Worker Rights Provisions and U.S. Trade Policy

Worker Rights Provisions and U.S. Trade Policy

Worker Rights Provisions and U.S. Trade Policy July 16, 2021
Worker rights provisions are a prominent and often contentious issue in debates over
U.S. trade negotiations, agreements and programs. Congress has input into and oversight Cathleen D. Cimino-Isaacs
over the design and implementation of U.S. trade agreements and policies, and interest
Analyst in International
in monitoring their impact on U.S. industries and workers. Broadly, Congress also has
Trade and Finance
an interest in the U.S. role in setting labor standards and promoting fair competition in

the global trading system. Multilateral trade rules under the World Trade Organization

(WTO) do not cover labor issues, which has in part limited global alignment and
enforcement of trade-related labor issues, and spurred unilateral, bilateral and regional approaches within trade
policies. WTO members deferred to the International Labor Organization (ILO) as the competent body to deal
with core labor standards, and trade agreements with labor provisions typical y refer to ILO obligations.
Various U.S. trade statutes address the treatment of worker rights and labor standards. Section 307 of the Tariff
Act of 1930, as amended (19 U.S.C. §1307) prohibits U.S. imports of products mined, produced, or manufactured
wholly or in part by forced labor; in 2015, Congress strengthened the prohibition by removing a broad exception.
In recent years, the U.S. Customs and Border Protection (CBP) has increasingly taken action under Section 307 to
block U.S. imports produced by forced labor. Since 1984, Congress has included respect for international y
recognized worker rights as part of eligibility criteria for developing countries to qualify for duty-free benefits
under unilateral trade preferences programs, including the Generalized System of Preferences (GSP). Following
eligibility reviews, the United States has rescinded unilateral trade preferences of some beneficiary developing
countries over worker rights criteria.
Since 1988, Congress has also included worker rights as a U.S. principal trade negotiating objective within trade
promotion authority (TPA) legislation, which has evolved significantly with subsequent reauthorizations—the last
TPA (P.L. 114-26) expired on July 1, 2021. The issue became elevated within reciprocal trade agreement
negotiations with the pursuit of the 1994 North American Free Trade Agreement (NAFTA)—the first U.S. trade
agreement with a developing country (Mexico). U.S. administrations have been at the forefront international y of
using free trade agreements (FTAs) to promote core worker rights. Labor provisions have evolved significantly
since NAFTA, moving from a side agreement to integral chapters within U.S. FTAs, with additional provisions
subject to enforcement. The most recent U.S. FTA, the 2020 U.S.-Mexico-Canada Agreement (USMCA) replaced
NAFTA and made several changes to recent U.S. practice. Like several past FTAs, worker rights and enforcement
issues were sticking points for some Members of Congress, and USMCA implementing legislation (P.L. 116-113)
dedicated resources and enhanced interagency cooperation toward these issues. Several labor disputes initiated
under USMCA are ongoing. Alongside trade agreements, trade capacity building and technical assistance for
developing countries have also expanded as mechanisms for improving labor standards and compliance with
obligations.
Some U.S. stakeholders and labor rights advocates view worker rights provisions and effective enforcement as
important to strengthening worker rights abroad, preventing a potential “race to the bottom” in lowering
standards, and protecting workers from perceived unfair competition. Developing countries and other
stakeholders have raised concerns that advanced economies may promote labor standards as a form of disguised
trade protectionism to undermine other countries’ comparative advantage. Some policymakers and experts
contend that FTAs and trade liberalization support economic development and over time raise labor standards and
wages in lower income countries. In this view, the promotion of global labor standards with trade liberalization
can encourage the spread of the benefits of globalization, discourage the worst labor abuses, and increase support
for trade agreements. Others question whether trade agreements are an appropriate and effective vehicle for
addressing labor issues, and view expanded labor clauses and trade enforcement as potential y infringing national
sovereignty. How to ensure effective enforcement of labor provisions has become a perennial concern for some
stakeholders in the debate.
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Worker Rights Provisions and U.S. Trade Policy

“Putting workers at the center” is a priority of the Biden Administration’s trade policy. The Administration
pledged to review past trade policies for impacts on workers and to enforce labor obligations under U.S. trade
agreements. It also emphasized using the full range of trade tools to ensure products of forced labor are not
imported, and to chal enge other unfair labor practices.
This report provides background and analysis on key U.S. trade policies addressing worker rights abroad. It
contextualizes the U.S. approach with key debates and comparison with global approac hes. Several issues may be
of interest to Congress, including the role of U.S. trade agreements and programs as vehicles for improving labor
rights; the role of multilateral institutions; compliance with labor commitments and approaches to enforcement;
and debates over capacity building efforts.
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Contents
Introduction ................................................................................................................... 1
Overview: Trade Rules and Labor Commitments ................................................................. 2
Lack of Multilateral Rules in the World Trade Organization ............................................. 2
Role of the International Labor Organization (ILO) ........................................................ 6
ILO Core Labor Standards and Principles ................................................................ 7
Supervisory and Enforcement Measures................................................................... 8
ILO and FTA Provisions ........................................................................................ 9
United States and ILO Fundamental Conventions.................................................... 10
Global Trends in Labor Provisions in Trade Agreements ................................................ 12
Debate over Role and Impact of Labor Provisions ........................................................ 13
Labor Provisions in Selected U.S. Trade Policy Tools ......................................................... 15
Section 307 of Tariff Act of 1930 and Forced Labor ...................................................... 15
Eligibility Criteria in U.S. Trade Preference Programs ................................................... 18
Congressional Requirements in Trade Promotion Authority............................................ 22
Key U.S. FTA Commitments ..................................................................................... 24
Innovations in the U.S.-Mexico-Canada Agreement (USMCA) ................................. 26
Trade Capacity Building ........................................................................................... 28
Biden Administration Trade Policy Priorities ..................................................................... 30
Enforcement Mechanisms and Labor Disputes................................................................... 31
U.S. Process for FTA Labor Complaints ...................................................................... 32
Outcomes of U.S. FTA Disputes ................................................................................ 33
Ongoing USMCA Labor Disputes .............................................................................. 34
Issues for Congress ....................................................................................................... 35
U.S. Trade Agreements and Programs as Vehicles for Improving Labor Rights ............ 35
Multilateral Trade Rules at the WTO and the Role of the ILO ................................... 37
Trading Partner Compliance and U.S. Approaches to Enforcement............................. 38
Labor-Related Trade Capacity Building and Interagency Coordination ....................... 39

Figures
Figure 1. ILO Fundamental Conventions Ratified by U.S. FTA Partners ................................ 10
Figure 2. Countries with Production by Forced Labor and/or Forced Child Labor ................... 16
Figure 3. Trade-Related Labor Obligations by Implementing Agency, FY2014-FY2019........... 29
Figure 4. Labor Submissions under NAALC, 1994-2020..................................................... 33

Tables
Table 1. Recent GSP Eligibility Reviews Involving Worker Rights ....................................... 20
Table 2. TCB Assistance, Trade-Related Labor Activities .................................................... 29

Table A-1. U.S. Submissions under Labor Chapters of U.S. FTAs ......................................... 41

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Appendixes
Appendix A. Past U.S. Submissions Under Labor Chapters of U.S. FTAs .............................. 41

Contacts
Author Information ....................................................................................................... 44

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Worker Rights Provisions and U.S. Trade Policy

Introduction
Worker rights provisions are a prominent and often contentious issue in debates over U.S. trade
policy. Congress has input into and oversight over the design and implementation of U.S. trade
agreements and policies, and interest in monitoring their impact on U.S. industries and workers.
Broadly, Congress also has an interest in the U.S. role in enhancing core worker rights global y
and promoting fair competition in the global trading system. Some Members may also see worker
rights provisions as a means of promoting human rights in U.S. foreign policy. Multilateral trade
rules under the World Trade Organization (WTO) do not cover specific obligations on worker
rights, due to differences among members regarding the best forum for addressing them, among
other issues. This has in part limited global alignment and enforcement of trade-related labor
issues, and spurred unilateral, bilateral, and regional approaches within trade policies.
“Putting workers at the center” is a priority of the Biden Administration’s trade policy.1 The
Administration pledged to review past trade policies to assess their impacts on workers, and to
fully enforce labor obligations under U.S. trade agreements. It aims to use the full range of trade
tools, including domestic laws, to ensure products made by forced labor are not imported, and to
chal enge other unfair labor practices.
Various U.S. trade statutes address worker rights and labor standards, and have evolved over time.
Section 307 of the Tariff Act of 1930, as amended (19 U.S.C. §1307), prohibits U.S. imports of
products of forced labor.2 Since 1984, Congress has included respect for international y
recognized worker rights as part of the eligibility criteria for developing countries to qualify for
duty-free benefits under unilateral trade preferences programs, including the Generalized System
of Preferences (GSP). Since 1988, Congress has also included worker rights as a principal trade
negotiating objective within trade promotion authority (TPA) legislation (previously known as
“fast track” authority), which has evolved significantly with subsequent reauthorizations—the last
TPA (P.L. 114-26) expired on July 1, 2021. The issue became elevated and more contentious
within reciprocal trade agreement negotiations during the pursuit of the 1994 North American
Free Trade Agreement (NAFTA)—the first U.S. FTA with a developing country (Mexico).
Notably, NAFTA was the first of any FTA, both in the United States and global y, to address labor
issues. Alongside trade agreements and programs, trade capacity building and technical assistance
for developing countries have also expanded as mechanisms for promoting worker rights.
U.S. administrations have been at the forefront international y of using trade agreements to
promote core worker rights, though the adequacy of enforcement has been a longstanding point of
contention. Labor provisions have evolved significantly since NAFTA, and have moved from
being a side agreement to comprising integral chapters within subsequent U.S. FTA texts, with
additional provisions subject to enforcement. The most recent U.S. FTA, the 2020 U.S.-Mexico-
Canada Agreement (USMCA) updated NAFTA and made several changes to past U.S. FTA
practice. As in several past U.S. FTAs, worker rights and enforcement issues were sticking points
for some Members of Congress during congressional approval of USMCA, and implementing
legislation (P.L. 116-113) dedicated resources and enhanced interagency cooperation toward these
issues. The Office of the U.S. Trade Representative (USTR) committed to pursuing labor dispute
cases, and in May 2021, self-initiated its first USMCA labor complaint. Both U.S. and Mexican
labor groups have also already filed their own cases. Key issues for Congress in oversight of

1 UST R, 2021 Trade Policy Agenda and 2020 Annual Report, March 2021.
2 In 2015, Congress strengthened the prohibition by removing a broad exception.
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USMCA implementation include how the new “rapid response” dispute mechanism wil work,
and whether USMCA labor obligations should be the template for future U.S. FTAs.
Some U.S. stakeholders and labor rights advocates broadly view worker rights provisions and
effective enforcement as important to strengthening worker rights abroad, arguing that they help
prevent a potential “race to the bottom” in lowering labor standards to gain advantages and may
protect workers from perceived unfair competition. Developing countries and other stakeholders
have raised concerns that advanced economies may promote labor standards as disguised trade
protectionism to undermine other countries’ comparative advantages of abundant labor and lower
labor costs, or to impede national sovereignty. Some policymakers and experts contend that FTAs
and trade liberalization support economic development and, over time, help raise labor standards
and wages in lower income countries. In this vein, some experts view that the promotion of global
labor standards with trade liberalization can encourage the spread of the benefits of globalization,
discourage the worst labor abuses, and increase public support for trade agreements.3 At the same
time, others question whether FTAs are an appropriate and effective vehicle for addressing labor
issues.
How to ensure effective enforcement of labor provisions has become a perennial concern. Some
Members and stakeholders have raised concerns over U.S. trading partners’ compliance with
commitments and view U.S. enforcement of FTA provisions as fal ing short. They cal for more
monitoring and oversight of labor practices. Some foreign governments and labor groups also
have expressed concerns regarding U.S. practices and lack of adherence to labor commitments,
such as Mexican concerns over U.S. protections for migrant workers. Experts stress cooperative
efforts and trade capacity building as critical factors to improving standards global y and
incentivizing compliance, and many general y view trade sanctions as a measure of last resort.4
This report provides background and analysis on the evolution of key U.S. trade policies with
labor provisions, with a focus on trade programs, negotiations, and agreements. It contextualizes
the U.S. approach with key debates and comparison with global approaches. Several issues of
interest to Congress may include the role of trade policy tools as vehicles for improving labor
rights global y; the role of multilateral institutions; trading partner compliance with labor
commitments and approaches to enforcement; and debates over capacity building efforts. Issues
related to the distributional impact of globalization, trade liberalization, and trade policies on U.S.
and foreign workers and on the labor market are beyond the scope of this report.
Overview: Trade Rules and Labor Commitments
Lack of Multilateral Rules in the World Trade Organization
Labor issues are not subject to multilateral trade rules under the WTO, due to past contentious
debate and a lack of consensus among members over whether and how the global trade agenda
should address trade and labor linkages.5 The issue surfaced repeatedly in debates during both the
drafting of the 1947 General Agreement on Tariffs and Trade (GATT) and establishment of the

3 Kimberly Ann Elliott, “Labor Standards,” in Preferential Trade Agreement Policies for Development: A Handbook,
ed. Jean-Pierre Chauffour and Jean-Christophe Maur (Washington, DC: T he World Bank, 2011), p. 428.
4 E.g., Sandra Polaski, “Protecting Labor Rights through T rade Agreements: An Analytical Guide,” Journal of
International Law and Policy, vol. 10, no. 13 (July 2004): 13-25.
5 For the history of the debate over linking trade and international competitiveness to labor standards, see Virginia A.
Leary, “ Workers’ Rights and International T rade: T he Social Clause, (GAT T , ILO, NAFT A, U.S. Laws),” in Fair
Trade and Harm onization, ed. Jagdish Bhagwati and Robert E. Hudec (Cambridge, MA: MIT Press, 1996).
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WTO in 1995, which encompassed and succeeded the GATT. Proposals to consider a “social
clause” linking trade concessions to the observation of worker rights, or to create a working group
to study the issue, failed to garner majority support. WTO members ultimately confined treatment
of the issue to a broad statement, deferring to the International Labor Organization (ILO) as the
competent body to deal with core labor standards (see below).
Discussions of a social clause in the context of a multilateral trade agreement date back to the
1948 Havana Charter of the proposed International Trade Organization (ITO)—signed but never
ratified—which included a section on labor standards recognizing that “unfair labour conditions,
particularly in production for export, create difficulties for international trade.”6 The proposed
ITO provided the premise for later debates over reforms to the GATT, which parties conceived
more narrowly to focus initial y on tariff liberalization.7 The United States sought to introduce a
labor clause in subsequent GATT negotiations, in particular during the Tokyo Round (1973-1979)
of multilateral trade talks, though ultimately abandoned such efforts.8 U.S. trade officials
proposed work programs to examine “minimum international labor standards,” and how
“international y recognized” standards relate to trade and GATT objectives.
While the GATT does not explicitly address labor issues, Article XX, its general exceptions
article, includes one provision that permits restrictions on trade in goods made from prison labor
(Article XX(e)).9 Advocates of incorporating a broader trade-related labor provision in the GATT
view certain GATT articles as potential y justifying trade measures based on social policies and
violations of core labor rights, or offering avenues for expanding their scope through explicit
language on such rights.10 GATT Article XX, for example, al ows member governments to adopt
certain trade restrictions necessary to protect “public morals” and “human life or health.” Experts
have also cited provisions on antidumping (Article VI), subsidies (Article XVI), and safeguards
(Article XIX), as wel as the nonviolation nullification or impairment clause (Article XXIII), as
potential y applicable tools that could be adapted to provide for labor enforcement. For example,
some analysts contend worker rights suppression could in effect constitute “social dumping” or
subsidization and warrant coverage.11 Experts have debated the practical and legal feasibility and

6 IT O’s Havana Charter Pt. II, Article VII: “Members recognize that measure related to employment must take fully
into account the rights of workers under inter-governmental declarations, conventions and agreements. T hey recognize
that all countries have common interest in the achievement and maintenance of labour standards related to productivity,
and thus in the improvement of wages and working conditions as productivity may permit…unfair labour conditions,
particularly in production for export, creates difficulties in internat ional trade, and, accordingly each Member shall take
whatever action may be appropriate and feasible to eliminate such conditions within its territory.”
7 Legal scholars argue that attempts to incorporate labor standards into the GAT T /WT O were shaped by an evolving
understanding of what constitutes “fair labor standards,” with legal and institutional implications for how and whether
labor provisions could be incorporated into trade rules today. Debates over the GAT T were driven by the conception of
labor standards largely based on wages, i.e., concerns over the impact of low wages, as perpetuated by lower labor
standards, on exports to other members; there was minimal discussion of social concerns that have become central to
modern human rights concepts of labor rights. See Elissa Alben, “ GAT T and the Fair Wage: A Historical Perspective
on the Labor-T rade Link,” Colum bia Law Review, vol. 101, no. 6 (October 2001): 1410 -1447.
8 Peter Watson, “The Framework for the New T rade Agenda,” Law and Policy in International Business, vol. 25
(1994): 1237-1253.
9 See https://www.wto.org/english/docs_e/legal_e/gatt47_02_e.htm#articleXX.
10 For an overview, see Kimberly Ann Elliot t, Developing a More Inclusive US Trade Policy at Home and Abroad ,
CGD Policy Paper 146, Center for Global Development, June 2019.
11 Dani Rodrik, Towards a More Inclusive Globalization: An Anti-Social Dumping Scheme, Economists for Inclusive
Prosperity, December 2018; Gregory Shaffer, “ Retooling T rade Agreements for Social Inclusion ,” University of Illinois
Law Review, vol. 2019, no. 1 (2019): 1-44.
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shortcomings of various approaches.12 While some advocate for addressing worker rights issues,
others maintain that incorporating enforceable labor standards in the WTO would be misguided
and risks overloading the WTO with issues it was not designed to deal with.13
The creation of the WTO following the Uruguay Round (1986-1994) renewed debate over labor
standards. At the WTO’s first Ministerial Conference in Singapore in 1996, the issue was the
most controversial in the proposed agenda.14 Norway and the United States were the primary
proponents and advocated for a work program to reach understanding among members on “how
to reinforce the mutual y supporting nature of increased trade and improving labor standards.”15
Congress expressed interest in such a working group in the 1994 Uruguay Round Agreements Act
(P.L. 103-465)—the statutory basis for U.S. WTO membership (see Text Box). The proposals,
however, gained little traction. Developing and some developed countries, such as Australia and
the United Kingdom (UK), viewed the WTO as an inappropriate forum to address labor and
“non-trade” issues, and some members threatened to boycott the meeting over the proposals.
WTO and Labor: Congressional Directives in Uruguay Round Agreements Act
The 1994 Uruguay Round Agreements Act (P.L. 103-465) established congressional interest in exploring linkages
between trade and labor. Section 131 directs the President to seek the establishment in the WTO of “a working
party to examine the relationship of international y recognized worker rights … to the articles, objectives and
related instruments of the GATT 1947 and the WTO.” Objectives included:
1. explore the linkage between international trade and international y recognized worker rights, taking into
account differences in countries’ level of development;
2. examine the effects on international trade of the systematic denial of such rights;
3. consider ways to address such effects; and
4. develop methods to coordinate the work program of the working party with the ILO.
Developing country members feared such rules would undermine economic development or be
used by developed countries as disguised barriers to trade to protect labor-intensive, import-
competing industries.16 A more complex legal question in contention was the potential
relationship in linking ILO standards and WTO agreements, i.e., whether or how labor standards
could be applied in a way that was consistent with WTO rules.17 Due to these divisions, at the
1996 Singapore Ministerial, WTO members agreed to renew their commitment to observe

