worker Rights

USLEAP opposes free trade agreements that do not protect workers and supports efforts to strengthen protections for workers in trade agreements.  USLEAP focuses on worker rights but supports the need for global trade to protect consumers, farmers, and the environment as well.  See the USLEAP trade resource section for groups that focus on these aspects of global trade.

Worker rights protections in Free Trade Agreements have become successively stronger, progressing from NAFTA to CAFTA to those trade agreements covered by a May 2007 agreement between President Bush and Congressional Democrats.  The latter remain untested but the protections included in NAFTA and CAFTA have proven to be inadequate.   Negotiations for a massive new trade agreement pose a threat to stronger worker rights provisions as other countries want weaker standards.

Colombia FTA

For five years, USLEAP worked extensively to block a vote on a Free Trade Agreement (FTA) with Colombia, which was initally signed by both governments in late 2006.  In October 2011, President Obama sent the FTA to Congress where it was approved along with two other Bush-era FTAs with South Korea and Panama. For years, more trade unionists have been murdered in Colombia each year than in any other country and, in some years, more than the rest of the world combined. Over 95% of assassinations go unpunished by the government.  Congressional approval of the Colombia FTA came despite the failure to adequately implement a Labor Action Plan and the absence of any significant progress in ending impunity.  In May 2012, the Obama Administration implemented the Colombia FTA, prematurely giving up its best source of leverage to pressure the Colombian government to improve respect for worker rights. 

NAFTA and CAFTA

USLEAP also supports efforts to block the negotiation of more Free Trade Agreements like NAFTA (North American Free Trade Agreement) and CAFTA (the Dominican Republic-Central America Free Trade Agreement). 

The worker rights protections in CAFTA and NAFTA represent a big step back from those that governed U.S. trade policy with Central America and Mexico prior to the passage of CAFTA and NAFTA.  The labor standards were higher and sanctions more immediate and better targeted than under CAFTA and NAFTA.  The first CAFTA labor complaint was filed in April 2008 by the AFL-CIO and six Guatemalan trade unions.  While the complaint has been pending, violence against trade unionists has increased and there has been little progress addressing other worker rights concerns and no sanctions have yet been applied to Guatemala. The Obama Administration requested the establishment of a CAFTA arbitral panel in August 2011 in order to address the Guatemalan government’s continued failure to enforce its labor laws, including the right to association and collective bargaining but the governments instead resumed confidential negotiations that were continuing as of the end of 2012.  The AFL-CIO and two dozen Honduran unions filed a CAFTA labor complaint against Honduras in March 2012.

The newest trade agreements with Peru, Colombia and Panama contain significant improvements in protections for workers compared to NAFTA and CAFTA, but the provision providing the improved protections remains untested.  Moreover, these FTAs are not fundamentally different than NAFTA and CAFTA and do not represent a new model for global trade.  For a summary analysis of the worker rights provisions in NAFTA, CAFTA and the newest agreements, see page five of the Spring 2012 USLEAP newsletter.

Trans-Pacific Partnership Agreement

The Obama Administration has initiated negotiations for a Trans-Pacific Partnership Agreement with over a half-dozen countries.  Republican leaders in Congress have warned the Administration against strengthening labor protections that go beyond what have been included in the Peru, Colombia and Panama agreements while worker rights advocates like USLEAP argue that they should be strengthened further.  A majority of countries engaged in the negotiations reportedly oppose a U.S. proposal on worker rights that is apparently slightly stronger than those contained in the newest trade agreements with Peru, Colombia, South Korea, and Panama.  The Cititzens Trade Campaign is leading U.S. grassroots opposition to the TPP negotiations.

Negotiations for this massive new trade agreement pose a threat to stronger worker rights provisions as other countries want weaker standards.

Using U.S. Trade Policy to Promote Worker Rights

The passage of Free Trade Agreements has been eliminating the leverage provided by the worker rights provisions of U.S. trade programs, lowering standards and weakening enforcement mechanisms.

U.S. trade programs like the Generalized System of Preferences (GSP) and the Andean Trade Preference programs require countries to improve their track record on worker rights as a condition for receiving preferential access to the U.S. market through low or no duties. These conditions, first adopted in 1984, have been the single most effective source of leverage against Latin American governments that fail to respect basic worker rights and enforce their own labor laws. The U.S. government has generally not used these worker rights conditions to much effect unless pressured by U.S. groups, including USLEAP, the AFL-CIO, Human Rights Watch, the International Labor Rights Forum, the Washington Office on Latin America, and others.

USLEAP, among others, has used trade pressure as a tool to support general improvements in the worker rights situation in Latin American countries like reduced violence in Colombia and labor law reform in Ecuador as well as to support workers organizing at particular worksites (e.g. Phillips-Van Heusen and Choi & Shin apparel workers in Guatemala). 

USLEAP believes that applying trade pressure from the U.S. (e.g. threats of losing U.S. trade benefits or opposition to specific trade agreements) must be done only with the support of workers from the region.  Otherwise, trade pressure from the U.S. that cites concerns about workers abroad can appear to be, or may in fact be, motivated by protectionist interests in the U.S.

"Fast Track"

"Fast track" is the authority granted by Congress to the President to negotiate trade agreements that cannot be amended by Congress. "Fast track," formally known as Trade Promotion Authority, expired at the end of June 2007.  USLEAP opposes a renewal of "fast track" without major changes in global trade rules.  Many groups concerned about free trade agreements have rallied around a new model for trade proposed by the TRADE Act: the Trade Reform, Accountability, Development and Employment Act.

Passage of "fast track" legislation in 2002 led to a strong push by the Bush Administration to negotiate new trade agreements around the world, including the Dominican Republic-Central America Free Trade Agreement (CAFTA), which passed Congress in 2005, and Free Trade Agreements (FTAs) with Colombia, Peru, and Panama.  The Peru agreement passed in 2007; the Colombia and Panama (and South Korea) agreements passed in October 2011. The Obama Administration is expected to seek in 2013 a renewal of fast track authority.

With support, USLEAP's work on trade has:

  • Helped delay the Colombia Free Trade Agreement from coming to a vote for five years, in part by providing continuing and concise documentation on violence and impunity;
  • Helped win labor law reform, new labor courts, and increases in the minimum wage in Guatemala;
  • Helped win first convictions for violence against trade unionists in Guatemala;
  • Won legal recognition of trade unions in clothing factories in Central America;
  • Helped win a temporary delay in implementing "race to the bottom" rules for the banana trade;
  • Helped put reform labor law in Ecuador on the political agenda for both the U.S. and Ecuadorian governments;
  • Submitted worker rights petitions on Guatemala and Ecuador and backed complaints filed on Mexico;
  • Testified before the U.S. Trade Representative;
  • Organized fact-finding delegations to Guatemala, Ecuador, and Colombia, and more.