U.S. Trade Representative Ron Kirk is affirming that the U.S. is requesting a panel to settle the issue that Guatemala has failed to protect workers’ rights as it is required to do under a free-trade agreement.
The one year old issue involved actions take by Guatemala that violated the Dominican Republic-Central American Free Trade Agreement (CAFTA-DR). The panel if it finds that Guatemala indeed failed to protect worker’s rights could face millions in fines. The Obama administration is trying to move past this issue so that it can obtain approval for three other free trade pacts that are years delayed.
The free trade pacts with Colombia, Panama and South Korea are due to be reviewed once again by Congress later this year. Hence the administration wants to show that it enforces violations of free-trade agreements with its partners.
Guatemala is alleged to have denied certain workers their right to organize and collectively bargain back in 2008. In 2010 the U.S. started formal discussions with Guatemala on the matter but was not able to come to any conclusion on the matter.
Labor Secretary Hilda Solis issued the following statement on the matter:
“I applaud U.S. Trade Representative Ron Kirk’s decision today to request the establishment of an arbitral panel under the Dominican Republic-Central America-United States Free Trade Agreement in a dispute regarding the government of Guatemala’s failure to effectively enforce its labor laws.
“This unprecedented step demonstrates the Obama administration’s determination to enforce the labor obligations that form an integral part of the United States’ free trade agreements. This is the first labor case brought to dispute settlement by the United States under a free trade agreement. We are committed to ensuring that U.S. businesses and workers compete on a level playing field.
“Guatemala’s persistent failure to address the systemic problems with its labor law enforcement has left the United States with no choice other than to pursue this enforcement action.”