12 Ibid. Also see Simon Lester, “Responding to ‘Social Dumping’ with T ariffs,” International Economic Law and
Policy Blog, February 25, 2019, at https://ielp.worldtradelaw.net/2019/02/responding-to-social-dumping-with-
tariffs.html; Guillermo de la Dehesa, “ Are developing countries engaging in “ social dumping”? VoxEU, May 24, 2007,
at https://voxeu.org/article/social-dumping-misconceptions; and Alben, “ GAT T and the Fair Wage.”
13 See e.g., T .N. Srinivasan, Developing Countries and the Multilateral Trading System: From the GATT to the
Uruguay Round and the Future (New York: Routledge, 1998), pp. 71 -79; Keith Maskus, Should Core Labor Standards
be Im posed Through International Trade Policy? World Bank Policy Research Working Paper No. 1817, August 1997;
José Manuel Salazar-Xirinachs and Jorge Mario Martinez-Piva, “ Trade, Labour Standards and Global Governance: A
Perspective from the Americas,” in ed. Stefan Griller, International Economic Governance and Non-Economic
Concerns: New Challenges for the International Legal Order (Vienna/New York: Springer, 2003).
14 Craig VanGrasstek, The History and Future of the World Trade Organization (Geneva: WT O Publications, 2013), p.
380. T he Ministerial Conference is the WT O’s topmost decision-making body, and usually convenes every two years.
It is comprised of political representatives from each member, and can take decisions on all matters under any of the
WT O’s multilateral trade agreements.
15 Ibid, p. 378.
16 Ibid.
17 WT O, “ Labour standards: consensus, coherence and controversy,” at https://www.wto.org/english/thewto_e/
whatis_e/tif_e/bey5_e.htm.
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“international y recognized core labor standards,” while reaffirming the ILO as the competent
body to deal with labor issues and denouncing the “use of labor standards for protectionist
purposes” (see Text Box).18
WTO Singapore Ministerial Declaration, December 1996
“We renew our commitment to the observance of international y recognized core labour standards. The
International Labour Organization (ILO) is the competent body to set and deal with these standards, and we
affirm our support for its work in promoting them. We believe that economic growth and development fostered
by increased trade and further trade liberalization contribute to the promotion of these standards. We reject the
use of labour standards for protectionist purposes, and agree that the comparative advantage of countries,
particularly low-wage developing countries, must in no way be put in question. In this regard, we note that the
WTO and ILO Secretariats wil continue their existing col aboration.”
Subsequent efforts to elevate labor standards as part of the global trade agenda met similar
resistance. At the Seattle Ministerial Conference in 1999, a working group was set up to decide
whether the Ministerial declaration should create a formal working party within the WTO, or a
body operated jointly by international organizations, such as the ILO.19 U.S. trade officials
warned that lack of recognition of the link between trade and labor could damage credibility and
support for the global trading system.20 President Clinton’s remarks on the issue, in particular the
suggestion that trade sanctions could be used to enforce labor rights, created added controversy.21
Developing country members viewed U.S. insistence on raising the issue as counterproductive,
and efforts to compromise on other issues stal ed as WTO members promised to block consensus
necessary to adopt them.22 Then WTO Director-General Mike Moore decried the “bitterness and
divisiveness” of the trade and labor debate, and gave his view that “unacceptable working
conditions” must be met by expanding trade and not by imposing sanctions.23 Ultimately, efforts
failed with the collapse of the Seattle talks. In the subsequent 2001 Doha Round, members
reaffirmed the Singapore Declaration, taking no further action. To date, the WTO and ILO
secretariats primarily cooperate through collaborative studies.24

18 As one former ILO Deputy Director-General reflected on the outcome at Singapore, “It was far from clear whether
all of the WT O Ministers wanted to move the issue of the relationship between trade and labour standards to the ILO so
that something meaningful would happen. Some wanted to get rid of it, not only in the WT O but in the ILO as well.
T his had been the thrust of the unsuccessful proposal in 1994 for a Conference resolution banning further discussion on
the social clause in the ILO.” Kari T apiola, The Teeth of the ILO: The Impact of the 1998 ILO Declaration on
Fundam ental Principles and Rights at Work, International Labour Office, ILO, 2018, p. 29.
19 VanGrasstek, The History and Future of the World Trade Organization, pp. 390-391.
20 In 1999, then-UST R Charlene Barshefsky said, “T he WT O does not recognize the link between trade and labor….
T hat is intellectually indefensible, and over time, it will weaken public support for global trade.” Kimberly Ann Elliott
and Richard B. Freeman, Can Labor Standards Im prove Under Globalization? (Washington: Peterson Institute for
International Economics, 2003), p. 73.
21 Clyde Summers, “T he Battle in Seattle: Free T rade, Labor Rights, and Societal Values,” University of Pennsylvania
Journal of International Law, vol. 22 (Spring 2001), p. 61.
22 U.S. Government Accountability Office (GAO), World Trade Organization: Seattle Ministerial: Outcomes and
Lessons Learned, Statement of Susan S. Westin, Associate Director, February 10, 2000; Steven Greenhouse and Joseph
Kahn, “U.S. Effort to Add Labor Standards to Agenda Fails,” New York Times, December 3, 1999.
23 WT O, “Labour Issue is ‘False Debate’, Obscures Underlying Consensus, WT O Chief Mike Moore T ells Unions,”
Press release, November 28, 1999.
24 WT O, “ T he WTO and International Labour Organization,” at http://www.wto.org/english/thewto_e/coher_e/wto_ilo
_e.htm.
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Role of the International Labor Organization (ILO)
The ILO, established in 1919, is the multilateral organization with primary responsibility for
promoting international labor standards and “decent work” through conventions and principles.25
When founded, its raison d’être was to achieve social justice to advance global peace. A
specialized agency of the United Nations, the ILO has a tripartite structure composed of
representatives from governments, employers, and worker organizations from 187 member states,
including the United States.26 The Department of Labor’s Bureau of International Labor Affairs
(ILAB) represents the United States at the ILO, and U.S. government agencies often collaborate
with ILO programs and are a key source of funding for technical assistance.27
WTO discussions over a possible “social clause” and the Singapore declaration pressured the ILO
to contribute to the debate over linking labor standards and trade practices.28 As in the WTO,
discussions were marked by divergent views among ILO member states and stakeholders.29 A
central concern was that countries engaged in social and labor reforms should not end up
disadvantaged in international competition. Then ILO Director-General Michel Hansenne
reflected on the core issues at the heart of the debate:30
The crucial question is whether, given the voluntary acceptance of obligations arising from
its standards, the ILO can maintain the spirit of “emulation” towards social progress in
spite of the countervailing influence exerted by the globalization of the economy and the
growth of international competition. I am referring … to the issue of “social clauses”, or
the guarantees that a growing number of advocates wish to incorporate in international
trade agreements to ensure that the gradual liberalization of markets is accompanied by
improvements in conditions of work, or at least by the elimination of the most flagrant
abuses and forms of exploitation. Through the social clauses, either the access of exporting
countries to international markets is made conditional on compliance with certain basic
ILO standards, or - more concretely - a link is established between the lowering of barriers
to trade and compliance with certain labour and social protection standards.
A 1994 working party in the ILO Governing Body on the Social Dimensions of the Liberalization
of International Trade debated how the ILO should protect and promote core labor standards, but
ultimately avoided linking them explicitly with international trade. Among the most divisive
issues was the potential use of the WTO to enforce ILO commitments. While ILO procedures
provide for the possibility of stronger action against countries found not to meet ILO obligations,
in practice, the ILO has relied on peer and political pressure, rather than punitive measures. This
preference is based on the premise that the ILO “should rely on cooperation rather than coercion
in its efforts to promote social progress.”31 As one WTO scholar described a common criticism

25 For more on the Decent Work agenda, see https://www.ilo.org/global/topics/decent-work/lang—en/index.htm.
26 ILO, “ T he US: A Leading role in the ILO,” at https://www.ilo.org/washington/ilo-and-the-united-states/the-usa-
leading-role-in-the-ilo/lang—en/index.htm.
27 See “T rade Capacity Building.” T he United States is a member of the ILO Governing Body, which is the ILO’s
executive body. See ILO, The United States: ILO Cooperation, October 2019; Partner Classification: United States in
2020, ILO Development Cooperation Dashboard, at https://www.ilo.org/DevelopmentCooperationDashboard/
#a1hsnnd.
28 Leary, “Workers’ Rights and International Trade.”
29 For discussion, see T apiola, The Teeth of the ILO, pp. 11-37.
30 Defending Values, Promoting Change: Social Justice in a Global Economy: An ILO Agenda, Report of the Director-
General (Part 1), International Labour Conference, 81st session, Geneva, 1994, p. 57. Hansenne outlined concrete
options for dealing with trade and labor standards, which members ultimately did not take up, see pp. 56 -63.
31 Ibid.
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that emerged, “In the ILO, there are labour standards without ‘teeth,’ while the WTO has teeth but
almost no standards related to labour.”32 Some contest this view, however, and maintain that the
ILO’s less confrontational approach may be more pragmatic and conducive to cooperation.33
ILO Core Labor Standards and Principles
Trade agreements with labor provisions typical y require adherence or otherwise refer to ILO
obligations and instruments. The ILO has adopted 190 conventions and six protocols. Of these
instruments, eight “fundamental conventions” relate to core labor standards that are considered
“universal” and applicable to al member states, regardless of level of economic development (see
Figure 1). The 1998 Declaration on the Fundamental Principles and Rights at Work and its
follow-up incorporate these core principles and rights, in which countries commit “to respect, to
promote and to realize” whether or not signatories to the underlying fundamental conventions
(see Text Box).34 Reflecting concurrent debates at the WTO, the 1998 Declaration also stresses
language similar to the WTO Singapore Declaration—e.g., that labor standards “should not be
used for protectionist trade purposes” and “comparative advantage of any country should in no
way be cal ed into question by this Declaration and its follow-up.”
Underlying the ILO’s approach to advancing labor standards and principles global y is the
recognition that differences in labor conditions and levels of protection are linked to differences
in levels of development. As a former ILO Director-General reflected, the ILO’s aim is not “to
achieve uniformity in the level of social protection in order to ensure a proper international
competition,” but the “universal recognition of certain basic rights” and “respect of certain
common rules of the game.”35 More pointedly, “Al the partners in the multilateral trade system
must guarantee certain fundamental rights, without which workers cannot be assured of receiving
their fair share of the fruits of economic progress generated by the liberalization of trade.”36
ILO Declaration on Fundamental Principles and Rights at Work:
Concepts and Meaning
The 1998 ILO Declaration declares that al members, even if they have not ratified the eight
fundamental conventions, have an obligation to promote and realize the principles concerning the fundamental
rights which are the subject of those conventions, including:
(a) Freedom of association and the effective recognition of the right to collec tive bargaining:

Al workers and employers have the right to freely form and join groups that support and advance their
occupational interests.

Freedom of association means workers can set up, join and run their own organizations without interference
from the state or one another. This includes the right to freely run their own activities, e.g., independently
determine how best to promote and defend their interests, including recourse to strike.

Col ective bargaining is a process through which employers and trade unions or representatives of workers
discuss and negotiate their relations and the terms and conditions of work.

32 VanGrasstek, The History and Future of the World Trade Organization, p. 169. T he idea of “juxtapose[ing]
international right law’s normative content with trade law’s economic and enforcement entitlements or ‘teeth’” is not
unique to labor standards, but has been central in discussions of human rights and trade more broadly. See Desirée
LeClercq, “ T he Disparate T reatment of Rights in U.S. T rade,” Fordham Law Review, forthcoming March 2021.
33 Salazar-Xirinachs and Martinez-Piva, “Trade, Labour Standards and Global Governance,” pp. 332 -335.
34 ILO, “About the Declaration,” at https://www.ilo.org/declaration/thedeclaration/lang—en/index.htm.
35 Standard Setting and Globalization, Report of the Director-General, International Labour Conference, 85th Session,
Geneva, 1997.
36 Ibid.
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
To realize these rights in practice requires a legal basis that guarantees such rights are enforced, an enabling
institutional framework, and absence of discrimination against individuals exercising such rights.
(b) Elimination of all forms of forced or compulsory labor:

Forced labor occurs where work or service is extracted by the state or others with power to threaten
workers with severe deprivations, e.g., withholding wages, abuse, and restricting people’s movements.

Debt bondage and labor trafficking are practices where workers become dependent on an intermediary and
labors in slave-like conditions, possibly subject to confiscated identity papers and other intimidation.
(c) Effective abolition of child labor:

Children have rights to protection from economic exploitation and from dangerous work.

Effective abolition of child labor is based on ensuring children have the opportunity to develop physical y and
mental y to their ful potential by eliminating work that jeopardizes education and development.

To achieve abolition, a minimum age at which children can enter work should be enforced, in general not less
than the age of completing compulsory schooling or 15 years.

Certain work performed by children (i.e., under age 18) categorized as “worst forms of child labor" are to be
prohibited and eliminated as a matter of urgency, e.g., slavery in al its forms (trafficking, debt bondage, forced
military recruitment), prostitution and al forms of commercial sexual exploitation, and use of children in il icit
activities, such as drug trafficking.
(d) Elimination of discrimination in respect of employment and occupation:

Discrimination can occur on the basis of sex, age, race, skin color, social origin, religion, political opinion,
disability or HIV status. It denies opportunities and deprives societies of what workers could contribute.

Equality at work means al individuals are afforded opportunities to ful y develop knowledge, skil s and
competencies related to economic activities they wish to pursue.

Eliminating discrimination entails dismantling barriers to ensuring equal access to training, education, and
resource use and ownership. It also involves the conditions for setting up enterprises, and the policies related
to hiring, work conditions, pay and benefits, promotions and employment termination.
Source: ILO, Declaration Overview, May 2004.
Supervisory and Enforcement Measures
While there is scope for enforcement measures, historical y the ILO has encouraged compliance
with labor standards through its supervisory and technical assistance systems. At its core, the ILO
plays a “sunshine” monitoring function through a supervisory and reporting system to monitor the
application of ratified conventions. The 1998 Declaration Follow-up requires countries that have
not ratified conventions to report annual y on the status of the relevant rights and principles,
impediments to ratification, and areas requiring technical assistance. The ILO also reports on
global efforts toward implementing standards. In addition, through technical assistance (e.g.,
research, capacity building, and field-based projects) the ILO helps countries address problems in
developing and implementing legislation and undertaking other actions to meet their obligations.
ILO representation (Articles 24-25 of ILO Constitution) and complaint procedures (Article 26)
permit industrial associations of workers/employers and member states, respectively, to raise
concerns over a country’s al eged noncompliance with ratified conventions.37 There is a special
Committee within the ILO Governing Body with distinct procedures for addressing violations of
freedom of association rights.38 Upon receipt of a general complaint, the Governing Body may

37 T o date, there have been 35 Article 26 complaints, and 14 resulted in Commissions of Inquiry reports. T he
Committee on Freedom of Association has received more than 3,400 complaints, 44 involving the United States. T here
have been more than 250 Article 24 representations. See https://www.ilo.org/global/standards/applying-and-promoting-
international-labour-standards/lang—en/index.htm.
38 T he Committee may hear a complaint about a government’s violation of freedom of association regardless of
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establish a Commission of Inquiry, the ILO’s highest-level investigative procedure, which is
general y pursued when a country is accused of persistent and serious violations. If a country
refuses to meet a Commission’s recommendations, the ILO Governing Body can take action
under authority in Article 33 of the ILO Constitution, and recommend “action as it may deem
wise and expedient to secure compliance therewith,” including possibly punitive action.39 Such
authority has been rarely invoked, however—the ILO invoked Article 33 once in 2000 to compel
Burma to take action after it failed to implement recommendations of an investigation that found
“widespread and systematic” forced labor.40 Some observers have advocated for more effective
use of the ILO forum to pressure the Chinese government to address state-sponsored forced labor
in the Xinjiang Uyghur Autonomous Region (see “Section 307 of Tariff Act of 1930 and Forced
Labor”).41
ILO and FTA Provisions
Most FTAs with labor provisions refer to ILO commitments, general y through broad affirmations
of ILO obligations and political commitment to the 1998 Declaration, and/or reference to ILO
instruments to define the scope of certain labor provisions. According to the ILO, nearly three-
quarters of trade-related labor provisions refer to the ILO, with most legal y binding
commitments in respect of “core international y recognized labor standards.”42 With the growth in
trade agreements that refer to the ILO (see “United States and ILO Fundamental Conventions”
countries have increasingly sought ILO support to help meet FTA commitments.43
Some experts view expansion of such provisions as strengthening the potential enforcement of
labor standards; on the other hand, some view such a decentralized approach and lack of
uniformity in definitions of standards or their application as having potential to weaken ILO
attempts to develop a consistent approach.44 While a more uniform manner of referencing ILO
obligations in trade agreements could mitigate such concerns, the majority refer primarily to the
1998 Declaration, which some contend gives rise to legal uncertainty due to its broad scope.45
Some observers maintain that FTA language that refers to conventions provides for greater clarity
and concrete obligations.46

whether the government has ratified Convention No. 87.
39 Changes to the ILO Constitution in the 1940s removed explicit references to economic measures, in large part to
avoid discouraging least developed countries from joining the institution. This was also driven by the broader view that
weak labor standards were primarily driven by gaps in national enforcement, reinforcing the importance of
international action to develop capacit y. See Elliott and Freeman, Can Labor Standards Im prove Under Globalization?
p. 106. For discussion of the origin and debate over the ILO’s use (or disuse) of trade sanctions, see Steve Charnovitz,
The Lost History of the ILO’s Trade Sanctions, GWU Law School Public Law Research Paper No. 2019-74, 2019.
40 ILO, “ILO Governing Body opens the way for unprecedented action against forced labour in Myanmar,” Press
release, November 17, 2000.
41 For example, Andrew Samet,”Will the ILO Defend China’s Uyghurs?” The Diplomat, August 18, 2020, and Janice
Bellace and George Dragnich, “A Path for Business out of the China Forced Labor Dilemma,” The Hill, May 10, 2021.
42 ILO, Handbook on Assessment of Labour Provisions in Trade and Investment Arrangements, 2017, p. 5.
43 Ibid, p. 23.
44 Jordi Agustí-Panareda, Franz Christian Ebert , and Desirée LeClercq, “ILO Labor Standards and T rade Agreements:
A Case for Consistency,” Comparative Labor Law & Policy Journal, vol. 36 (2015), p. 348.
45 Ibid.
46 E.g., AFL-CIO, NAFTA at 20, March 2014, p. 19. Moreover, implementation of ratified conventions is subject to
ongoing ILO supervision. Agustí-Panareda, Ebert , and LeClercq, “ ILO Labor Standards and T rade Agreements.”
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In its most recent FTAs, the United States includes an enforceable commitment to maintain and
uphold the rights and principles of the ILO Declaration in domestic laws. U.S. FTAs do not
include commitments to enforce the fundamental conventions themselves, in large part because
the United States has ratified only two of the eight conventions: forced labor (No. 105), and worst
forms of child labor (No. 182) (see below).47 Most U.S. FTA partners have ratified al eight, with
some exceptions (Figure 1).
Figure 1. ILO Fundamental Conventions Ratified by U.S. FTA Partners

