U.S. starts first-ever CAFTA enforcement action against Guatemala for labor rights


The U.S. Trade Representative (USTR) announced it’s finally going to pursue a labor rights case against Guatemala, more than six years after six Guatemalan unions and the AFL-CIO filed a complaint alleging that violence against unionists and Guatemala’s failure to enforce its own labor laws violated commitments it made under the Central American Free Trade Agreement (CAFTA).

On Aug. 9, 2011, USTR asked for a three-member arbitration panel to be formed, under the CAFTA-DR dispute settlement chapter, to address Guatemala’s apparent failure to effectively enforce its labor laws — including labor laws relating to the right of association, the right to organize and bargain collectively, and acceptable conditions of work. But the United States and Guatemala agreed to suspend the panel while they negotiated and implemented an enforcement plan, which they signed in April 2013.

Under that plan, Guatemala committed to strengthen labor inspections, speed up employer sanctions, increase labor law compliance by companies engaged in exports, and ensure that workers are compensated when companies close. Three times since then, Guatemala was given more time to implement the plan. But facing pressure from members of Congress, USTR agreed Guatemala still hasn’t met the terms of the plan or resolved concerns over the enforcement of Guatemala’s labor laws. Since 2008, when the AFL-CIO first made the complaint, UN Commission Against Impunity in Guatemala has documented 30 assassinations of union members in Guatemala, as well as numerous acts of attempted murder, torture, kidnappings, break-ins and death threats.

So on Sept. 18, 2014, the USTR asked that the arbitration panel go forward. If it decides that Guatemala is breaking its commitment to enforce its labor laws, it could fine Guatemala up to $15 million a year, or suspend its trade benefits under CAFTA. Last year, Guatemalan exports to the United States totaled $4.2 billion, mostly clothing and bananas.


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