Updated September 18, 2020
Worker Rights Provisions in Free Trade Agreements (FTAs)
Overview
five of the core conventions: freedom of association; right
Worker rights are a prominent issue in U.S. FTA
to organize/collective bargaining; forced labor; minimum
negotiations. Some stakeholders believe worker rights
age; and equal remuneration. For example, U.S. laws on
provisions are necessary to protect U.S. workers from
prison labor may conflict with the forced labor convention.
perceived unfair competition and to raise labor standards
The 1998 ILO Declaration Principles
abroad. Others believe these rights are more appropriately
ï‚·
Freedom of association and the effective recognition to
addressed at the International Labor Organization (ILO) or
the right to col ective bargaining.
through cooperative efforts and capacity building. Since
ï‚·
Elimination of all forms of forced or compulsory labor.
1988, Congress has included worker rights as a principal
ï‚·
Effective abolition of child labor and minimum age of
negotiating objective in Trade Promotion Authority (TPA)
work.
legislation. The United States has been in the forefront of
ï‚·
Elimination of discrimination in respect of employment or
using FTAs to promote core internationally recognized
occupation.
worker rights. Labor provisions have evolved significantly
since the North American Free Trade Agreement (NAFTA),
Labor Provisions in U.S. FTAs
moving from side agreements to integral chapters within
Worker rights provisions in U.S. FTAs, first included in
FTA texts, with more provisions subject to enforcement.
NAFTA in 1994, have evolved significantly, from
The conclusion of NAFTA renegotiations resulted in the
requirements for parties to enforce their own labor laws,
U.S.-Mexico-Canada Agreement (USMCA), which
and to strive not to waive or derogate from its laws as an
replaces NAFTA and has a new labor chapter and
encouragement to trade, to commitments to adopt, maintain,
enforcement mechanism. USMCA entered into force in July
and enforce laws that incorporate core ILO principles.
2020.
Other provisions address labor cooperation and capacity
International Labor Organization
building. “Internationally recognized worker rights” were
based on language in the U.S. Generalized System of
Most FTAs with provisions on worker rights refer to
Preferences (GSP) statute and largely track the ILO
commitments made in the ILO. The ILO is the primary
Declaration, but also refer to “acceptable conditions”
multilateral organization responsible for promoting labor
regarding minimum wages, hours of work, and
standards through international conventions and principles.
occupational safety and health. Recent U.S. FTAs reflect
A specialized agency of the United Nations, the ILO is
the negotiating objectives under TPA statutes. These
composed of representatives from government, business
objectives have become more comprehensive over time.
and labor organizations. It promotes labor rights through
assessment of country standards and technical assistance,
NAFTA. The original NAFTA did not include labor
but has no real enforcement authority. The World Trade
provisions, leading President Clinton to negotiate a side
Organization (WTO) does not address worker rights, as
agreement, called the North American Agreement on Labor
members were unable to reach consensus on the issue.
Cooperation. It contained 11 “guiding principles” on
worker rights in matters affecting trade, technical assistance
What are the ILO conventions?
and capacity building provisions, and a separate dispute
The ILO has adopted 194 multilateral conventions or
settlement arrangement, along with a labor cooperation
protocols; eight are considered to be “core labor standards.”
mechanism. Full dispute procedures applied to failure to
The 1998 Declaration on the Fundamental Principles and
enforce a country’s laws regarding: child labor, minimum
Rights at Work incorporates core principles from these eight
wage, and occupational safety and health. Other issues,
conventions, to be adhered to by all countries whether or
such as freedom of association and the right to organize
not they are signatories to the underlying conventions. The
were limited to ministerial consultations, which resulted in
United States has endorsed these principles, incorporating
some bilateral and trilateral cooperation.
them in recent FTAs as enforceable provisions. It has
Jordan. The U.S.-Jordan FTA (2001) contains labor
ratified only two of the core ILO conventions: abolition of
provisions that were incorporated into the agreement itself.
forced labor, and prohibition and elimination of the worst
These provisions also became a template for future FTAs
forms of child labor. As a result, U.S. FTAs do not include
and negotiating objectives in the 2002 TPA authorization.
commitments to enforce the conventions themselves.
While the provisions are enforceable, both countries
Are any U.S. laws in conflict with ILO conventions?
committed to resolve disputes outside of dispute settlement.
The U.S. Tripartite Advisory Panel on International Labor
Trade Promotion Authority of 2002. Seven U.S. FTAs
Standards of the President’s Committee on the ILO has
were negotiated under TPA-2002. These agreements went
found that U.S. law is at least partially inconsistent with
beyond the scope of the Jordan FTA, but included one
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Worker Rights Provisions in Free Trade Agreements (FTAs)
enforceable labor provision: a party shall not fail to
congressional consideration of the U.S.-Colombia FTA.
effectively enforce its labor laws “in a manner affecting
USMCA commits Mexico to pass labor reforms related to
trade.” “Labor laws” were defined as worker rights as in the
collective bargaining that had been underway since 2017.
GSP statute. Dispute procedures placed limits on monetary
Mexico passed the legislation in May 2019 and is in the
penalties, unlike those for commercial disputes. The FTAs
implementation phase. In addition, separate from the labor
also included: commitments not to derogate from labor laws
chapter, the auto rules of origin have certain wage
to encourage trade; provisions for cooperation and capacity
requirements for the first time in an FTA.
building; and creation of a labor affairs council.
Some stakeholders and Members of Congress also pushed
Figure 1. Evolution of Labor Commitments
strongly for strengthening labor enforcement mechanisms.
A new rapid-response mechanism in USMCA provides for
an independent panel investigation of covered facilities if
suspected of denying workers the right of free association
and collective bargaining. Other notable changes to dispute
settlement procedures include preventing a party from
blocking the formation of a panel, and presuming that a
failure to comply with the main labor commitments is “in a
manner affecting trade or investment,” unless a party
demonstrates otherwise. For more detail, see CRS In Focus
IF11308, USMCA: Labor Provisions.
Labor Disputes under U.S. FTAs
In coordination with USTR, the Department of Labor
(DOL) is responsible for reviewing complaints on alleged