Source: Created by CRS. Data from World Bank, World Development Indicators database, at
https://databank.worldbank.org/, and ILO, “Ratifications of fundamental Conventions by country,” as of July 2021.
Note: The U.S.-Japan trade agreements cover limited tariff cuts and rules on digital trade.
United States and ILO Fundamental Conventions
While the United States arguably has achieved many labor standards, it has not ratified most ILO
conventions in large part due to inconsistencies between domestic legislation, including certain

47 ILO, “ Ratifications for United States of America,” at https://www.ilo.org/dyn/normlex/en/f?p=
1000:11200:0::NO:11200:P11200_COUNT RY_ID:102871.
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state laws, and the conventions. The President’s Committee on the ILO—established by
Executive Order in 1980, and chaired by the Secretary of Labor—declared “there is no intention
to change State law and practice by Federal action through ratification of ILO conventions.”48
In its 2007 assessment, the Committee’s U.S. Tripartite Advisory Panel on International Labor
Standards (TAPILS) asserted that five of the eight core conventions “directly conflict with U.S.
law and practice and would require significant and widespread changes to U.S. state and federal
law” if ratified.49 These include freedom of association (No. 87); right to organize/collective
bargaining (No. 98); forced labor (No. 29); minimum age for employment (No. 138); and equal
remuneration (No. 100). In particular, ratification of No. 87 and No. 98 would require “drastic
changes” to U.S. law.50 To take one example, the Panel determined that No. 29 on forced labor
cannot be ratified namely due to “the trend of states to subcontract the operation of prison
facilities to the private sector in the United States conflicted with the requirements … relating to
circumstances under which the private sector may profit from prison labor.”
In the view of U.S. government officials, “although an improved record ratification [is] an
important objective towards which to strive … in practice United States law [meets] or [exceeds],
in almost every case,” standards set out in the ILO conventions.51 However, some experts point to
what they perceive as lower levels of U.S. coverage and protection for workers in key respects
than required by ILO standards.52 Moreover, some observers, including some Members of
Congress, view the relatively low U.S. ratification of ILO conventions (14 out of 190), and
particularly the fundamental conventions (2 out of 8), as potential y disadvantaging the United
States through “reputational cost” within the ILO, and undermining U.S. credibility in its efforts
to use trade policy to promote respect for core labor rights.53 In particular, some observers view
the United States as wel positioned to ratify convention No. 111 concerning discrimination in
employment.54 In practice, limited ratification also general y prevents the United States from
raising ILO complaints against other countries for failure to observe ratified conventions. At the
same time, some observers question the efficacy of ILO conventions and point to limitations of
ratification as an indicator of higher labor standards, given evidence that despite ratification, there
can be lack of implementation and adherence by some countries. Some empirical studies suggest

48 U.S. Council for International Business, U.S. Ratification of ILO Core Labor Standards, April 2007.
49 Ibid.
50 President Harry S. T ruman sent convention No. 87 to the Senate for advice and consent in 1949. Steve Charnovitz,
“T he ILO Convention on Freedom of Association and Its Future in the United States,” American Journal of
International Law, vol. 102, Issue 1 (2008): 90-107.
51 Quoted in Alston, “Labor Rights Provisions in U.S. T rade Law,” p. 31.
52 David Weissbrodt and Matthew Mason, “Compliance of the United States with International Labor Law,” Minnesota
Law Review, vol. 84 (2014): 1842-1878.
53 E.g., former Senator Orrin Hatch reflected in 1985: “our dismal nonratification record undercuts our credibility at the
ILO.” Ibid. One legal scholar contended: “the United States would be acting on much stronger and certa inly more
persuasive grounds if it were itself a party to the relevant international conventions and if those were the standards
being applied. Instead, what emerges is a major discrepancy between the United States’ refusal to submit itself to
multilateral accountability (through the ILO), and its preparedness to subject others to a form of accountability in which
the United States acts as the sole legislator, judge, jury, and enforcement author.” Philip Alston, “Labor Rights
Provisions in U.S. T rade Law: ‘Aggressive Uniliateralism?’” Human Rights Quarterly, vol. 15 (1993), p. 32.
54 President Clinton submitted the convention in May 1998 to the Senate for advice and consent to ratify. At the time,
T APILS determined there was no legal impediment in U.S. law to ratification, and that existing legislation brings the
United States into compliance. Message from the President of the United States Transm itting ILO Convention (No.
111) Concerning Discrim ination (Em ploym ent and Occupation), Adopted by the International Labor Conference at its
42nd Session in Geneva on June 25, 1958, 115th Cong., 2nd sess., T reaty Doc 105—45 (Washington, DC: GPO, 1998).
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countries often merely comply with those conventions that already fit their national legislation,
while others emphasize other determinants of ratification and some positive outcomes.55
Global Trends in Labor Provisions in Trade Agreements
The lack of multilateral trade rules on and prevailing concerns over labor practices led to the
proliferation of other trade arrangements with labor provisions. The United States and European
Union (EU) were among the first to include conditional labor clauses within unilateral trade
preference programs, which offer duty-free market access to eligible imports from less-developed
countries. In addition, reciprocal labor commitments increasingly have become a feature of
bilateral and regional FTAs, especial y over the past decade. Per its latest survey, the ILO
reported that as of 2019, nearly 90 bilateral or plurilateral trade agreements included labor
provisions—about a third of agreements then in force global y.56 This compares to nearly 60 trade
agreements in 2013, 20 in 2005, and four in 1995.57 Such agreements involve those between
advanced and developing economies, as wel as increasingly between developing and emerging
economies. Of the surveyed FTAs, more than half include at least one G-7 trading partner
(Canada, France, Germany, Italy, Japan, the UK, and the United States).58 Given the lack of
multilateral trade rules on labor, some officials viewed past U.S.-EU attempts at negotiating an
FTA as offering an opportunity for possibly aligning approaches on using trade policy to promote
social sustainability59 and labor protections (see Text Box).60
Recent agreements include dedicated labor commitments within FTA chapters, varying both in
substance and enforcement mechanisms. Common features include references to domestic and
international standards per the ILO that address labor rights and working conditions; mechanisms
for monitoring or promoting compliance; and frameworks for cooperation.61 Some create new
institutional mechanisms to carry out cooperation activities and to engage in technical assistance.
The majority of provisions commit trade partners to observe certain minimum labor standards
and/or to enforce and not weaken domestic labor laws to attract trade and investment.
Implementation and enforcement mechanisms vary among agreements. Most provide a
framework for dialogue and monitoring, and many provisions are subject to limited or no FTA

55 For discussion, see Laurence R. Helfer, “Understanding Change in International Organizations: Globalization and
Innovation in the ILO,” Vanderbilt Law Review, vol. 59, no. 3 (2006): 649-726, and Nancy H. Chau and S. M. Ravi
Kanbur, “T he Adoption of International Labor Standards Conventions: Who, When and Why?” Brookings Trade
Forum , vol. 1 (January 2001): 113-156.
56 ILO, Labour Provisions in G7 Trade Agreements: A Comparative Perspective, 2019. ILO analysis is based on the
WT O Regional T rade Agreements database, and considers agreements with labor references and obligations that go
beyond aspirational preamble statements. For context, according to the WT O, as of January 2021, of nearly 350 trade
agreements in force, 110 agreements are categorized as containing labor provisions based on broader metric: “T his
category includes provisions on ‘labour measures’ which are t ypically found in the services or/and investment chapter
or in the economic cooperation or sustainable development chapters. T his includes best endeavour provisions and
rendezvous clauses.” See WT O, Regional T rade Agreements Database, and RTA Provisions Glossary.
57 ILO, Handbook on Assessment of Labour Provisions, 2017 and Social Dimensions of Free Trade Agreements, 2015.
58 ILO, Labour Provisions in G7 Trade Agreements. T he G-7 agreements treat EU-wide agreements as those of the
relevant G-7 countries, as the EU has exclusive competence to negotiate and conclude FT As.
59 See e.g., National Board of T rade Sweden, Trade and Social Sustainability: An Overview and Analysis, 2017.
60 European Parliament, Policy Department A, Economic and Scientific Policy, TTIP and Labour Standards, 2016. EU
officials framed its T T IP proposal as providing the opportunity to negotiate “the most comprehensive set of
fundamental international standards of labour rights […] ever contained in a trade agreement.” Cecilia Malmström,
Commissioner for T rade, “ T T IP: What consumers have to gain,” European Commission – Speech, January 26, 2016.
61 ILO, Handbook on Assessment of Labour Provisions, p. 1.
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dispute settlement procedures. Key distinguishing features include the nature of penalties for
failure to abide by labor obligations, establishment of incentives for compliance, and the extent of
capacity-building assistance.62 Many agreements, such as those of the EU, New Zealand, and
Chile, focus on cooperation and dialogue activities, as wel as consultations to resolve disputes,
with the support of an expert body. U.S. and Canadian agreements general y provide for
enforcement mechanisms with recourse to trade sanctions for at least some labor provisions. To
date, the vast majority of labor complaints submitted under trade agreements involve U.S. FTAs.
Two labor disputes have been adjudicated through dispute settlement procedures resulting in
panel decisions: the U.S.-Guatemala dispute under the Dominican Republic-Central America FTA
(CAFTA-DR) in 2017; and the EU-Korea dispute under their bilateral FTA in 2021.
Labor Provisions in EU FTAs Compared to U.S. Approaches
Recent EU FTAs typical y contain a “Trade and Sustainable Development” (TSD) chap ter that includes labor
provisions. The EU approach to such provisions has similarities and differences to U.S. approaches. Like U.S. FTAs,
EU labor provisions commit parties to effectively enforce their labor laws, and not to derogate from, or fail to
enforce such laws to encourage trade or investment. Both U.S. and EU FTAs general y commit to uphold the
fundamental principles and rights of the ILO 1998 Declaration. EU FTAs also typical y refer to additional
instruments, such as the ILO’s Decent Work Agenda and 2008 Declaration on Social Justice for a Fair
Globalization. They commit to implementing ratified ILO conventions and to “make continued and sustained
efforts” toward ratifying al fundamental conventions—the EU has ratified al eight, compared to two by the U.S. In
the case of the EU-Vietnam FTA (entered into force in 2020), to advance this commitment, before FTA
ratification, Vietnam reformed its labor code, ratified two ILO conventions (col ective bargaining and forced labor),
and adopted a “road map” for ratifying the freedom of association convention.63
In terms of enforcement, both U.S. and EU FTAs emphasize cooperation and dialogue mechanisms for initial y
resolving labor compliance concerns and disputes. Unlike the United States, EU FTAs general y do not include
recourse to trade sanctions and may have distinct dispute settlement mechanisms, such as use of a Panel of
Experts. In its first labor dispute under a modern FTA, the EU chal enged South Korean compliance, requesting a
panel in 2019.64 The EU posited that South Korea had failed to uphold commitments of “respecting, promoting
and realizing” in laws and practices ILO principles, namely related to freedom of association and col ective
bargaining, and to make “continued and sustained efforts” towards ratification of core conventions. Some experts
argue that the outcome could have implications for the interpretation of FTA labor provisions in the adjudication
of future disputes.65
In its 2021 trade strategy, the European Commission emphasized efforts to ensure effective implementation and
enforcement of FTA TSD chapters “to level-up social, labour and environmental standards global y” and pledged
to review the scope of TSD commitments, monitoring mechanisms, and possibility of sanctions as a remedy.66
Debate over Role and Impact of Labor Provisions
Debate over the role of labor provisions, or “social clauses,” in trade agreements is longstanding,
and has featured prominently in broader debate over the tradeoffs of globalization.67 An extensive

62 Polaski, “Protecting Labor Rights through T rade Agreements: An Analytical Guide.”
63 Some have also criticized EU approaches in the proposed EU-China Comprehensive Agreement on Investment
(CAI) for lacking binding, enforceable language committing China to ratify ILO conventions on forced labor. Shannon
T iezzi, “China-EU Investment Deal Sparks Backlash Over Rights Concerns,” The Diplomat, January 13, 2021.
64 Panel of Experts Proceeding Constituted Under Article 13.15 of the EU-Korea Free Trade Agreement, Report of
Panel of Experts, January 20, 2021.
65 For example, Desirée LeClercq, “ T he Panel Report under the EU-Korea T rade Agreement Concerning Labor
Practices,” International Economic Law and Policy Blog, February 8, 2021.
66 European Commission, Trade Policy Review - An Open, Sustainable and Assertive Trade Policy, February 18, 2021.
A formal review of its 15-point action plan on implementation and enforcement of T SD chapters is expected in 2021.
67 See Leary, “Workers’ Rights and International Trade;” Jagdish Bhagwati, T rade Liberalization and ‘Fair T rade’
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body of literature focuses on various aspects of the debate, including the impact of labor
standards on trade and investment flows, the merits and impact of linking labor standards to trade
agreements, and effects of trade policies on labor rights and labor markets. Overal , studies find a
lack of robust evidence of either a “race to the bottom” in standards—as some labor advocates
al ege, or of protectionist use of labor standards—a prevailing concern in developing countries
and among other stakeholders.68 Some analyses find evidence that lower labor standards tend to
reduce competitiveness, rather than bolster export performance or attract investment.69 One study
finds that while labor clauses in FTAs do not have a significant impact on bilateral trade flows on
average, they have benefited exports of low-income countries.70 Such effects were amplified by
provisions that facilitated deeper cooperation, such as technical assistance and capacity building,
and establishment of committees for monitoring implementation of labor commitments.
Conclusions vary as to the effectiveness of labor provisions in trade agreements.71 Several studies
attempt to measure the impact of FTA provisions on labor standards and working conditions,
which can be difficult to assess due to the lack of comparable cross-country data and chal enges
measuring the application of labor standards—e.g., ratification of ILO conventions and passage
of laws often do not effectively measure enforcement.72 Empirical analysis of the impact of U.S.
FTAs with Latin American and Caribbean countries finds overal significant improvement in
labor law enforcement through more inspection resources and activities (with the exception of
inconclusive findings in Mexico).73 The findings reinforce other qualitative studies documenting
positive effects of U.S. FTAs in Latin America, such as through increased fiscal resource
al ocations to inspection agencies and labor inspector training.74 One study finds that U.S. FTAs
more often led to ex-ante improvement of labor rights in partner countries (i.e. countries
improved labor standards before signing) rather than ex-post enforcement of labor provisions
after FTAs enter into effect.75 The ILO also contends that U.S. FTAs with pre-ratification
conditionality—i.e., requirements to address deficiencies in domestic labor standards prior to FTA
ratification—led to more comprehensive and significant changes in labor legislation.76

Demands: Addressing the Environmental and Labour Standards Issues, World Econom y, vol. 18 (1995): 745-759;
Maskus, Should Core Labor Standards be Im posed Throu gh International Trade Policy?; Drusilla Brown,
International Trade and Core Labour Standards: A Survey of the Recent Literature , Labour Market and Social Policy
Occasional Papers Nº 43, OECD, October 2000; Samira Salem and Faina Rozental, Labor Standards and Trade: A
Review of Recent Em pirical Evidence, U.S. International T rade Commission, 2012; and Elliott, “ Labor Standards.”
68 Salazar-Xirinachs and Martinez-Piva, “Trade, Labour Standards and Global Governance”; Elliott and Freeman, Can
Labor Standards Im prove Under Globalization?; and Robert Stern, Labor Standards and Trade Agreem ents,
Discussion Paper No. 496, University of Michigan, 2003.
69 Will Martin and Keith E. Maskus, “Core Labour Standards and Competitiveness: Implications for Global T rade
Policy,” Review of International Econom ics, vol. 9, no. 2 (2001); OECD, International Trade and Core Labour
Standards, 2000, and T rade, Em ployment and Labour Standards, 1996.
70 Céline Carrère, Marcelo Olarreaga, Damian Raess, Labor Clauses in Trade Agreements: Worker Protection or
Protectionism ? August 2017.
71 Salem and Rozental, Labor Standards and Trade: A Review of Recent Empirical Evidence.
72 Anne Posthuma and Franz Christian Ebert, Labour Provisions in Trade Arrangements: Current Trends and
Perspectives, ILO International Institute for Labour Studies Discussion Paper, July 2010.
73 Sabina Dewan and Lucas Ronconi, U.S. Free Trade Agreements and Enforcement of Labor Law in Latin America ,
IDB Working Paper Series No. IDB-WP-543, Inter-American Development Bank, November 2014.
74 Ibid, p. 8.
75 Moonhawk Kim, “Ex Ante Due Diligence: Formation of PT As and Protection of Labor Rights,” International
Studies Quarterly, vol. 56, no. 4 (2012): 704-719.
76 ILO, Social Dimensions of Free Trade Agreements, International Institute for Labour Studies, 2013, pp. 29-41.
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Some studies find certain conditions may increase the likelihood that labor obligations have a
positive impact. These include the threat of enforcement through trade sanctions, positive
incentives such as trade benefits or capacity-building assistance, and certain market or sectoral
factors.77 The ILO emphasizes that the political wil of countries involved and advocacy of civil
society are crucial factors.78 Some analyses use a case study approach and focus on specific
indicators, such as child labor. For example, civil society engagement coupled with potential trade
restrictions were credited with helping to mitigate use of child labor or advance labor protections
in the cases of Bangladesh’s garment sector, Pakistan’s manufacturing, and Cambodia’s textiles
industries.79
The role and effectiveness of trade sanctions are debated, with punitive action general y viewed
as a measure of last resort, given the underlying development objectives of labor clauses, the
potential harm to foreign workers, and limited resources governments have to carry out labor law
enforcement.80 Many analysts contend that the “stick” of suspension of trade benefits for labor
violations is more effective when coupled with “carrots” of technical assistance. Some argue that
a trade sanctions approach may be less effective in mitigating labor issues, in particular those that
occurring in less prominent export sectors and driven by lower development and other conditions;
for example, in the case of child labor which often occurs in non-tradable sectors.81
Labor Provisions in Selected U.S. Trade Policy Tools
Section 307 of Tariff Act of 1930 and Forced Labor82
The persistence of forced labor in some global supply chains has become an elevated issue for the
trade enforcement priorities of the Biden Administration and for some Members of Congress.
Since the late 19th century, the United States has prohibited imports produced by prison labor.
Section 307 of the Tariff Act of 1930, as amended (19 U.S.C. §1307), expanded this prohibition
to ban U.S. imports of any product mined, produced, or manufactured, wholly or in part, by
forced labor, including forced or indentured child labor.83 An individual may submit a petition
under Section 307 al eging goods produced by forced labor are being imported, and CBP may
investigate, issue a withhold release order (WRO) to block entry into the United States, and

