US Resumes Guatemala Labor Dispute, Sanctions Within Reach

The Obama administration will restart litigation in a U.S.-Guatemala labor dispute, administration officials, lawmakers and a union leader announced on Sept. 18. The dispute is the first to focus on labor in a U.S. free trade agreement. The Office of the U.S. Trade Representative in August gave Guatemala four more weeks to prove its labor policy and practice is in compliance with a U.S.-Guatemala labor action plan in 2013, but those efforts evidently fell short. The 2013 Enforcement Plan was brokered under the Dominican Republic-Central American Free Trade Agreement.

The U.S. is now able to fine and sanction the country at any time, and that could have an impact on apparel trade (see 14082701). USTR Michael Froman in the Sept. 18 remarks said bilateral trade is increasingly dependent on agriculture, textile and apparel products. “Unfortunately, key commitments under the Enforcement Plan remain outstanding, such as passing legislation that enhances the authority of the Ministry of Labor to impose sanctions when it finds a violation of Guatemala’s labor laws and reduces the time it takes to bring labor law violators to justice,” he said. Guatemala did, however, hire over 100 new inspectors and strengthened a mechanism to verify employer compliance, Froman said.

Democrats praised the move as a step in the right direction in leveling the playing field for U.S. workers and goods. “Only meaningful improvements in economic and security conditions and strengthening institutions of democratic governance in Guatemala can provide a lasting and sustainable solution to its many challenges,” said Chairman of the House Democratic Caucus Xavier Becerra, D-Calif. “Trade should be about removing barriers, improving standards for working men and women, and lifting all boats so we can trade as partners and as equals.”