May 28, 2015
Worker Rights Provisions in Free Trade Agreements (FTAs)
Overview
association/right to organize; right to organize/collective
bargaining; forced labor; minimum age; and equal
The issue of worker rights has become prominent in the
remuneration. For example, U.S. laws on prison labor may
negotiation of U.S. FTAs. Some stakeholders believe that
conflict with the forced labor convention, and equal pay for
worker rights provisions are necessary to protect U.S. labor
equal work statutes may conflict with the equal
from perceived unfair competition and to raise standards in
remuneration convention.
other countries. Others believe that worker rights are more
appropriately addressed at the International Labor

Organization (ILO) or through cooperative efforts and
capacity building on worker rights. Since 1988, Congress
The 1998 ILO Declaration Principles
has included worker rights as a principal negotiating
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Freedom of association and the effective recognition to the
objective in Trade Promotion Authority (TPA) (previously
right to col ective bargaining;
known as fast-track) legislation. The United States has been
in the forefront of using trade agreements to promote core
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Elimination of all forms of forced or compulsory labor;
internationally recognized worker rights. Worker rights
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Effective abolition of child labor and the minimum age of
provisions in FTAs have evolved significantly since the
work; and
North American Free Trade Agreement (NAFTA), moving
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Elimination of discrimination in respect of employment or
from side agreements to integral chapters within FTA texts,
occupation.
along with cooperation and enforcement provisions.