77 Elliott and Freeman, Can Labor Standard Improve Under Globalization?; Polaski, “Protecting Labor Rights through
T rade Agreements”; Salem and Rozental, “Labor Standards and T rade: A Review of Recent Empirical Evidence,” pp.
1-36; and Gunseli Berik and Yana Rodgers, “ Options for Enforcing Labour Standards: Lessons from Bangladesh and
Cambodia,” Journal of International Developm ent, vol. 22, no. 1 (January 2010): 56-85.
78 ILO, Social Dimensions of Free Trade Agreements.
79 Elliott and Freeman, Can Labor Standard Improve Under Globalization? pp. 111-119.
80 As one expert reflects: “the goal of potential penalties is not to utilize them per se, but rather to establish a
disincentive or punishment that is adequate to deter a party from failing to carry out its obligations, and thus to
encourage voluntary compliance…. Because the ultimate victim of a party’s non-compliance is the working population
of that country and not the government or employers, care must be taken to ensure that the penalty will help and not
harm those workers. A fine that is used directly to address the labor problem may be more effective than a withdrawal
of trade benefits in correcting the underlying violation.” Polaski, pp. 20 -21.
81 Salazar-Xirinachs and Martinez-Piva, “Trade, Labour Standards and Global Governance.”
82 For more detail and analysis, see CRS Report R46631, Section 307 and U.S. Imports of Products of Forced Labor:
Overview and Issues for Congress, coordinated by Cathleen D. Cimino-Isaacs.
83 T he act defines forced labor as work or service “exacted from any person under the menace of any penalty for its
nonperformance and for which the worker does not offer himself voluntarily .” Labor trafficking that is linked to forced
labor is considered one of the severe forms of trafficking in persons, defined by the T ra fficking Victims Protection Act
of 2000 (22 U.S.C. §7102).
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potential y seize the merchandise.84 Various other U.S. government measures may inform the
issuance of WROs under Section 307 and seek to address labor trafficking more broadly.85
The ILO estimated that, in 2016, 25 mil ion people were engaged in forced labor, with
approximately 16 mil ion of those in the private sector.86 Sizing up the volume of trade flows tied
to forced labor is difficult, due to the complexity of supply chains, the magnitude of global trade,
and chal enges to tracing, given widespread subcontracting and at times ineffective auditing. U.S.
data are also limited, as CBP does not disclose the value of shipments produced by forced labor
that are imported, detained, or seized. Congressional y-mandated reports by DOL’s Bureau of
International Labor Affairs (ILAB) provide broad insights on countries and sectors at high risk for
forced labor. ILAB’s latest list specifies 63 categories of goods in at least 41 countries with
known production by forced labor (including 26 with forced child labor) (Figure 2).87
Figure 2. Countries with Production by Forced Labor and/or Forced Child Labor

Source: U.S. DOL, Bureau of International Labor Affairs, 2020 List of Goods Produced by Child Labor or Forced
Labor and 2019 List of Products Produced by Forced or Indentured Child Labor.
Notes: * Categories may overlap; some countries with forced child labor also have incidence of non-child forced
labor.
Since the Tariff Act’s enactment, CBP has issued around 50 WROs to restrict imports under
Section 307. None were issued between 2000 and 2016, and nearly 30 have been issued since
2016.88 The limited enforcement of Section 307 prior to 2016 was in large part due to the
“consumptive demand” clause, which al owed forced labor imports if U.S. production of those
goods was not sufficient to meet the U.S. consumptive demand. Congress removed this exception

84 CBP may issue a WRO when information reasonably, but not conclusively, indicates that merchandise produced with
forced labor is being, or likely to be, imported into the United States. Pursuant t o WROs, CBP may detain shipments at
U.S. ports of entry, unless an importer provides sufficient evidence that it was not made with forced labor.
85 For discussion, see CRS Report R46631, Section 307 and U.S. Imports of Products of Forced Labor.
86 ILO, “ Forced labour, modern slavery and human trafficking,” at https://www.ilo.org/global/topics/forced-labour/
lang—en/index.htm.
87 U.S. DOL, ILAB, 2020 List of Goods Produced by Child Labor or Forced Labor and 2019 List of Products
Produced by Forced or Indentured Child Labor, at https://www.dol.gov/agencies/ilab/resources/reports/child-labor.
88 U.S. CBP, “Withhold Release Orders and Findings,” at https://www.cbp.gov/trade/programs-administration/forced-
labor/withhold-release-orders-and-findings.
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in 2015.89 While WROs have typical y been limited to specific manufacturers and producers, CBP
recently has issued broader industry- and country-wide orders, covering entire product lines.
A regional enforcement approach has gained traction recently in particular for responding to
forced labor practices in China, given deepening concerns over the arguably systemic state-
sponsored forced labor of ethnic Uyghurs and other Turkic Muslims in the Xinjiang Uyghur
Autonomous Region, and China’s central role in global manufacturing.90 Since 2019, the majority
of CBP’s Section 307 actions have targeted products involving Xinjiang-related forced labor,
with nearly a dozen WROs against Xinjiang goods. In January 2021, CBP issued its first region-
wide WRO against Xinjiang, blocking al imports of cotton and tomatoes grown in the region, as
wel as downstream products.91 The CBP orders effectively require U.S. importers of apparel and
textiles to demonstrate that their imports do not contain material from Xinjiang, necessitating a
more robust system for traceability and verification.92 The U.S. government’s updated “Xinjiang
Supply Chain Business Advisory,” issued in July 2021, identified several high-risk sectors and
warned businesses of significant reputational, economic, and legal risks of involvement with
entities engaged in human rights abuses and forced labor.93 It noted that “businesses and
individuals that do not exit supply chains, ventures, and/or investments connected to Xinjiang
could run a high risk of violating U.S. law.”
The effectiveness of Section 307 in deterring forced labor imports and practices remains subject
to debate. Some labor groups and government agencies recommend improving transparency in
CBP decisions and requirements, such as clarifying evidentiary standards, and improving
collaboration with other anti-trafficking initiatives.94 Other stakeholders argue that companies
should improve supply chain due diligence (see Text Box), and advocate for greater enforcement
actions against an entire industry, region, or country.95 The private sector has cautioned about
potential spil over effects of expanded enforcement, such as disrupting legitimate supply chains,
and raised concerns about practical chal enges, such as tracing difficulties in supply chains.96
Multinationals, Codes of Conduct, and Supply Chain Due Diligence
Increasing consumer and multinational company demand for goods produced under decent labor conditions has
shaped the development of global trade rules and measures on worker rights. In particular, in the 1990s,
consumer backlash rose against sweatshop labor, spurred by media accounts and incidents involving high profile
companies, such as Nike, and global apparel and footwear manufacturing. To assist in navigating third-party
suppliers and markets abroad, multinational companies developed codes of conduct, social audits, risk

89 Per the T rade Facilitation and T rade Enforcement Act, P.L. 114-125.
90 See CRS In Focus IF10281, China Primer: Uyghurs, by T homas Lum and Michael A. Weber.
91 U.S. CBP, “CBP Issues Region-Wide Withhold Release Order on Products Made by Slave Labor in Xinjiang,” P ress
release, January 13, 2021.
92 For example, see Amy K. Lehr, New Approaches to Supply Chain Traceability, Center for Strategic and International
Studies, November 2020.
93 U.S. Departments of State, the T reasury, Commerce, and Homeland Security, “ Xinjiang Supply Chain Business
Advisory,” updated July 13, 2021, at https://www.state.gov/xinjiang-supply-chain-business-advisory/.
94 For example, International Labor Rights Forum (ILRF), Combatting Forced Labor and Enforcing Workers’ Rights
Using the Tariff Act, Briefing Paper, February 2020; and U.S. GAO, Forced Labor – Better Com m unication Could
Im prove Trade Enforcem ent Efforts Related to Seafood , GAO-20-441, June 2020.
95 ILRF, Combatting Forced Labor.
96 Commercial Customs Operations Advisory Committee (COAC), Report of the Intelligent Enforcement Subcommittee
Forced Labor Working Group, July 15, 2020; T estimony by Stephen Lamar, President and CEO, American Apparel &
Footwear Association, U.S. Congress, House Ways and Means Committee, Enforcing the Ban on Im ports Produced by
Forced Labor in Xinjiang, hearing, 116th Cong., 2nd sess., September 17, 2020.
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management and due diligence measures, often in concert with civil society and international organizations, such as
the Organization for Economic Co-operation and Development (OECD),97 and in response to various national
legislation on labor-related disclosure requirements.98 Multi-stakeholder codes of conduct on worker rights, such
as of the Fair Labor Association (FLA) and Worker Rights Consortium (WRC), general y contain provisions on
monitoring, verification, certification of supplier factories, enforcement mechanisms, and transparency.99
With respect to forced labor, U.S. importers have an obligation to exercise “reasonable care” when importing
into the United States, which includes the responsibility to take reliable measures to ensure goods are not
produced whol y or in part with forced labor. Many U.S. companies have issued public commitments to eliminate
forced labor in supply chains and emphasize a zero tolerance approach. In general, companies tend to be more
advanced in developing supply chain commitments and monitoring labor conditions of their first-tier suppliers with
whom they have direct relationships. While efforts have made important strides in certain sectors, forced labor in
some supply chains persists, and some argue for greater accountability and transparency measures. To this end,
some bil s in the 117th Congress aim to improve disclosure and transparency of companies (e.g., H.R. 2072). There
have been similar efforts in the past, but no bil has passed at the federal level, with the exception of due diligence
requirements related to conflict minerals.100
Some Members of Congress have expressed interest in ensuring CBP actively applies Section
307, and have proposed various legislation to address enforcement issues. For example, the
Uyghur Forced Labor Prevention Act (H.R. 1155/S. 65) would create a rebuttable presumption
provision that al goods produced or manufactured in Xinjiang are made with forced labor, and
are thus prohibited under Section 307. This and other bil s also aim to improve disclosure and
transparency from companies. Provisions of the Trade Act of 2021 (Division G of S. 1260) direct
CBP to prioritize certain forced labor investigations, and to prevent imports of seafood harvested
or produced with forced labor. Congress also used passage of USMCA (P.L. 116-113) to bolster
enforcement efforts related to Section 307 and interagency coordination, through creation of the
new Forced Labor Enforcement Task Force, chaired by the Secretary of Homeland Security.
Eligibility Criteria in U.S. Trade Preference Programs
U.S. unilateral trade preference programs, such as the Generalized System of Preferences (GSP)
and the African Growth and Opportunity Act (AGOA), offer duty-free market access to certain
imports from less developed countries, with the receipt of benefits conditioned on eligibility
criteria including related to worker rights. Country specific programs, such as for Haiti, may also
include labor-related criteria.101 The United States has also engaged some beneficiary countries in
supplemental programs and sectoral trade agreements that focus on strengthening labor standards
(see Text Box).
Some observers view GSP, the largest and longest running program, as expanding more broadly
into U.S. trade law and policy “both the principle of a labor rights-trade linkage and the practice

97 For example, OECD, Due Diligence Guidance for Responsible Business Conduct, 2018 and Update of the OECD
Guidelines for Multinational Enterprises, 2011. Per the OECD, “ risk-based due diligence refers to the steps companies
should take to identify and address actual or potential risks in order to prevent or mitigate adverse impacts associated
with their activities or sourcing decisions.”
98 Nicola Phillips, Genevieve LeBaron, and Sara Wallin, Mapping and Measuring the Effectiveness of Labour-related
Disclosure Requirem ents for Global Supply Chains, Working Paper No. 32, ILO, June 2018.
99 For discussion, see Lance Compa, Corporate Social Responsibility and Workers’ Rights, 2008.
100 Section 1502 of T itle XV of the Dodd-Frank Wall Street Reform and Consumer Protection Act (P.L. 111-203)
requires publicly-traded companies to report if and where they purchased “ conflict minerals” mined in or sourced from
the Democratic Republic of the Congo (DRC) or adjoining countries, and engage in due diligence reporting. See CRS
Report R42618, Conflict Minerals in Central Africa: U.S. and International Responses, by Nicolas Cook.
101 See ILAB, “Laws and Regulations,” at https://www.dol.gov/agencies/ilab/about/laws.
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of applying it.”102 GSP was created in 1974 and involved 119 beneficiary developing countries
and territories when it expired in December 2020.103 Some Members have proposed
reauthorization legislation. When designating beneficiary countries, the President is directed to
consider certain mandatory and discretionary criteria. As part of GSP reauthorization in 1984
(P.L. 98-573), Congress expanded eligibility criteria to include whether that country is “taking
steps to afford international y recognized worker rights to workers.”104 The Trade and
Development Act of 2000 (P.L. 106-200) expanded criteria to include implementation of
commitments to eliminate the “worst forms of child labor.” The latest version of the statute
defines “international y recognized worker rights” as: (a) the right of association; (b) right to
organize and bargain collectively; (c) prohibition on the use of forced or compulsory labor; (d)
minimum age for the employment of children, and prohibition on the worst forms of child labor;
and (e) acceptable conditions of work with respect to minimum wages, hours of work, and
occupational health and safety.105
The interagency GSP Subcommittee of the Trade Policy Staff Committee (TPSC), chaired by
USTR, conducts annual reviews of compliance with eligibility requirements, and makes
recommendations to the President to remove, suspend, or limit GSP status or benefits (at both the
country or product level). USTR may self-initiate eligibility reviews or interested parties may file
a petition requesting review, including in cases where countries are not upholding worker rights.
DOL’s ILAB informs such decisions through annual findings on beneficiary country
implementation of commitments to eliminate the worst forms of child labor.
AGOA (P.L. 106-200) extends duty-free treatment to imports of certain products from eligible
sub-Saharan African countries, with similar criteria of whether a country has “established, or is
making continual progress toward establishing … protection of international y recognized worker
rights.”106 To remain eligible, sub-Saharan African countries must meet eligibility requirements
for both GSP and AGOA programs. USTR with other TPSC members also conducts annual
AGOA eligibility reviews and make recommendations to the President. USTR’s congressional y
mandated biennial AGOA reports include an assessment of AGOA beneficiaries’ eligibility status.
Sectoral Approaches: U.S.-Cambodia Textile Agreement
The U.S.-Cambodia Textile Agreement, signed in January 1999 and renewed through 2004,107 was notable for
tying positive market access incentives to Cambodia’s improved enforcement of labor laws and protection of ILO
core standards in the textile and apparel sector.108 The agreement set U.S. import quotas that increased annual y
for 12 categories of textile and apparel exports from Cambodia. A program carried out by the ILO facilitated

102 Lance A. Compa and Jeffrey S. Vogt, “Labor Rights in the Generalized System of Preferences: A 20 -Year Review,”
Com parative Labor Law and Policy Journal, vol. 22 (2001), pp. 204-205.
103 T itle V of the T rade Act of 1974 (19 U.S.C. §§2461 – 2467), as amended. See CRS Report RL33663, Generalized
System of Preferences (GSP): Overview and Issues for Congress, by Vivian C. Jones and Liana Wong.
104 19 U.S.C. §2462(b)(G). In considering GSP renewal Members emphasized: “ It is not the expectation of the
Committee that developing countries come up to the prevailing labor standards in the United States and other highly-
industrialized developed countries. It is recognized that acceptable minimum standards may vary from country to
country.” U.S. Congress, House Committee on Ways and Means, Generalized System of Preferences Renewal Act o f
1984, report on H.R. 6023, 98th Cong., 2nd sess., H.Rept. 98-1090 (Washington, DC: GPO, 1984).
105 19 U.S.C. §2467(4).
106 See CRS In Focus IF10149, African Growth and Opportunity Act (AGOA), by Brock R. Williams. 19 U.S.C §3703.
107 T he agreement expired in 2005 with the end of the WT O Multifibre Arrangement, at https://www.wto.org/english/
tratop_e/texti_e/texintro_e.htm#MFA.
108 T ext at https://photos.state.gov/libraries/cambodia/231771/PDFs/uskh_texttile.pdf; UST R, “ U.S.-Cambodian T extile
Agreement Links Increasing T rade with Improving Workers’ Rights,” Press release, January 7, 2002.
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compliance through factory level monitoring of labor rights.109 While the agreement was in force, Cambodia’s
apparel exports quintupled to $2 bil ion.
Many observers viewed the agreement as successful in facilitating improvements in wages for garment workers in
Cambodia, working conditions, and respect for workers’ rights.110 Some considered the agreement as offering
“best practices” of improving factory compliance with labor standards.111 Experts attributed success to various
factors, including the close connection between firm behavior and incentives for the Cambodian government, as
wel as conditioning the quotas on sector-wide performance, ensuring peer pressure on non-compliant firms. In
particular, the combination of positive incentives and improved information about factory conditions was seen as
incentivizing wider compliance than the potential threat of punishment for noncompliance. Observers also
emphasized ILO monitoring as a key factor. Fol owing the end of the agreement, the Cambodian government
continued to seek a monitoring program that would provide a stronger certification of compliance, and Better
Factories Cambodia (backed by the ILO and World Bank’s International Finance Corporation) remains active.
The United States pursued sectoral agreements with some other countries, including a textile agreement with
Vietnam in 2003. On labor rights, the agreement cal ed for Vietnam to reaffirm its commitments to and cooperate
with the ILO, and to continue its bilateral programs with the U.S. DOL. Some criticized the less comprehensive
provisions compared to the Cambodia labor provisions.112
Following the addition of GSP labor criteria, more than 100 petitions to review eligibility were
filed in the first decade, usual y by labor unions such as the AFL-CIO and non-governmental
organizations.113 From 1984 to 2000, various U.S. administrations suspended GSP status for 13
countries.114 More recently, in one notable instance, the Obama Administration suspended
Bangladesh’s GSP benefits in June 2013 due to worker rights and workplace safety issues
uncovered in the wake of the Rana Plaza building collapse and Tazreen Fashion factory fire
incidents, which spurred an ongoing multi-stakeholder effort to resolve concerns.115 Recent
enforcement actions included President Trump’s decisions to suspend one-third of Thailand’s
GSP benefits in April 2020, and terminate Mauritania’s AGOA eligibility over forced labor in
January 2019.
Table 1. Recent GSP Eligibility Reviews Involving Worker Rights
Beneficiary
Basis for petition
Petitioner
Status/Action Taken
Azerbaijan
Worker Rights
USTR
Ongoing
Eritrea
Worker Rights
USTR
Ongoing
Kazakhstan
Worker Rights & Child Labor
AFL-CIO
Ongoing
Zimbabwe
Worker Rights
USTR
Ongoing
Bolivia
Worker Rights & Child Labor
USTR
Closed October 2019, no loss of benefits
Iraq
Worker Rights
AFL-CIO
Closed October 2019, no loss of benefits