violations of enforceable labor commitments in U.S. FTAs.
Source: CRS.
In the past decade, the DOL has issued reviews for seven
complaints. One, involving Guatemala, proceeded past
TPA-2015. In effect through July 1, 2021, TPA-2015
consultations to formal dispute settlement. In December
enhanced the negotiating objectives on labor, with guidance
2017, an arbitral panel ruled against the United States. It
from a May 2007 bipartisan agreement, which laid out new
found while Guatemala had failed to effectively enforce
congressional objectives for FTAs. TPA-2015 called for:
certain labor laws, the evidence did not prove it was both
ï‚· including the same dispute settlement mechanisms and
“sustained or recurring” and “in a manner affecting trade.”
penalties for labor as for other FTA chapters;
U.S. stakeholders have contested the outcome. Other
ï‚· requiring the maintenance in laws and practice of
concerns include procedural delays in processing
principles stated in the ILO Declaration;
complaints and compliance issues more broadly. The AFL-
ï‚· prohibiting the diminution of labor standards to attract
CIO has stated plans to bring its first complaint under
trade and investment; and
USMCA rapid-response mechanism in September. For
ï‚· limiting prosecutorial and enforcement discretion, as
more information, see CRS In Focus IF10972, Labor
grounds for defending a failure to enforce labor laws.
Enforcement Issues in U.S. FTAs.
U.S.-Mexico-Canada Agreement (USMCA). USMCA
Issues for Congress
includes several new features on labor, in addition to core
In considering future TPA legislation (the current
provisions from TPA. Some view USMCA as a possible
reauthorization expires in July 2021) or trade negotiations,
template for future U.S. FTAs. Provisions include:
Congress may wish to examine the application of worker
 “adopt and maintain” statutes and regulations governing
rights provisions in FTAs. This debate could include:
acceptable conditions of work;
ï‚· The effectiveness of FTAs as a vehicle for improving
ï‚· extension of the principle of nonderogation of rights to
worker rights and labor standards in other countries;
export processing zones (EPZs);
ï‚· The extent to which FTA partners are complying with
ï‚· prohibiting imports produced by forced labor;
labor obligations and whether dispute settlement
ï‚· commitments on violence against workers, migrant
provisions have been applied effectively;
worker protections, and discrimination in the workplace;
ï‚· Whether USMCA labor provisions serve as a new
 establishment of a “cooperative labor dialogue,” as an
template for future U.S. FTAs;
alternative to formal labor consultation.
ï‚· The effectiveness of FTAs in providing technical
assistance and trade capacity building; and
Throughout the negotiations, there were calls by some
ï‚· The role of businesses in promoting U.S. labor practices
Members of Congress for additional obligations for Mexico
abroad and conducting supply chain due diligence.
to address concerns over worker rights protections. Some
advocated for a specific labor plan for Mexico, such as the
Cathleen D. Cimino-Isaacs, Analyst in International Trade
Obama Administration’s Colombia labor action plan in
and Finance
which Colombia committed to specific actions prior to
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Worker Rights Provisions in Free Trade Agreements (FTAs)

IF10046
M. Angeles Villarreal, Specialist in International Trade
and Finance


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https://crsreports.congress.gov | IF10046 · VERSION 19 · UPDATED

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