The International Labor Organization
Labor Provisions in U.S. FTAs
The ILO is the primary multilateral organization
responsible for promoting labor standards through
Worker rights provisions in U.S. trade agreements since
international conventions and principles. A specialized
NAFTA have evolved significantly. For example, they have
agency of the United Nations, it has a tripartite structure
evolved from limited enforceability of internationally
composed of representatives from government, business
recognized worker rights to expanded enforcement of core
and labor organizations. The ILO promotes labor rights
ILO principles, among other provisions. These include
through assessment of country standards and technical
provisions on labor cooperation and capacity building.
assistance, but it has no real enforcement authority. The
Internationally recognized worker rights were based on
World Trade Organization does not address worker rights.
language in the Generalized System of Preferences
authorization and largely track the 1998 Declaration
What are the ILO conventions?
(above), but also contain language on acceptable conditions
with respect to minimum wages, hours of work, and
The ILO has adopted 194 multilateral conventions or
occupational safety and health.
protocols, eight of which are considered to be core labor
standards. The 1998 Declaration on the Fundamental
The first U.S. bilateral FTAs with Israel (1985) and Canada
Principles and Rights at Work incorporates core labor
(1988) did not contain provisions on worker rights. The
principles, to be adhered to by all countries regardless of
worker rights provisions in subsequent U.S. FTAs reflect
whether they are signatories to the underlying eight ILO
the U.S. trade negotiating objectives of the respective trade
conventions from which the principles are drawn. The
promotion authority (TPA) statutes under which an
United States has endorsed these principles and has in
agreement is negotiated. Each grant of TPA has set out
recent FTAs incorporated them as enforceable provisions.
principal trade negotiating objectives on a wide range of
However, the United States has ratified only two of the
issues, including labor. These objectives have become more
relevant ILO conventions: elimination of forced labor and
comprehensive and numerous over time.
abolition of the worst forms of child labor.
Side Agreements. The North American Free Trade
Are any U.S. laws in conflict with ILO conventions?
Agreement (NAFTA) originally was not negotiated with
worker rights provisions—aside from preambular
The U.S. Tripartite Advisory Panel on International Labor
language—despite the elevation of labor as a principal
Standards of the President’s Committee on the ILO has
negotiating objective in the 1988 fast-track authority.
found that U.S. law is at least partially inconsistent with
However, President Clinton, fulfilling a campaign promise,
five of the eight core conventions of the ILO: freedom of
negotiated side agreements on worker rights to an already
completed NAFTA agreement. The North American
Agreement on Labor Cooperation contained 11 “guiding
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Worker Rights Provisions in Free Trade Agreements (FTAs)
principles” on worker rights in matters affecting trade,
The May 10 provisions are reflected in the “Bipartisan
technical assistance, and capacity building provisions, and a
Congressional Trade Priorities and Accountability Act of
separate dispute settlement arrangement. However, dispute
2015 (H.R. 1890/S. 995), which was introduced by Senators
settlement was available only for failure to enforce each
Hatch and Wyden and Representative Ryan on April 16,
country’s own laws with regard to three of these principles:
2015. TPA-2015 was reported from the Senate Finance
child labor, minimum wage, and occupational safety and
Committee on April 22, 2015, and from the House Ways
health.
and Means Committee on April 23. This TPA, as
incorporated into H.R. 1314 by substitute amendment,
Jordan. The U.S. FTA with Jordan (2001) contained labor
passed the Senate on May 22 by a vote of 62-37.
provisions that went beyond NAFTA and were incorporated
into the agreement itself. These provisions also became a
Other Country Approaches. Labor provisions appear in
template for future FTAs and the negotiating objectives on
the sustainable development chapters of European Union
labor in the 2002 TPA authorization. The provisions were
trade and economic partnership agreements, although they
fully enforceable under the dispute settlement provisions of
tend to be more consultative than enforceable. Canadian
the agreement. However, prior to congressional approval,
FTAs have used side-letters on labor cooperation, which do
the two parties exchanged letters committing each to
not provide for dispute settlement resolution. Among
resolve disputes in all chapters without recourse to dispute
ASEAN-FTAs countries, only its FTA with Australia
settlement.
contains worker rights provisions.
Trade Promotion Authority of 2002. Under the TPA of
Issues for Congress
2002, seven FTAs were negotiated by the George W. Bush
administration. Like Jordan, the provisions were
In considering future TPA legislation or future trade
incorporated into the agreement itself. These agreements
agreement negotiations, Congress may wish to examine the
also went beyond the Jordan FTA in terms of scope, but
use and application of worker rights provisions in FTAs.
they included only one enforceable provision: a party shall
This debate could include inquiry into:
not fail to effectively enforce its labor laws “in a manner
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affecting trade between the parties.” “Labor laws” were
The effectiveness of FTAs, as well as the ILO, as a
vehicle for improving worker rights in other countries;
defined as the U.S. list of internationally recognized worker
rights as contained in the GSP statute. Procedures for labor
• The relationship between the 1998 ILO Declaration and
disputes placed limits on monetary penalties, whereas those
related ILO conventions;
for commercial disputes did not. Suspension of benefits was
• The consideration of the May 10 agreement provisions
a last recourse option for both types of disputes. These
FTAs also included a number of other provisions that are
as a floor or ceiling in future U.S. trade negotiating
objectives;
not enforceable under the FTA’s dispute settlement
procedures. These included: (a) commitments not to
• The ability of the United States to achieve negotiating
derogate from one’s own labor laws as an encouragement
objectives on worker rights among widely divergent
for trade; and (b) extensive provisions for cooperation and
countries in regional FTAs, such as the TPP;
capacity building, and the creation of a labor affairs
•
council.
The effectiveness of the Labor Affairs Councils in FTAs
to provide technical assistance and trade capacity
building programs, and to resolve or prevent disputes
May 10, 2007 Agreement. Following the transfer of
control of the House after the 2006 elections, members of
without recourse to dispute settlement;
the majority sought changes in the labor, environmental,
• The role of U.S. business community in promoting U.S.
intellectual property rights, investment, and government
labor practices abroad; and/or
procurement provisions of the four pending FTAs at the
• The extent to which the dispute settlement provisions
time: Columbia, Panama, Peru, South Korea. A bipartisan
have been applied to worker rights issues.
agreement between the Bush administration and the House
leadership, building on the 2002 TPA negotiating
Mary Jane Bolle, mjbolle@crs.loc.gov, 7-7753
objectives, was reached on May 10, 2007. Concerning
Ian F. Fergusson, ifergusson@crs.loc.gov, 7-4997
worker rights, the agreement called for countries to:

• Adopt the same dispute settlement mechanisms and
penalties as other chapters in the FTA;
IF10046
• Maintain in their laws and practices the principles stated
in the ILO Declaration;
• Prohibit the diminution of labor standards to attract
trade and investment; and
• Limit prosecutorial and enforcement discretion, i.e.,
countries cannot defend the failure to enforce their labor
laws based on resource limitations or enforcement
priorities.
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