109 Kevin Kolben, Trade, Monitoring, and the ILO: Working To Improve Conditions in Cambodia’s Garment
Factories, Yale Law School Legal Scholarship Repository, 2004.
110 Polaski, “Protecting Labor Rights through T rade Agreements,” p. 21.
111 Don Wells, “‘Best practice’ in the Regulation of International Labor Standards: Lessons of the U.S. -Cambodia
T extile Agreement,” Comparative Labor Law & Policy Journal, vol. 27 (2006): 357-376.
112 CRS Report RL31470, The Vietnam-U.S. Textile Agreement, by Mark E. Manyin and Amanda Douglas.
113 Elliott and Freeman, Can Labor Standards Improve Under Globalization? p. 75.
114 Compa and Vogt, “Labor Rights in the Generalized System of Preferences,” p. 209.
115 Proclamation 8997, “To Modify Duty-Free T reatment Under the Generalized System of Preferences, and for Other
Purposes,” 78 Federal Register 39949, July 2, 2013. UST R, “United States and Bangladesh Hold 4th T rade and
Investment Cooperation Forum Agreement Council Meeting,” press release, September 2018. ILO, “ T he Rana Plaza
Accident and its aftermath,” at https://www.ilo.org/global/topics/geip/WCMS_ 614394/lang—en/index.htm.
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Thailand
Worker Rights
AFL-CIO
Proclamation (October 25, 2019) removed
certain tariff lines from GSP eligibility, in
effect April 2020
Georgia
Worker Rights
AFL-CIO
Closed October 2020, no loss of benefits
Uzbekistan
Worker Rights & Child Labor
ILRF
Closed October 2020, no loss of benefits
Source: USTR, “Ongoing Country Reviews,” at https://ustr.gov/issue-areas/preference-programs/generaliz ed-
system-preferences-gsp/current-reviews/ongoing-country.
Note: AFL-CIO = American Federation of Labor and Congress of Industrial Organizations; ILRF = International
Labor Rights Forum
Some experts view the GSP labor rights clause as an important instrument that set a precedent for
other U.S. trade policy tools (see Text Box). In this view, the “wil ingness of the United States to
act unilateral y, most pointedly in the GSP context, has driven a process of bilateral, regional, and
multilateral action to promote workers’ rights in trade that goes far beyond the GSP program.”116
At the same time, other observers criticized the unilateral approach of GSP in placing conditions
on countries, and for shortcomings in design and implementation.117 Some experts questioned the
invocation of “international y recognized worker rights” in U.S. trade statutes without reference
to ILO conventions or other precepts, arguing this may undermine efforts to create consistent
international norms.118 For example, the GSP statute’s definition excludes nondiscrimination,
long recognized as a core labor standard,119 while including working conditions, such as
minimum wages, and health and safety that lie outside of the core ILO conventions. Other
observers cite concerns over lack of clarity in GSP eligibility decisions over worker rights issues,
and the President’s discretion to inject strategic and political considerations into such decisions.120
A 2018 study assessing GSP actions from 1986-2013 examined the influence of domestic political
interests in the application of the program’s labor provisions to assess whether interests of import-
competing firms and industries drive eligibility decisions.121 The authors found that the U.S.
government general y took country-level actions against beneficiaries who most severely violate
labor rights, thus undermining perceptions that such actions are a vehicle for “disguised trade
protectionism.” At the same time, the study noted that worker rights were not systematically
taken into consideration at the country-product level (i.e., a particular product produced in a
specific country), where GSP decisions can have greater material value.

116 Compa and Vogt, “Labor Rights in the Generalized System of Preferences.”
117 Alston, “Labor Rights Provisions in U.S. T rade Law: ‘Aggressive Unilateralism?’”; George T sogas, “Labour
Standards in the Generalized Systems of Preferences of the European Union and the United States,” European Journal
of Industrial Relations, vol. 6, no. 3 (December 2011): 349–370.
118 Alston, “Labor Rights Provisions in U.S. T rade Law,” p. 32.
119 Some Members in the 117th Congress have introduced legislation to add elimination of discrimination; “Wyden
introduces trade preference bill with new GSP conditio ns,” Inside U.S. Trade, May 18, 2021. In the 2002 debate to
reauthorize T PA, a Senate amendment also proposed adding non -discrimination to GSP to make it “ consistent with the
concept as defined by the ILO.” U.S. Congress, House of Representatives, T rade Act of 2002, conference report to
accompany H.R. 3009, 107th Cong., 2nd sess., H.Rept. 107-624 (Washington, DC: GPO, 2002), pp. 188-189.
120 Compa and Vogt, “Labor Rights in the Generalized System of Preferences.”
121 Emilie M. Hafner-Burton, Layna Mosley, and Robert Galantucci, “Protecting Workers Abroad and Industries at
Home: Rights-based Conditionality in T rade Preference Programs,” Journal of Conflict Resolution, vol. 63, issue 5
(2019): 1253-1282.
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Labor Conditionality in Other U.S. Trade Policy Tools

In 1985, Congress added a labor rights clause governing the Overseas Private Investment Corporation
(OPIC), which provided political risk insurance, financing and other support for U.S. companies investing
overseas. Projects could be implemented only in countries that have, or are taking steps to adopt and
implement, laws that uphold international y recognized worker rights, as defined in the GSP statute (22 U.S.C.
§2191a(a)). Congress extended similar requirements to the U.S. International Development Finance
Corporation (DFC), created per P.L. 115-254, which assumed OPIC’s functions. The DFC also must include
language in al contracts for supporting worker rights and combatting forced or child labor.

The Omnibus Trade Act of 1988 (P.L. 100-418) amended Section 301 of the Trade Act of 1974 and
authorized the USTR to investigate and potential y impose trade sanctions for violations of worker rights by
trading partners as actions that are “unjustifiable” or “unreasonable” and burden U.S. commerce (19 U.S.C.
§2411(d)(3)(B)(i i)). In the 1998 Omnibus Trade Act, Congress also added protection of labor rights to the
principal negotiating objectives of TPA—see “Congressional Requirements in Trade Promotion Authority.”

The Trade and Development Act of 2000 (P.L. 106-200) amended Section 307 of the Tariff Act of 1930 to
include “forced or indentured child labor” in its definition, reflecting a similar amendment to GSP.
Source: Compa and Vogt, “Labor Rights in the Generalized System of Preferences,” pp. 205 -206, CRS In Focus
IF11436, U.S. International Development Finance Corporation (DFC), by Shayerah I. Akhtar and Nick M. Brown, and
CRS Report R46604, Section 301 of the Trade Act of 1974: Origin, Evolution, and Use, by Andres B. Schwarzenberg.
Analyses of the impact of GSP conditionality on improving labor practices find certain factors
may correspond with higher rates of success. One study of early GSP petitions concluded that
cases were more likely to lead to improvements depending on factors such as the involvement of
human rights groups in the process; the degree of democracy in recipient country; the category of
worker rights contested; and the extent of the target country’s reliance on U.S. trade.122 The
authors found the impact of trade sanctions to be inconsistent in producing improvements—often,
weaknesses in local enforcement prevented compliance, especial y absent technical and financial
assistance. The impact of the potential loss of trade preferences on labor outcomes and workers
remains a key issue. In the view of one expert “serious violations of human or worker rights
should be addressed,” however, “strict enforcement of al [GSP] conditions would likely mean
that very few countries remain eligible … and it’s not clear [that] would improve the underlying
conditions of concern. Yet, withdrawing preferences would cost poor workers in the beneficiary
country their jobs.”123 In this vein, another expert emphasizes the “overal aim of social clauses in
trade should be to further the economic and social progress of developing countries.”124
Congressional Requirements in Trade Promotion Authority
Trade Promotion Authority (TPA) is the key legislative vehicle by which Congress establishes
U.S. negotiating objectives and priorities for trade agreements, as wel as expedited procedures
for considering FTA implementing legislation.125 The last authorization of TPA expired on July 1,
2021; a request by the Biden Administration for reauthorization could spur renewed congressional
debate over objectives with respect to labor. Since 1988, Congress has included promoting core
worker rights as a principal trade-negotiating objective in TPA. Such provisions have evolved,
il ustrating changing congressional priorities and compromises. Members have often contested

122 Elliott and Freeman, Can Labor Standards Improve Under Globalization? pp. 75-79.
123 Elliott, Developing a More Inclusive US Trade Policy, p. 7.
124 T sogas, “Labour Standards in the Generalized Systems of Preferences,” p. 366.
125 CRS Report R43491, Trade Promotion Authority (TPA): Frequently Asked Questions, by Ian F. Fergusson and
Christopher M. Davis.
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language defining objectives, and differences over labor provisions have featured prominently in
some reauthorization debates—including rare instances of revocation of TPA.126
Labor provisions were not included in negotiating objectives in the original grant of TPA in the
Trade Act of 1974 (P.L. 93-618)—enacted during the Tokyo Round of multilateral trade
negotiations—but they were specified in the context of GATT reform. The 1974 Act directed the
President to bring trade agreements “into conformity with principles promoting the development
of an open, nondiscriminatory, and fair world economic system,” including through “adoption of
international fair labor standards and of public petition and confrontation procedures in the
GATT.”127
Congress subsequently specified principal negotiating objectives on labor in the Omnibus Trade
and Competitiveness Act of 1988 (P.L. 100-418). These included to promote respect for worker
rights; secure a review of the relationship of worker rights to the GATT with a view to ensuring
the trading system benefits al workers; and adopt the GATT principle that denial of worker rights
should not be a means for countries or industries to gain competitive advantage.128 This language
shifted from advocating for an explicit GATT provision, to a review of labor and trade linkages,
perhaps in recognition of the limitations of ongoing multilateral efforts and shifting priorities. Of
note, the section did not specifical y refer to “international y recognized” worker rights.
Disagreements over labor-related trade objectives were one factor in the instance of failed TPA
reauthorization in 1998. Although Republican congressional leadership and the Clinton
Administration supported TPA, the two sides could not agree on negotiating objectives for labor,
among other issues, and the bil did not garner enough support to pass.129
The Trade Act of 2002 (P.L. 107-210) expanded the language on labor. It specified overall trade
negotiating objectives “to promote respect for worker rights and the rights of children consistent
with core labor standards of the ILO … and an understanding of the relationship between trade
and worker rights,” and promote universal ratification and compliance with ILO Convention No.
182 on the worst forms of child labor.130 It expanded on principal negotiating objectives,
including to ensure a party does not “fail to effectively enforce” its labor laws through a
“sustained or recurring course of action or inaction, in a manner affecting trade and investment;”
and to strengthen trading partners’ capacity to respect “core labor standards.”131 It also directed
the President to “seek greater cooperation between the WTO and ILO,” and to establish
consultative mechanisms to strengthen capacity of trading partners to promote respect for core
labor standards, in order to maintain U.S. competitiveness.132 The act directed the Secretary of
Labor to consult with any country seeking an FTA about its labor laws and to provide technical
assistance, if needed.

126 For example, see Senate debate, Congressional Record, vol. 148, no. 62 (May 15, 2002), pp. S4343-S4345.
127 P.L. 93-618 (January 03, 1975), §121(a)(4); 88 Stat. Codified at 19 U.S.C. §2131. In reflecting on the provision, the
Senate Finance Committee emphasized, “ international fair labor standards and procedures to enforce them should be
established,” and “additional steps are need which would lead to the elimination of unfair labor conditions which
substantially disrupt or distort trade.” U.S. Congress, Senate Committee on Finance, T rade Reform Act of 1974, report,
together with additional views, on H.R. 10710, 93rd Cong., 2nd sess., S.Rept. 93-1208 (Washington, DC: GPO, 1974).
128 P.L. 100-418 (August 23, 1988), §1101(b)(14); 102 Stat. 1122.
129 CRS Report RL33743, Trade Promotion Authority (TPA) and the Role of Congress in Trade Policy, by Ian F.
Fergusson.
130 P.L. 107-210 (August 6, 2002), §2102(a)(6), 116 Stat. 994, codified at 19 U.S.C. §3802.
131 19 U.S.C. §3802(b)(11)(A-G).
132 19 U.S.C. §3802(c)(1-2).
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Under the Trade Act of 2002, Congress also approved a procedure for the Executive branch to
seek expedited approval and implementing legislation for the majority of U.S. FTAs (11 of 14)
now in force.133 Dissatisfied with FTA outcomes, some Members sought to strengthen labor (and
other) provisions in agreements already negotiated with Peru, Colombia, Panama, and South
Korea. These efforts resulted in the bipartisan “May 10th Agreement” of 2007 between
congressional leadership and the George W. Bush Administration,134 which included elements
proposed by House Democrats during the 2002 TPA renewal debate. Such changes subsequently
were codified within TPA in 2015 (see below).
In the case of the Colombia FTA, some Members initial y opposed passage, amid concerns over
worker rights and violence against unions.135 After the Bush Administration pushed consideration
of implementing legislation in 2008, without resolving congressional concerns, the House
approved a resolution withdrawing it from TPA treatment. The FTA was ultimately approved
under the Obama Administration in 2011, after the signing of an Action Plan Related to Labor
Rights.
The last TPA authorization, the Bipartisan Congressional Trade Priorities and Accountability Act
of 2015 (P.L. 114-26) was in effect through June 30, 2021. Objectives on labor largely reflect the
May 10th Agreement, which required that parties not only enforce their domestic labor laws, but
also that those statutes uphold the ILO Declaration. Key objectives include:
 to ensure a party does not waive or otherwise derogate from statutes or
regulations implementing international y recognized core labor standards in a
manner affecting trade or investment;
 to ensure that decisions regarding the distribution of labor enforcement resources
are not used as a reason for breaching labor obligations;
 to strengthen capacity of trading partners to promote respect for core standards;
 to ensure that labor obligations are subject to the same dispute settlement and
remedies as other enforceable obligations under the FTA;
 to ensure that an FTA is not construed to empower a party’s authorities to
undertake labor law enforcement activities in the territory of the United States.
Key U.S. FTA Commitments
Recent U.S. FTAs largely reflect the evolving negotiating objectives under TPA statutes; at the
same time, some FTAs also influenced subsequent versions of TPA. U.S. FTA labor provisions
general y represented a balance between policymakers and stakeholders advocating for more
substantive commitments and those skeptical of FTAs as an appropriate vehicle for addressing
labor and trade issues. Some experts characterized early U.S. FTAs as “largely concerned with
finding political y acceptable trade-labor mechanisms that permit trade agreements to proceed,
while doing little to ensure that labor standards improve.”136

133 For a visual depiction of U.S. FT As considered under T PA, see CRS Infographic IG10001, Trade Promotion
Authority (TPA) and U.S. Trade Agreem ents, by Brock R. Williams.
134 T ext available at https://waysandmeans.house.gov/media-center/tpp-focus.
135 E.g., “ Pelosi, Hoyer, Rangel, and Levin Statement on T rade,” Press release, June 29, 2007.
136 Elliot and Freeman, Can Labor Standard Improve Under Globalization? p. 89. Also see I. M. (Mac) Destler,
Am erican Trade Politics in 2007: Building Bipartisan Com prom ise, Policy Brief 07-5, Peterson Institute, May 2007.
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Approaches under NAFTA provided the baseline for this evolution. The original NAFTA did not
include labor provisions, leading President Clinton to negotiate a side agreement, the North
American Agreement on Labor Cooperation (NAALC). The NAALC contained 11 “guiding
principles” on worker rights.137 It laid out an extensive list of issues and means for cooperation
and capacity building activities, and set up a labor cooperation mechanism, with regular meetings.
NAALC aimed to settle labor complaints primarily via dialogue and consultations. Thus most
commitments were subject to dispute procedures separate from those applicable to NAFTA’s
main commercial obligations. More formal dispute procedures, including an arbitral panel and
monetary penalties, applied to al egations involving a “persistent pattern of failure” to enforce
“occupational safety and health, child labor or minimum wage technical labor standards,” where
the matter was trade-related. Other key issues, such as freedom of association and the right to
organize, were limited to ministerial consultations.138
Following NAFTA, most U.S. FTAs signed in the 2000s, beginning with Jordan, included an
obligation not to fail to effectively enforce domestic labor laws in a manner affecting trade
between the parties. While there are differences in the agreements’ provisions, some observers
have coined these as essential y “first generation” U.S. FTAs.139 “Labor laws” reflect the worker
rights as specified in the GSP statute, and parties commit to “strive to ensure that such [ILO]
labor principles and the international y recognized labor rights ... are recognized and protected by
its law [emphasis added].” The FTAs establish institutional and labor cooperation mechanisms to
oversee review and implementation of obligations, and general y limit enforcement measures for
labor disputes to imposition of monetary fines. In the exceptional case of the U.S.-Jordan FTA,
labor and commercial provisions were subject to the same dispute resolution procedures;
however, amid concerns of some Members of Congress, the parties informal y agreed to seek to
resolve any disputes without resorting to trade sanctions.140 Importantly, CAFTA-DR was the first
U.S. FTA to include measures in support of labor capacity building (see “Trade Capacity
Building”).
Many observers view the May 10th Agreement of 2007 as ushering in a “second generation” of
labor provisions in U.S. FTAs, through the obligation to “adopt and maintain” ILO fundamental
rights and principles, and no limits on recourse to dispute settlement.141 U.S. FTAs with
Colombia, Panama, Peru, and South Korea were the first to reflect this structure. Some Members
and stakeholders viewed these agreements as breaking new ground in strengthening labor
provisions; others criticized them for not going far enough.142 At the same time, Members also
raised concerns about potential ramifications of expanded labor provisions for the United States.
During congressional consideration of the U.S.-Peru FTA, one Member saw the labor chapter as
creating, “an unacceptable risk that the United States wil be required to change important

137 NAALC, art. 1.2, Annex 1.
138 USMCA, which entered into force in 2020, supersedes NAALC for future disputes involving the three partners.
139 Steve Charnovitz, The Expanding Labor Dimension of US-Negotiated Regional Trade Agreements: TPP and
USMCA, GW Law, March 2021.
140 Before Congress considered implementing legislation in 2001, then UST R Robert Zoellick and Jordanian
Ambassador Marwan Muasher stated their intent in an exchange of letters that each party “ would not expect or intend
to apply the Agreement’s dispute settlement enforcement procedures…in a manner that results in blocking trade.”
“Jordan Free T rade Agreement Approved by Finance and Ways and Means,” Inside U.S. Trade, July 27, 2001.
141 For more on FT A dispute settlement procedures, see CRS In Focus IF10645, Dispute Settlement in the WTO and
U.S. Trade Agreem ents, by Ian F. Fergusson.
142 For the debate, see “United States-Peru T rade Promotion Agreement Implementation Act,” remarks in the Senate,
Congressional Record, daily edition, vol. 153, no. 184 (December 4, 2007), pp. S14719-S14728.
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provisions of U.S. Federal and state labor law or be subject to trade sanctions.”143 In this view,
Congress’ implementation of such FTAs should provide “explicit safe harbor for U.S. labor law.”
While recent U.S. FTAs subject the labor chapter to the same dispute settlement procedures as
commercial obligations, some Members and stakeholders remain concerned about compliance
with and enforcement of labor provisions, both in terms of U.S. trading partners fulfil ing FTA
obligations and U.S. administrations pursuing enforcement (see “Enforcement Mechanisms and
Labor Disputes”). Efforts to address such concerns as related to the Colombian government’s
implementation led to a negotiated labor action plan in April 2011, which outlined several issue
areas to be addressed before Congress would consider the FTA.144 Issues addressed in the plan
included Colombian government commitments to protect unionists from perceived systemic
violence against them, to bring perpetrators to justice, and to increase the protection of worker
rights. This provided the basis for the first U.S. FTA associated with a separate plan requiring
labor reforms and setting specific benchmarks.
The U.S. bilateral labor plans with Brunei, Malaysia, and Vietnam to supplement the labor
chapter in the proposed Trans-Pacific Partnership (TPP) strengthened this approach and may
inform future options. Such plans mandated specific institutional and legal reforms, as wel as
monitoring mechanisms and a role for the ILO, particularly in the case Vietnam.145 The three
countries were required to meet certain commitments prior to FTA ratification, and the plans were
subject to FTA dispute settlement. In the bilateral plan with Vietnam, certain commitments
regarding the formation of unions were also to be subject to an additional U.S. review mechanism
that al owed for unilateral U.S. suspension of future scheduled tariff reductions under the FTA.146
The terms of the proposed TPP labor chapter, but not the bilateral side agreements, were left
intact for other TPP members following U.S. withdrawal from the agreement in 2017. During
TPP and later USMCA negotiations, some Members also cal ed for a labor plan for Mexico to
address concerns over labor practices. The Mexican government strongly opposed such a plan.
Innovations in the U.S.-Mexico-Canada Agreement (USMCA)
The NAALC side agreement was an innovation of its time and made important strides towards
promoting North American labor cooperation.147 At the same time, some experts and stakeholders

143 Ibid, p. S14722. In this view, concerns were that the lack of definition of what ILO rights entail could leave
interpretation to a dispute panel. Note that while a panel decision could lead a trading partner to retaliate against the
United States for a measure in violation of the FT A, it could not compel the United States to alter its laws. DS decisions
under trade agreements are not considered to be self-executing, i.e., where a federal law or regulation is in conflict and
the Executive branch does not have delegated authority to act, legislation would be needed to comply. Provisions in
FT A implementing legislation typically specify, “ No provision of the Agreement, nor the application of any such
provision to any person or circumstance, which is inconsistent with any law of the United States shall have effect.”
U.S.-Peru T rade Promotion Agreement Implementation Act, P.L. 110-138, §102(a), 19 U.S.C. §3805 note.
144 For detail, see CRS Report RL34470, The U.S.-Colombia Free Trade Agreement: Background and Issues, by M.
Angeles Villarreal and Edward Y. Gracia.
145 Cathleen Cimino-Isaacs, “Labor Standards in the T PP,” in Assessing the Trans-Pacific Partnership: Innovations in
Trading Rules, Volume 2, PIIE Briefing 16-4, Peterson Institute for International Economics, 2016.
146 Section VIII, at https://ustr.gov/sites/default/files/T PP-Final-Text-Labour-US-VN-Plan-for-Enhancement-of-Trade-
and-Labor-Relations.pdf.
147 E.g., see Lance Compa, “T rump, T rade, and T rabajo: Renegotiating NAFT A’s Labor Accord in a Fraught Political
Climate,” Indiana Journal of Global Legal Studies, vol. 26, no. 1 (2019): 263-304; and Gary Clyde Hufbauer and
Jeffrey J. Schott, NAFTA Revisited: Achievem ents and Challenges (Washington: Institute for International Economics,
2005). For information on NAFT A, see CRS Report R42965, The North Am erican Free Trade Agreem ent (NAFTA), by
M. Angeles Villarreal and Ian F. Fergusson.
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criticized the agreement for shortcomings in coverage and implementation, spurring expanded
provisions in subsequent U.S. FTAs and debate during the renegotiation of NAFTA under the
Trump Administration.148 U.S trade officials and some Members frame USMCA as the strongest
of U.S. FTA labor chapters and as a possible template for future U.S. trade agreements.149
USMCA updates NAALC to reflect and build on the labor chapters of U.S. FTAs that follow the
May 10th Agreement approach, with labor provisions included in the core of the agreement, and
subject to full dispute settlement (DS) procedures (see below).150 Reflecting Section 307 of the
Tariff Act of 1930, parties commit to prohibit imports of goods “from other sources produced in
whole or in part by forced or compulsory labor, including forced or compulsory child labor” and
to establish cooperation for the identification and movement of such goods.151 Other new
provisions address violence against workers exercising labor rights, protection of migrant workers
under labor laws, and policies protecting against sex-based employment discrimination.152 In
addition, the labor chapter’s Annex 23-A on Worker Representation in Collective Bargaining
commits Mexico to specific legislative actions, as part of domestic reforms already underway.153
Key changes to USMCA following its signing were negotiated between House Democrats and the
Trump Administration, and affect prospective implementation and enforcement of the labor
chapter (see “Enforcement Mechanisms and Labor Disputes”). Changes to DS procedures include
provisions to prevent an FTA party from blocking the formation of a panel in state-to-state dispute
settlement, and to require the development of rules of evidence.154 Updated language in the labor
chapter obligations also seeks to remove “hurdles” to potential enforcement actions, drawing
from experience in the U.S. dispute loss to Guatemala (see “Outcomes of U.S. FTA Disputes”).155
This includes creating a rebuttable presumption that al eged violations of labor obligations occur
in ‘‘a manner affecting trade or investment,” unless the other party demonstrates otherwise.
A notable change in USMCA is the creation of a new mechanism that supplements state-to-state
DS procedures. The “rapid-response” labor mechanism provides for the enforcement of certain
worker rights at individual facilities, in contrast to general DS, which covers government’s
failures to uphold labor obligations. A panel of independent labor experts may conduct
verifications of compliance at certain facilities in response to al egations of ‘‘denial of rights”
related to freedom of association and collective bargaining. This covers facilities in the United
States and Mexico that (1) are in a “priority sector,” involving manufactured goods, services, or
mining; and (2) produce goods or supplies services traded between the parties.156 With respect to
the United States, a claim can be brought only with respect to a covered facility under an enforced

148 See U.S. Congress, House Ways and Means Committee, Subcommittee on T rade, Mexico’s Labor Reform:
Opportunities and Challenges for an Im proved NAFTA, hearing, 116th Cong., 1st sess., June 25, 2019; and Enforcem ent
in the New NAFTA, hearing, 116th Cong., 1st sess., May 22, 2019.
149 Per UST R T ai, USMCA “includes the most comprehensive, enforceable labor and environmental standards of any
U.S. trade agreement – and, I would argue, any trade agreement .” Testim ony of Am bassador Katherine Tai Before the
House of Ways and Means Com m ittee Hearing on the President’s Trade Agenda, Press release, May 13, 2021.
150 See CRS Report R46793, USMCA: Legal Enforcement of the Labor and Environment Provisions, by Nina M. Hart.
151 USMCA, Article 23.6.
152 USMCA, Articles 23.7-23.9.
153 See CRS In Focus IF11308, USMCA: Labor Provisions, by M. Angeles Villarreal and Cathleen D. Cimino-Isaacs.
154 Rules of evidence, for example, would allow disputing parties to submit anonymous testimony, redacted evidence,
testimony in person or via other means.
155 U.S. Congress, House Committee on Ways and Means, United States-Mexico-Canada Agreement Implementation
Act, report to accompany H.R. 5430, 116th Cong., 1st sess., H.Rept. 116-358 (Washington, DC: GPO, 2019), pp. 4-6.
156 T here is a separate similar mechanism covering claims between Canada and Mexico. See USMCA, Annex 31 -B.
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order of the National Labor Relations Board (NLRB).157 For Mexico, a claim can be brought with
respect to an al eged denial of rights under legislation that complies with Annex 23–A. The
investigation could result in the imposition of tariffs or penalties on the facility, and blocked entry
of imports in the case of multiple offenses. Members of Congress envisioned the mechanism to
support labor reforms undertaken by Mexico, emphasizing its stated purpose was ‘‘to ensure a
remediation of a Denial of Rights … [and] not to restrict trade.’’158
Congress also supplemented USMCA labor provisions with additional monitoring and domestic
procedures established through implementing legislation. For example, an interagency committee,
established in June 2020, is responsible for monitoring compliance with labor obligations,
including implementation of Mexico’s reforms.159 The work of the committee is tied to
enforcement, including through recommending possible dispute settlement actions to USTR. It
also plays a role in the establishment and review of priority sectors under the rapid-response
mechanism, and reviews petitions submitted by stakeholders to assess whether there is a “good
faith” basis to request a review of denial of rights. Congress also specified reporting requirements
and funding for USTR and DOL staff devoted to monitoring and enforcement, including labor
attachés based in Mexico, and for trade capacity building to support Mexico’s reform efforts.
Trade Capacity Building
Trade capacity building (TCB) entails a range of activities that support a country’s ability to
integrate into the global trading system and engage in trade. Per the USTR, TCB is considered a
critical component of U.S. strategy “to enable developing countries to negotiate and implement
market-opening and reform-oriented trade agreements and to improve their capacity to benefit
from increased trade.”160 Within the latest TPA, Congress directed the Executive branch “to work
to strengthen the capacity of United States trading partners to carry out obligations under trade
agreements by consulting with any country seeking a trade agreement with the United States
concerning that country’s laws” including as related to labor, and “to provide technical assistance
to that country if needed.”161 Congress has also played a key role by providing funding and
guidance for TCB through appropriations.
Experts have general y urged policymakers to sustain TCB programs, arguing they are a critical
mechanism for promoting better working conditions and addressing on-the-ground chal enges. In
this regard, considerations include whether countries have the resources and political wil to hire
inspectors and facilitate work site inspections; whether corruption is a problem; and whether
inspectors have authority to assess penalties. In cases where labor enforcement relies on a petition
process to demonstrate violations under U.S. FTAs, concerns involve whether labor groups,
particularly in countries with poor freedom of association and collective bargaining records have
the capacity to investigate and document violations, and adequate knowledge of the processes.

157 Specifically, there must be an enforced order where a U.S. Court of Appeals has issued a final and conclusive decree
requiring compliance with an order issued by the NLRB. Some labor experts contend such conditions translate to fairly
limited applicability to U.S. facilities; Desirée LeClercq, “ Biden’s Worker-Centered T rade Policy: Whose Workers?”
International Economic Law and Policy Blog, May 16, 2021, at https://ielp.worldtradelaw.net/trade_and_labor/.
158 U.S. Congress, Senate Committee on Finance, United States-Mexico-Canada Agreement Implementation Act, report
to accompany H.R. 5430, 116th Cong., 2nd sess., S.Rept. 116-283 (Washington, DC: GPO, 2020), p. 8.
159 UST R, “ Interagency Labor Committee for Monitoring and Enforcement Procedural Guidelines for Petitions
Pursuant to the USMCA,” 85 Federal Register 39257, June 30, 2020.
160 UST R, “T rade Capacity Building,” at https://ustr.gov/issue-areas/trade-development/trade-capacity-building.
161 19 U.S.C. §4201(c).
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Over the past decade, funding for TCB related to labor has fluctuated—in FY2019, total labor-
related activity obligations were $84 mil ion, peaking at $239 mil ion in FY2017 (Table 2).162 In
recent years, trade-related labor activities have been among the highest funded TCB categories,
behind agriculture and/or infrastructure. Activities general y entail (1) improving labor and
workers’ rights; (2) ensuring labor equity and equal access to jobs, particularly for women and
vulnerable groups; (3) building capacity of civil society and worker organizations; (4) reducing
forced labor and child labor; (5) approving labor law compliance and governance; and (6)
assisting with workforce or human capital development.
The U.S. Agency for International Development (USAID) is the primary source of overal TCB
funding, though several agencies support TCB. The Department of Labor is the top provider, by
funding and implementation for labor-related TCB (Figure 3). DOL’s ILAB implements projects,
which focus on efforts to improve labor conditions often in partnership with the ILO. In FY2020,
ILAB engaged with 48 countries through technical assistance or other collaboration,163 and
monitored and reported on labor conditions in over 150 countries. Such engagement contributed
to “concrete actions” taken by over 20 trading partners, including labor improvements in key
export sectors, such as autos in Mexico and sugarcane in the Dominican Republic. As of April
2021, 49 ILAB-funded projects were active worldwide, collectively valued at $230 mil ion.164
Table 2. TCB Assistance, Trade-Related
Figure 3. Trade-Related Labor Obligations
Labor Activities
by Implementing Agency, FY2014-FY2019
Total Obligations
Percent Share of Total
Fiscal Year
(US$ millions)
2009
105
2010
93
2011
91
2012
70
2013
70
2014
103
2015
86
2016
71
2017
239
2018
81
2019
84
Average (2009-19)
99
Source: USAID, Trade Capacity Building

Database, at https://tcb.usaid.gov/.
Source: USAID, Trade Capacity Building Database,
Note: Reports obligations, not appropriations or
at https://tcb.usaid.gov/.
disbursements, which are binding agreements that
Note: Implementing agencies disburse funds to the
wil result in outlays, immediately or in the future.
implementing partners carrying out foreign assistance.
Implementation of U.S. FTAs is one major
component of TCB efforts.165 Much of the labor-related funding has involved CAFTA-DR

162 USAID, T rade Capacity Building Database, at https://tcb.usaid.gov/.
163 U.S. DOL, FY2020 Annual Performance Report, 2021, p. 35.
164 According to CRS calculations, see https://www.dol.gov/agencies/ilab/projects.
165 See, e.g., “T CB Case Studies” in Scott Miller and Daniel F. Runde, Opportunities in Strengthening Trade
Assistance, Center for Strategic and International Studies, February 2015.
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implementation.166 CAFTA-DR includes a specific TCB chapter, with commitments to establish a
TCB committee in recognition that “trade capacity building assistance is a catalyst for the reforms
and investments necessary to foster trade-driven economic growth, poverty reduction, and
adjustment to liberalized trade.”167 Committee tasks include prioritizing projects, coordinating
among donors and other entities, and monitoring and assessing progress in implementing projects.
U.S. FTAs with Colombia, Panama, and Peru also have dedicated TCB chapters. As discussed,
capacity building in Mexico was a focus of USMCA implementing legislation (P.L. 116-113),
which al ocated $180 mil ion to ILAB through 2023 for “worker-focused capacity building” and
other technical assistance projects.168 From 2018-2020, to this end, ILAB provided more than $80
mil ion in grants to Mexico.169
In recent years, legislation has sought to refocus ILAB activities on research, and on
administering and enforcing labor provisions in trade agreements. Several administrations and
some Members of Congress have sought cuts to DOL’s budget, including ILAB’s technical
assistance programs. For example, the Trump Administration’s FY2021 budget request proposed
program decreases of $67 mil ion from the FY2020 enacted funding level ($96.125 mil ion). The
reduction was to reflect “workload decrease associated with the elimination of new grants, as wel
as a reduction in the intensity of other ILAB work activities,” claiming that “grant funding is
spent on promoting worker protection overseas” with many grants “awarded non-competitively”
to the ILO.170 The Biden Administration requested $123.751 mil ion for ILAB for FY2022, an
increase over the FY2021 enacted funding level ($96.125 mil ion) “to support the President’s
trade policy agenda through both technical assistance grants and staff, as wel as resources for the
agency’s forced labor reporting mandate.”171 The majority of the increase is intended for trade-
related worker rights monitoring, enforcement, and capacity building programs.
Biden Administration Trade Policy Priorities
“Putting workers at the center” is a priority of the Biden Administration’s trade policy.172 The
Administration pledged to review past trade policies for impacts on workers, and in particular,
fully enforce labor obligations under existing U.S. trade agreements. Commitments include:
 Self-initiating and advancing petitions under the USMCA rapid-response
mechanism “to ensure workers receive relief through efficient, facility-level
enforcement.”

166 U.S. DOL, ILAB, Office of T rade and Labor Affairs, Progress in Implementing Capacity-Building Provisions under
the Labor Chapter of the Dom inican Republic - Central Am erica - United States Free Trade Agreem ent (Third
Biennial), 2015; UST R, “ CAFT A-DR Labor Capacity Building,” Factsheet, May 2011.
167 CAFT A-DR, Article 19.4.
168 U.S. DOL, “U.S. Department of Labor to Award $20 Million in New Grants to Sup port USMCA Implementation,
Bringing the 2020 T otal to Nearly $50 million,” news release, December 16, 2020, and “ Labor Rights and the United
States-Mexico-Canada Agreement (USMCA),” at https://www.dol.gov/agencies/ilab/our-work/trade/labor-rights-
usmca.
169 U.S. DOL, FY2020 Annual Performance Report, 2021, pp. 33-35.
170 U.S. DOL, FY 2021 Congressional Budget Justification: Departmental Management, 2020, p. DM-41.
171 U.S. DOL, FY2022 Budget in Brief, May 2021, p. 47.
172 UST R, 2021 Trade Policy Agenda and 2020 Annual Report, March 2021, p. 2; UST R, “ Remarks of Ambassador
Katherine T ai Outlining the Biden-Harris Administration’s ‘Worker-Centered T rade Policy,’” June 10, 2021.
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 Crafting new trade policies “to promote equitable economic growth through the
inclusion in trade agreements of strong, enforceable labor standards that protect
workers’ rights and increase economic security.”
 Ensuring trading partners are not al owed “to gain a competitive advantage by
violating workers’ rights and pursuing unfair trade practices.”
 Engaging with al ies to achieve commitments to combat forced labor and
exploitative labor conditions, and increase transparency and accountability in
global supply chains.
 Using full range of trade tools to ensure products of forced labor and exploitative
labor are not imported into the United States, and to combat other unfair labor
practices.
To facilitate these priorities, the Administration aims to create “a more inclusive process … to
understand how trade affects workers,” and improve worker representation in trade policy in the
United States and in multilateral organizations, including the WTO.173
Enforcement Mechanisms and Labor Disputes
As of mid-2021, U.S.-based complaints regarding FTA labor compliance have been initiated and
processed under five FTAs: NAFTA (entry into force 1994, superseded by USMCA in 2020),
U.S.-Bahrain FTA (2006), CAFTA-DR (2006-2009), U.S.-Peru FTA (2009), and U.S.-Colombia
FTA (2012).174 In addition, new labor complaints have been raised under the USMCA, and some
remain pending. As highlighted, the labor provisions subject to dispute settlement (DS) differ
among agreements, as do the relevant procedures and remedies. Trading partners most often seek
to resolve disputes and issues with compliance outside of formal DS.
For some Members and stakeholders, effective enforcement has become a key issue in the debate
over U.S. FTA labor provisions. They have criticized enforcement as “slow and cumbersome,”
and over reliant on the political wil of governments.175 Some also cal for more institutionalized
monitoring and oversight of FTA implementation and country labor practices.176 According to the
U.S. Government Accountability Office (GAO), U.S. agencies have taken steps to strengthen
monitoring and enforcement of FTA labor provisions, but lacked a “strategic approach to
systematical y assess whether partner countries’ conditions and practices are inconsistent with
labor provisions.”177 Chal enges in trading partners, such as limited enforcement capacity and use
of subcontracting, also complicate efforts. Others view the first adjudicated FTA labor dispute as
an important precedent, and evidence that trade-related labor issues are prioritized by U.S.
administrations.178 At the same time, some Members have expressed concerns about opening up
U.S. labor practices to potential chal enges from other trading partners and infringing national
sovereignty through expanded labor clauses and trade enforcement. Other countries and labor

173 “Remarks of Ambassador Katherine T ai,” June 10, 2021.
174 U.S. DOL, ILAB, at https://www.dol.gov/agencies/ilab/our-work/trade/fta-submissions.
175 AFL-CIO, The Trans-Pacific Partnership: Four Countries that Don’t Comply with U.S. Trade Law, 2015, p. 1.
176 U.S. GAO, Trade Enforcement: Information on U.S. Agencies’ Monitoring and Enforcement Resources for
International Trade Agreem ents, GAO-17-399, April 2017.
177 U.S. GAO, Free Trade Agreements: U.S. Partners Are Addressing Labor Commitments, but More Monitoring and
Enforcem ent Are Needed, GAO-15-160, November 2014, p. 40.
178 UST R, “ What T hey’re Saying: U.S. Proceeds with Labor Enforcement Case Against Guatemala,” September 2014.
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groups also criticize some U.S. practices and lack of adherence to labor commitments, which
have driven complaints, such as by Mexico against the United States (see below).
U.S. Process for FTA Labor Complaints
DOL consults and coordinates with USTR and the State Department on labor monitoring,
enforcement and engagement with trading partners (see Text Box).179 The Office of Trade and
Labor Affairs (OTLA) receives and reviews complaints (“submissions”) of al eged violations of
U.S. FTA labor commitments.180 In general, al egations in a submission must meet certain criteria,
raise issues relevant to the labor provisions, and il ustrate a country’s failure to comply with its
obligations.181 If the submission is accepted, OTLA undertakes a review and issues a public report
on its findings, which may include specific recommendations to the FTA partner government and
other recommended actions, including that the U.S. government request consultations. If
consultations do not resolve the complaint, FTA DS procedures may be invoked in certain cases.
Roles of U.S. Agencies in Monitoring and Enforcing FTA Labor Provisions
USTR, DOL, and the State Department have key responsibilities in monitoring implementation of labor
provisions. These roles involve both discrete and shared responsibilities, and formal and informal coordination.
Office of the U.S. Trade Representative (USTR)

Lead negotiator of FTAs, and leads interagency efforts to monitor and enforce trade agreements.

Coordinates and develops the administration’s trade policy by identifying, monitoring, enforcing, and
resolving a range of international trade issues.

Litigates FTA disputes involving the United States.
Bureau of International Labor Affairs, Department of Labor (DOL)

Monitors implementation of FTA labor provisions, including by reviewing and investigating public
complaints, and engaging with partners to resolve questions about FTA labor commitments.

Serves as designated point of contact for implementation of FTA labor provisions, as wel as for the
labor cooperation mechanisms.

Before congressional approval of an FTA, prepares reports for Congress, in consultation with USTR
and State, on FTA partner labor rights and child labor laws.

Responsible for planning, developing, and pursuing cooperative projects related to labor, and
providing trade capacity building assistance to help FTA partners meet their obligations.
Bureau of Democracy, Human Rights, and Labor, Department of State

Coordinates with Foreign Service in-country labor officers, who carry out regular monitoring and
reporting and day-to-day interaction with foreign governments on labor issues related to FTAs.

Produces annual Country Reports on Human Rights Practices, with information on labor practices.

Participates in USTR-led interagency team that negotiates FTA labor provisions, contributes input to
DOL research and analysis, and provides technical assistance funding to promote worker rights.
Source: U.S. GAO, 2014 and 2017.

179 For detail on the enforcement process, see Interagency T rade Enforcement Center, Trade Enforcement: Issues,
Rem edies and Roles, at https://ustr.gov/sites/default/files/T rade-Enforcement_Issues-Remedies-and-Roles.pdf.
180 As discussed, USMCA also has additional procedures and role for the newly-created Interagency Labor Committee
for Monitoring and Enforcement.
181 U.S. DOL, “Submissions under the Labor Provisions of Free T rade Agreements,” at https://www.dol.gov/agencies/
ilab/our-work/trade/fta-submissions; “ Notice of Reassignment of Functions of Office of T rade Agreement
Implementation to Office of T rade and Labor Affairs; Notice of Procedural Guidelines,” 71 Federal Register 76691,
December 21, 2006.
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Outcomes of U.S. FTA Disputes
USMCA superseded the NAALC for labor disputes involving the United States, Canada, and
Mexico. Previously, under NAALC, private parties in the three countries submitted more than 40
petitions with labor complaints. In the United States, OTLA received more than 20 submissions;
it accepted and issued reviews for 13, al involving al egations regarding Mexico’s compliance
(Figure 4).182 Several reviews resulted in the signing of ministerial agreements. Mexico’s OTLA
counterpart issued reports for 11 submissions, al involving concerns over U.S. compliance.
Canada’s OTLA counterpart issued reports for three submissions regarding Mexico, and has two
reviews ongoing (one each involving Mexico and the United States). By issue of concern, the
majority of U.S. submissions against Mexico involved freedom of association, followed by
occupational health and safety, and minimum employment standards. Mexican labor complaints
most frequently involved U.S. protections for migrant workers. These top issues are the subjects
of the first complaints filed under USMCA (see “Ongoing USMCA Labor Disputes”).
Figure 4. Labor Submissions under NAALC, 1994-2020

Source: Created by CRS; submissions under the North American Agreement on Labor Cooperation (NAALC),
at https://www.dol.gov/agencies/ilab/submissions-under-north-american-agreement-labor-cooperation-naalc.
Notes: Submissions often include more than one issue of concern; numbers do not add up to total accepted. In
the U.S. case, “accepted submissions” do not include two accepted for review, but withdrawn by submitter.

182 In one instance, one OT LA report covered two submissions. Figures reported here do not include submissions
declined for review (seven submissions) or withdrawn by the submitter (four).
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Among U.S. FTAs with labor chapters, OTLA has issued seven reviews—one each involving
Bahrain, Colombia, the Dominican Republic, Guatemala, Honduras, and two involving Peru (see
Table A-1). The dispute with Guatemala involved the first formal consultations requested by the
United States and the first to complete arbitration, although other FTA complaints also resulted in
ministerial or informal consultations.
The U.S.-Guatemala labor dispute set a precedent as the first to have been adjudicated through
FTA dispute settlement in U.S. FTAs and global y. The AFL-CIO and six Guatemalan labor
unions filed the complaint, al eging that the Guatemalan government failed to effectively enforce
labor laws with respect to freedom of association, right to organize and bargain collectively, and
provide for acceptable conditions of work, as documented in five separate cases.183 Serious
concerns included impunity for threats and violence against trade unions and unlawful dismissal
of union leaders. The OTLA accepted the submission and, in 2009, issued a report raising several
concerns and making recommendations to address prevailing issues. It noted that Guatemala had
taken some initial steps toward resolving some issues and did not recommend formal bilateral
consultations. Subsequently, the U.S. government requested consultations in 2010 amid concerns
Guatemala had not made progress to “correct systemic failures” in labor law enforcement.184
After failure to reach a resolution, the U.S. government requested establishment of an arbitral
panel, the next step in the DS process. The panel was suspended while the two sides negotiated an
18-point labor enforcement plan in 2013; arbitration resumed after implementation of the plan fel
through. In 2017, the panel issued its final decision. It found that although Guatemala failed to
enforce certain labor laws, the United States did not provide sufficient evidence proving that such
failure was “sustained or recurring” and “in a manner affecting trade.”185
The Guatemala dispute panel provided guidance on the scope and meaning of “effective
enforcement of labor laws.”186 Legal experts suggest that the case outcome revealed the difficulty
of meeting rigorous evidentiary standards and legal standards set in the obligations to
demonstrate a breach of FTA obligations.187 Some U.S. stakeholders and Members of Congress
contested the outcome.188 Concerns over the dispute outcome and perceived limitations of FTA
language led to specific reforms in USMCA labor and DS chapters.
Ongoing USMCA Labor Disputes
As of mid-2021, several labor complaints have been initiated under USMCA, providing the first
tests of the agreement’s enforcement mechanisms. Of note, similar issues were previously raised
under the NAALC. In the first action, in March 2021, Mexican migrant workers and a binational
group of civil society organizations led by the Centro de los Derechos del Migrante, Inc. filed a

183 See UST R, “ In the Matter of Guatemala – Issues Relating to the Obligations Under Article 16.2.1(a) of the CAFT A-
DR,” at https://ustr.gov/issue-areas/labor/bilateral-and-regional-trade-agreements/guatemala-submission-under-cafta-
dr.
184 UST R, “United State T rade Representative Kirk Announces Labor Rights T rade Enforcement Case Against
Guatemala,” Press release, July 2010.
185 Panel report, In the Matter of Guatemala – Issues Relating to the Obligations Under Article 16.2.1(a) of the CAFTA-
DR (June 14, 2017).
186 E.g., T equila J. Brooks, “U.S.-Guatemala Arbitration Panel Clarifies Effective Enforcement Under Labor Provisions
of Free T rade Agreement ,” International Labor Rights Case Law¸ vol. 4, issue 1 (March 2018): 45–51.
187 Ibid.
188 Richard Neal (D-MA) and T rade Subcommittee Ranking Member Bill Pascrell (D-NJ), Press release, June 26, 2017,
at https://neal.house.gov/media-center/press-releases/neal-pascrell-statements-guatemala-labor-report.
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case with the Mexican government al eging sex-based discrimination in the U.S. issuance of
temporary H-2 labor migration visas, in violation of the USMCA labor chapter.189
Two complaints have been filed under USMCA’s rapid-response labor mechanism. In May 2021,
the AFL-CIO with Mexican labor groups and others, filed a complaint against Tridonex, an auto
parts factory located in Matamoros in the state of Tamaulipas, Mexico.190 Following review of the
petition, the Interagency Labor Committee for Monitoring and Enforcement, co-chaired by USTR
and DOL, found “sufficient credible evidence of a denial of rights enabling the good faith
invocation of enforcement mechanisms.”191 As the next stage of the process, it requested that the
Mexican government conduct a 45-day review of the al egations. Also in May 2021, USTR self-
initiated its first dispute, requesting that the Mexican government review whether workers are
being denied their rights at a General Motors (GM) facility in Silao in the state of Guanajuato.192
USTR emphasized the “innovative” mechanism wil facilitate addressing longstanding labor
issues in Mexico, and that the recent action “demonstrates that we wil act when workers in
certain facilities are denied their rights under laws necessary to fulfil Mexico’s labor
obligations.”193 On July 8, 2021, the U.S. and Mexican governments announced settlement of the
dispute, through an agreed course of action to remediate denial of the rights of freedom of
association and collective bargaining rights for workers at the GM facility.194
Issues for Congress
U.S. Trade Agreements and Programs as Vehicles for Improving Labor Rights
Labor commitments in U.S. FTAs have evolved substantial y, culminating with those in the
USMCA. With TPA expiring on July 1, 2021, any potential future reauthorization could provide
Congress with an opportunity to revisit U.S. trade negotiating objectives with respect to labor
issues, as wel as how these provisions are working in practice. As discussed, debates over TPA
authorization often led to key shifts and compromises in U.S. approaches to labor provisions as
Congress assessed the effectiveness of approaches and potential revisions. Several Members and
observers view USMCA labor provisions as a template for future FTAs, while others may seek
different approaches.195 Should TPA be renewed, Congress wil likely debate and legislate on this
issue in determining U.S. principal negotiating objectives on labor for future U.S. FTAs.
One area of potential debate is whether and how labor side agreements covering domestic
commitments at the country level (such as related to the U.S. FTA with Colombia, labor annex
with Mexico, and proposed TPP bilateral labor plans), or whether bilateral enforcement
mechanisms like in USMCA (i.e., rapid-response mechanism) that target specific worker rights,
in addition to core enforceable obligations in the agreement itself, may be pursued in future

189 CDM, “Migrant Worker Women File First Complaint against the U.S. Governm ent Under the United States-
Mexico, Canada Agreement,” Press release, March 23, 2021.
190 “AFL-CIO, SEIU, SNIT IS and Public Citizen Announce Filing of First USMCA ‘Rapid Response Mechanism’
Labor Case to Fight for Mexican Workers Denied Independent Union Rep resentation,” Press release, May 10, 2021.
191 UST R, “United States Seeks Mexico’s Review of Alleged Freedom of Association Violations at Mexican
Automotive Parts Factory,” June 9, 2021.
192 UST R, “United States Seeks Mexico’s Review of Alleged Worker’s Rights Denial at Auto Manufacturing Facility,”
Press release, May 12, 2021.
193 UST R, Testimony of Ambassador Katherine Tai Before the House of Ways and Means Comm ittee Hearing on the
President’s Trade Agenda, Press release, May 13, 2021.
194 U.S. DOL, “US, Mexico announce enforcement of worker protection agreement,” news release, July 9, 2021.
195 Speaker of the House, “ T ranscript of Speaker Pelosi Press Conference Announcing New USMCA Agreement ,”
Press release, December 10, 2019.
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prevailing U.S. FTAs. Congressional examination of how these mechanisms are working wil
help shed light on these approaches, as wel as how trading partners, such as the EU, are
addressing these issues. In this regard, underlying considerations are to what extent trade
agreements should address domestic regimes, as wel as how detailed should Congress be in
proscribing U.S. negotiating objectives. In addition, because many countries with ongoing labor
concerns are not U.S. FTA partners, engagement through trade preference programs and capacity
building activities wil also likely continue to be a primary avenue for addressing labor concerns.
Congress could examine how these approaches have worked and whether there should be
additional changes to these programs or whether other tools should be pursued (see below).
Another issue subject to debate in the evolution of trade-related labor provisions is the extent of
their alignment with ILO core labor standards. Some experts question whether “international y
recognized worker rights” in U.S. trade statutes align with ILO precepts, and others view trade
agreements as fal ing short in not directly binding countries to specific ILO obligations.196 Others
view specific commitments based largely on the 1998 Declaration as sufficient and argue that
trade agreements have made progress in binding such commitments to dispute settlement and
other processes within FTAs. Despite urging from some stakeholders, affirming ILO conventions
seems unlikely as a commitment in U.S. FTAs, given lack of U.S. ratification. Some legislation to
reauthorize GSP in the 117th Congress proposes adding elimination of discrimination in
occupation and employment to the definition of worker rights to better align with the ILO and
USMCA approach.197
Members have increasingly focused labor provisions on discrete issues, such as child labor. In
particular, the treatment of forced labor concerns in U.S. trade policy and FTAs remains an issue
of longstanding congressional interest and has evolved in recent years. As evidenced in a
dedicated USMCA provision to prohibit forced labor imports and enhance regional cooperation,
Congress may continue to use FTA provisions and implementing legislation to align and bolster
other U.S. efforts to counter trade in products made with forced labor. In addition, some Members
emphasize the importance of linking trade negotiations with specific labor concerns. For example,
some viewed the Trump Administration’s 2020 “phase-one” trade deal with China as a missed
opportunity to require the Chinese government to commit to address forced labor in Xinjiang—
similar to the EU’s approach in its proposed bilateral investment deal with China.198
In addition, Congress may consider the role of trade agreements and objectives of labor
provisions in a broader policy context. Some experts have argued for redesigning trade
agreements and conditions of social and developmental policy commitments to advance worker
rights and social inclusivity—i.e., ensuring equitable participation in and distribution of the
benefits of trade.199 In this view, FTA labor obligations should interact with various mechanisms,
such as required or voluntary private efforts to implement corporate social responsibility policies
in global supply chains and intergovernmental efforts led through the ILO. Others emphasize the
limitations of trade agreements and contend that other policy tools, such as domestic social
policies, trade-adjustment mechanisms, and tax policies, offer broader or more appropriate

196 Alston, “Labor Rights Provisions in U.S. T rade Law: ‘Aggressive Unilateralism?’”; T odd N. T ucker, Seven
Strategies to Rebuild Worker Power for the 21 st Century Global Econom y, T he Roosevelt Institute, 2018.
197 “Wyden introduces trade preference bill with new GSP conditions,” Inside U.S. Trade, May 18, 2021.
198 U.S. Congress, House Ways and Means Committee, Enforcing the Ban on Imports Produced by Forced Labor in
Xinjiang, hearing, 116th Cong., 2nd sess., September 17, 2020; House debate, Congressional Record, daily edition, vol.
166, no. 164 (September 22, 2020), p. H4663.
199 Shaffer, “ Retooling T rade Agreements for Social Inclusion.”
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avenues for addressing labor issues and the impacts of trade.200 Some experts have argued for
reversing the trend of steadily expanding the scope of trade agreements, and instead focusing
more narrowly on trade-related behind the border issues, while pursuing standards harmonization
in areas like labor in other fora (see below).201 In this regard, Congress may consider the
effectiveness of FTAs and to what extent trade agreements can or should effectively address
worker rights provisions in relation to other mechanisms.
Multilateral Trade Rules at the WTO and the Role of the ILO
Lack of multilateral trade rules on labor issues has in part limited global alignment on approaches
within trade agreements. Some experts contend there are options for incorporating some rules at
the WTO, but debate continues over the legal, economic and procedural feasibility of various
approaches. Given historical resistance, such issues may not gain traction in the WTO in the near
term; more broadly, the WTO has suffered from lack of political wil among members to reach
consensus and advance new issues on the global trade agenda.202 Some experts contend rather
than expanding labor provisions in trade agreements, a narrower approach that al ows for targeted
actions to be taken against the most egregious, trade-related violations of core labor standards
may be more viable to global cooperation, including among skeptical developing countries.203
Such an approach could leave promotion and enforcement of standards more broadly to other fora
like the ILO. In one approach, USTR recently submitted a proposal to address forced labor in
ongoing WTO multilateral negotiations to prohibit harmful fisheries subsidies.204 One option
might be for Congress to increase its role in building support for such provisions through
legislative resolutions to encourage successful conclusion of these negotiations.205
Given WTO members’ deference to the ILO, Congress might consider assessing the ILO’s role in
promoting core labor standards and principles, as wel as how to enhance U.S. support for the
ILO’s work and strengthen its enforcement mechanisms. Some observers have cal ed for an
enhanced role of the ILO, for example, to more effectively pressure China to mitigate use of
state-sponsored forced labor.206 At the March 2021 meeting of the ILO Governing Body, the
United States, Canada, New Zealand, and UK faulted the ILO’s latest annual report as reflecting
“information on persistent or systemic labor rights deficits global y,” and cal ed on the ILO to
prioritize elimination of forced labor.207 Congress could also encourage the Administration to
elevate forced labor or other labor issues as part of trade discussions in other international fora,
such as the G-7/G-20 and OECD. At the June 2021 G-7 summit, leaders directed trade ministers
“to identify areas for strengthened cooperation and collective efforts” towards eradicating forced

200 See Gordon H. Hanson, “Can T rade Work for Workers?: T he Right Way to Redress Harms and Redistribute Gains,”
Foreign Affairs, May/June 2021. UST R Katherine T ai also has reflected on the role of domestic and other policies in
ensuring “economic security for workers here at home.” “Remarks of Ambassador Katherine T ai,” June 10, 2021.
201 Elliott, Developing a More Inclusive US Trade Policy.
202 See CRS Report R45417, World Trade Organization: Overview and Future Direction, coordinated by Cathleen D.
Cimino-Isaacs.
203 Elliott, Developing a More Inclusive US Trade Policy, p. 23.
204 UST R, “ United States Urges WT O Members to Address Forced Labor on Fishing Vessels in Ongoing Fisheries
Subsidies Negotiations,” Press release, May 26, 2021.
205 E.g., H.Res. 382 and S.Res. 101.
206 Andrew Samet, “Will the ILO Defend China’s Uyghurs?” The Diplomat, August 18, 2020; Janice Bellace and
George Dragnich, “A Path for Business out of the China Forced Labor Dilemma,” The Hill, May 10, 2021.
207 Joint Statement on Prioritizing the ILO Forced Labor Response, April 9, 2021, at https://geneva.usmission.gov/
2021/04/15/joint-statement-on-prioritizing-the-ilo-forced-labor-response/.
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labor in global supply chains.208 Another option is seeking greater harmonization in labor
provisions in bilateral and regional trade agreements among the United States and its al ies and
partners, determining which models may work most effectively. More broadly, given perceived
shortcomings of trade agreements and the ILO, some experts have cal ed for consideration of new
multilateral approaches to advance worker rights issues, such as an agreement modeled on the
Paris Agreement.209
Trading Partner Compliance and U.S. Approaches to Enforcement
Implementation and enforcement of labor provisions of trade agreements and programs remains a
focus for some Members. In this regard, a key issue for Congress is how USTR and DOL assess
compliance with labor provisions and take monitoring and enforcement actions.210 Other
questions relate to the necessary conditions for effective enforcement of labor provisions. The
National Advisory Committee for Labor Provisions of U.S. Free Trade Agreements, which
provides advice to ILAB, reflected on several factors in the context of the CAFTA-DR, such as
fostering domestic agency and political wil in trading partners; ensuring sustainability of
capacity building programs; and strengthening U.S. government coordination in al ocating funds
(see below).211
Congress may also consider to what extent GSP trade sanctions have been effective, and whether
GSP review actions balance the broader policy aim of furthering economic growth and
development of developing country partners with respect for their national sovereignty. In this
regard, a question for Congress is whether U.S. trade policy should pursue greater supplementary
“carrot” approaches based on past success of the sectoral model with Cambodia. For example,
one option Congress could consider is expanding GSP benefits to beneficiary countries that
demonstrate significant progress in advancing core worker rights, rather than potential y
rescinding GSP benefits.
Some in Congress have expressed interest in the effectiveness of NAFTA labor dispute resolution
in particular,212 which led to the changes in USMCA DS procedures. The operation of the new
rapid-response mechanism provides a test case for future U.S. approaches. The Biden
Administration has committed to a more proactive enforcement approach, including self-initiating
labor complaints, as evidenced by action taken in May 2021. The head of ILAB characterized this
action as potential y a “harbinger of future, more proactive actions to come,” noting that “the U.S.
wants to be more engaged, more proactive, more strategic about how we monitor and enforce the
labor commitments in trade agreements.”213 Related issues for Congress include assessing future
priorities for disputes pursued by USTR, how the revised DS mechanisms are implemented, and
whether they prove effective in resolving labor disputes. Some Members and stakeholders have

208 Carbis Bay G7 Summit Communiqué: Our Shared Agenda for Global Action to Build Back Better, June 13, 2021.
209 For more detail, see T ucker, Seven Strategies to Rebuild Worker Power for the 21st Century Global Economy. In the
view of the author, such an agreement could for example, include specific targets for higher unionization rates.
210 ILAB has for example, taken steps to improve stakeholder understanding of the FT A labor submission process,
developed intra-agency standard operating procedures, which emphasize the value of monitoring trips to FT A partners,
and streamlined processes for handling petitions. See, U.S. GAO, “Recommendations for Executive Action,” at
https://www.gao.gov/products/gao-15-160.
211 Recommendations on how the U.S. Government Can Facilitate Implementation of the CAFTA -DR White Paper,
October 13, 2011, at https://www.dol.gov/agencies/ilab/trade/agreements/nac.
212 For example, see H.Res. 132.
213 Rebecca Rainey, Doug Palmer, and Eleanor Mueller, “Q&A: T hea Lee of the Bureau of International Labor
Affairs,” Politico Pro, July 1, 2021.
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also expressed concerns about the new mechanism, contending that facilities and companies
under investigation are not adequately informed by the U.S. government on the al egations of
complaints.214 Depending on outcomes, Congress may consider encouraging USTR to modify the
mechanisms, or seek changes to the underlying labor obligations within future TPA legislation.
More broadly, the Biden Administration has emphasized resorting to the “full range of trade
tools” for labor enforcement. Reflecting the Administration’s commitment to fully enforce labor
obligations, the requested FY2022 budget increase for ILAB is largely intended for “trade-related
worker rights monitoring, enforcement and trade capacity building programs to match the scope
and ambition of the President’s trade agenda.”215 A key question for Congress is whether this may
entail pursuing new enforcement approaches that depart from past practice,216 such as use of
Section 301 of the Trade Act of 1974, proposed by some labor groups.217 The issue of forced
labor in particular has been an increased focus of congressional debates over trade enforcement,
and has been emphasized by the Administration as a major priority. Members have engaged on
these issues through hearings on Section 307 implementation, requests for investigations into
forced labor imports, and proposed legislation.218 Congress may consider how to address ongoing
chal enges, such as the adequacy of CBP processes, resources, and interagency coordination for
achieving expanded enforcement.219 In addition, a key issue is how these efforts can complement
multilateral approaches, for example, Congress may examine ways to translate the recent G-7
statement on forced labor into concrete action, or pursue an enhanced role for the ILO. Other
considerations include prospects and impact of greater regional or industry-wide enforcement
actions, including as a tool for mitigating forced labor in Xinjiang, as proposed by legislation
(H.R. 1155/S. 65). Debate over Section 307 enforcement has also brought attention to U.S.
importers’ compliance and supplier relationships, prompting legislation (e.g., H.R. 1155, H.R.
2072) that mandates disclosure and transparency of supply chains.
Labor-Related Trade Capacity Building and Interagency Coordination
Experts and policymakers have increasingly supported trade capacity building activities as a
supplement to trade agreements and trade preference programs, as wel as an important “carrot”
to improving compliance with labor obligations. Many experts view institutional deficiencies,
lack of resources, and under-development as primary obstacles to improving labor standards, and
thus consider cooperation through technical assistance and capacity building as first-best
instruments. The USMCA implementing legislation highlights this approach to complement FTA
labor provisions with funding and mechanisms for implementing reforms in Mexico. Oversight of
the implementation and outcomes of such funding wil be a key near-term issue for Congress.

214 “Deputy UST R nominee: Labor, environment ‘sidelined’ in trade for too long,” Inside U.S. Trade, June 25, 2021;
Chamber of Commerce, Subject: USMCA Labor Council Meeting, letter to UST R and U.S. DOL, June 23, 2021.
215 U.S. DOL, FY2022 Budget in Brief, p. 47.
216 For example, the Biden Administration in June 2021 announced a new “trade strike force” to combat unfair trade
practices that have eroded critical supply chains. See https://go.usa.gov/x6Kgm.
217 In 2004, the AFL-CIO submitted the first petition brought on behalf of labor under Section 301 to challenge worker
rights in China. Albert B. Crenshaw, “ AFL-CIO Goes After China on Labor,” Washington Post, March 17, 2004.
218 “Wyden, Brown Call on Department of Homeland Security to Fully Enforce the Law, Crack Down on Imported
Cocoa Produced With Child Labor,” Press release, July 19, 2019; U.S. Congress, House Ways and Means Committee,
Enforcing the Ban on Im ports Produced by Forced Labor in Xinjiang , hearing, 116th Cong., 2nd sess., September 17,
2020.
219 For discussion, see U.S. GAO, Forced Labor Imports: DHS Increased Resources and Enforcement Efforts, but
Needs to Im prove Workforce Planning and Monitoring, GAO-21-106, October 27, 2020.
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Congress has also made strengthening trading partner capacity a priority in TPA legislation and
through funding. Several issues confront Congress in debates over TCB, often marked by
disagreements over al ocating funds, policy coordination of U.S. agencies, and evaluation of
projects. Past appropriations debates (and proposed budget cuts) centered on questions of how
ILAB distributes grants across countries and purposes. Some Members have requested reviews of
ILAB’s international technical assistance and advocated for greater systematic evaluation of
outcomes.220 Others have raised concerns about the al ocation of funds to specific labor issues,
such as promotion of union rights abroad.221 Congress may be interested in how ILAB continues
to learn from past grants through impact evaluations to better direct funds towards effective
approaches to technical assistance. More broadly, Congress may consider to what extent
improvements have been made in coordinating TCB activities across U.S. agencies and what
further reforms may be needed. Some analysts have encouraged reforms to enhance the
effectiveness and efficiency of U.S. efforts, including creation of a formal interagency process,
and Members have proposed legislation in previous sessions aimed at achieving such results.222

220 Per congressional requests, the September 2014 GAO report, International Labor Grants: DOL’s Use of Financial
and Perform ance Monitoring Tools Needs to Be Strengthened, examines how ILAB: (1) ensures financial
accountability of its technical assistance funds, (2) monitors performance of projects, and (3) evaluates projects and
uses the results of evaluations. T he May 2014 GAO report, International Labor Grants: Labor Should Im prove
Managem ent of Key Award Docum entation, examines how ILAB develops projects and selects funding recipients.
221 E.g., Senate Finance Committee, “Republican Senators Hatch and Alexander Demand Answers on Use of T axpayer
Dollars to Fund Foreign Labor Unions,” April 2015.
222 Miller and Runde, Opportunities in Strengthening Trade Assistance. Past proposals include, for example, S. 2201
(114th Congress), and H.R. 2067 (116th Congress).
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Appendix A. Past U.S. Submissions Under Labor Chapters of U.S. FTAs
Table A-1. U.S. Submissions under Labor Chapters of U.S. FTAs
Date
Filed
Submission
Submitting Party
Description
Actions Taken
4-23-2008
U.S. Submission
AFL-CIO and six
Concerns over enforcement of labor laws
06-12-2008 – Submission accepted for review.
2008-01 (Guatemala) Guatemalan labor
by the Guatemalan government, including
01-16-2009 – Public report of review issued, raising concerns
unions
with regard to freedom of association, right but noting Guatemala’s steps toward resolving some issues.
to organize and bargain col ectively, and
acceptable conditions of work in five
07-30-2010 – U.S. government requested consultations with
separate cases. Al egations included
Guatemala after its actions did not address concerns raised in
impunity for threats and violence against
the report. Consultations held in late 2010, with subsequent
trade unions, unlawful dismissal of union
meeting of the Free Trade Commission in 2011.
leaders, and failure to protect rights in
08-09-2011 – U.S. requested establishment of an arbitral
cases of changed ownership in an
panel; panel suspended during negotiations over labor plan.
enterprise.
04-11-2013 – Agreed to 18-point labor enforcement plan.
09-18-2014 – Panel process resumed.
06-26-2017 – Arbitral panel issued decision finding the
evidence did not prove an FTA violation.
12-29-2010 U.S. Submission
Peruvian National
Concerns that the employer, the National
07-19-2011 – Submission accepted for review.
2010-03 (Peru)
Union of Tax
Superintendent of Tax Administration
08-30-2012 – Report issued, finding Peruvian government
Administration
(SUNAT)—executive branch agency that
fulfil ed its duties, while SUNAT failed to comply with the law
Workers (SINAUT)
oversees customs and tax administration—
in some respects. Legal ambiguity prevented finding that
failed to effectively recognize union’s right
SUNAT or the government failed to comply with or enforce
to col ective bargaining.
labor laws. Formal consultations not recommended.
4-21-2011
US Submission 2011-
AFL-CIO
Concerns regarding the right to freedom of 06-10-2011 – Submission accepted for review.
01 (Bahrain)
association and discrimination, in particular
12-20-2012 – Public report of review issued, finding some
related to dismissals and discrimination
evidence that supported the al egations. Cooperative labor
against trade unionists that organized and
consultations recommended.
participated in a general strike in 2011.
05-06-2013 – U.S. government requested consultations.
07-15 to 7-16-2013 – Consultations began.
06-22 to 6-23-2014 – Second round held. Dialogue ongoing.
CRS-41

Date
Filed
Submission
Submitting Party
Description
Actions Taken
12-22-2011 U.S. Submission
Father Christopher
Concerns regarding the Dominican
02-22-2012 – Submission accepted for review.
2011-03 (Dominican
Hartley
Republic’s (DR) government failure to
09-27-2013 – Public report of review issued, finding some
Republic)
enforce labor laws within the Dominican
evidence to support al egations, with recommendations to
sugar industry, in particular regarding the
address concerns.
right of association, right to organize and
bargain col ectively, forced and child labor,
04-2014 to 05-2018 – U.S. government engaged at senior and
and acceptable conditions of work.
technical levels with DR to address concerns. Six reviews
issued on implementation of recommendations.
03-26-2012 U.S. Submission
AFL-CIO and 26
Concerns regarding the Honduras
05-14-2012 – Submission accepted for review.
2012-01 (Honduras)
Honduran unions and government failure to enforce labor laws
02-27-2015 – Public report of review issued, finding some
civil society
with respect to right to freedom of
evidence supporting the al egations, with seven
organizations
association and col ective bargaining, child
recommendations to address the concerns. Consultations
labor, and acceptable conditions of work,
recommended through the contact points designated in FTA
within apparel and auto parts manufacturing labor chapter to develop a labor action plan.
sectors, agricultural sector, and enterprises
at the Port of Cortés.
03-2015 to 10-2015 – Series of bilateral meetings and
tripartite meetings held with business/labor groups.
12-09-2015 – Both sides signed monitoring and action plan.
Agreed to hold bimonthly technical meetings to discuss
implementation and an annual senior officials meeting.
03-14-2016 – Review issued of progress toward plan’s
benchmarks, with U.S. commitment to continue monitoring.
07-23-2015 U.S. Submission
International Labor
Concerns regarding failure to effectively
09-21-2015 – Submission accepted for review.
2015-01 (Peru)
Rights Forum, Perú
enforce labor laws in non-traditional
03-18-2016 – Public report of review issued, with evidence
Equidad, and seven
export and agricultural sectors related to
that supported al egations and six recommendations.
Peruvian worker's
rights to freedom of association and
organizations
col ective bargaining. Specific concerns
12-16-2016 – Review issued for first periodic review of Peru’s
included permitting unlimited consecutive
progress toward addressing concerns.
renewal of short-term contracts.
04-20-2018 – Second periodic review issued; U.S. commits to
continue to monitor and assess progress by Peru.
CRS-42

link to page 38
Date
Filed
Submission
Submitting Party
Description
Actions Taken
05-16-2016 U.S. Submission
AFL-CIO and five
Concerns regarding failure to effectively
07-15-2016 – Submission accepted for review.
2016-02 (Colombia)
Colombian workers'
enforce labor laws related to the rights to
01-11-2017 – Public report of review issued, finding evidence
organizations
freedom of association and col ective
that supported the al egations, with 19 recommendations to
bargaining, and to adopt and maintain these
address concerns raised. Consultations recommended
rights in statutes, regulations, and practices,
through designated contact points.
as wel as failure to comply with procedural
guarantees as outlined in the labor chapter,
04-2017 to 09-2017 – Three meetings held between contact
in particular within the petroleum and
points to discuss issues identified in the report.
sugar sectors. Specific concerns included
01-08-2018 – Report issued for first periodic review of
sub-contracting arrangements that evade
progress toward implementing report recommendations, with
labor protections and failure to pursue
U.S. commitment to monitor and assess progress by
employers for rights violations.
Colombia toward addressing concerns over 2019.
Source: U.S. Department of Labor, “Submissions under Labor Provisions of Free Trade Agreements,” at https://www.dol.gov/agencies/ilab/our-work/trade/fta-
submissions.
Notes: Does not include labor disputes involving the United States and Mexico under the NAALC (see Figure 4) and ongoing USMCA disputes.
CRS-43

Worker Rights Provisions and U.S. Trade Policy

Author Information

Cathleen D. Cimino-Isaacs

Analyst in International Trade and Finance

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