Trade Promotion Authority (TPA) Renewal: Core Labor Standards Issues

Trade Promotion Authority (TPA) Renewal: Core Labor Standards Issues

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Pr
epared for Members and Committees of Congress

›Š?Žȱ›˜–˜?’˜—ȱž?‘˜›’?¢ȱǻǼȱŽ—Ž Š•Ǳȱ˜›ŽȱŠ‹˜›ȱ?Š—?Š›?œȱ œœžŽœȱ
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Trade promotion authority (TPA), formerly known as “fast-track” authority, is scheduled to expire
July 1, 2007. With it will expire the authority: (a) that Congress grants the President to enter into
certain trade agreements, and (b) for Congress to consider the agreements’ implementing
legislation under expedited procedures. Currently, the Administration is negotiating a number of
trade agreements that may not be completed before the current TPA is set to expire. If these
activities are to continue, TPA/fast-track renewal may be a central issue in the 110th Congress.
Within the debate, a major issue is expected to be whether to include as a principal negotiating
objective in trade agreements, “enforceable core labor standards.”
Two TPA/fast-track authorities have incorporated labor provisions. The first, the Omnibus Trade
and Competitiveness Act of 1988 (OTCA), which expired in 1994, included the broad, general
objective: “to promote worker rights.” The North American Free Trade Agreement, with its labor
side agreement, was negotiated under OTCA. The second and current TPA authority with labor
provisions, the Trade Act of 2002, includes protections for labor, modified by protections for
country governments, businesses and investors. Seven free trade agreements (FTAs)—with Chile,
Singapore, Australia, Morocco, Bahrain, Oman, and the Dominican Republic and Central
America—were negotiated under this authority. All have only one enforceable labor requirement:
that each country not fail to enforce its own labor laws in a manner affecting trade between the
parties. (In contrast to this, the U.S.-Jordan FTA, negotiated in 2000 and approved in 2001
without TPA/fast track authority, includes enforceable labor provisions.)
Major options for labor provisions in renewed TPA/fast-track authority focus on whether
principal negotiating objectives should include “enforceable core labor standards.” Supporters
argue that including these could help: (1) slow the offshoring of certain U.S. jobs; (2) protect
foreign workers against exploitative corporate behavior; (3) support the ability of workers to
share in the gains from international trade; and (4) fend off an international “race to the bottom”
based on labor costs. Opponents argue that (1) core labor standards should be promoted by the
International Labor Organization, not by trade agreements; (2) as countries develop, they adopt
higher labor standards on their own; (3) stronger worker protections could discourage
international investment; and (4) labor standards are disguised protectionism. History shows that
with or without FTAs, trade will likely continue to grow.
This report examines issues relating to TPA/fast-track labor provisions in the larger context of
global labor issues. It: (1) identifies the players and their positions; (2) tracks the enforceable
labor provisions in TPA/fast-track laws and the FTAs negotiated under them; (3) presents some
legislative options for new TPA/fast-track labor provisions; and (4) sets out arguments for and
against enforceable core labor standards. Finally, it looks at possible outcomes and implications
of the various legislative options, and summarizes key activity on the TPA renewal issue. This
report will be updated as events warrant.

˜—?›Žœœ’˜—Š•ȱŽœŽŠ›Œ‘ȱŽ›Ÿ’ŒŽȱ

›Š?Žȱ›˜–˜?’˜—ȱž?‘˜›’?¢ȱǻǼȱŽ—Ž Š•Ǳȱ˜›ŽȱŠ‹˜›ȱ?Š—?Š›?œȱ œœžŽœȱ
ȱ
˜—?Ž—?œȱ
Introduction ..................................................................................................................................... 1
Which Set of Core Labor Standards? ........................................................................................ 2
Who Cares About Enforceable Core Labor Standards, and Why? .................................................. 3
Labor Advocates........................................................................................................................ 3
Business Groups........................................................................................................................ 3
Developing Countries................................................................................................................ 4
U.S. Executive Branch .............................................................................................................. 4
Key Labor Provisions in TPA/Fast-Track Laws and in Trade Agreements Negotiated
under Them .................................................................................................................................. 5
Omnibus Trade and Competitiveness Act of 1988: NAFTA..................................................... 5
No TPA/Fast-Track Law: The Jordan Agreement ..................................................................... 5
Bipartisan Trade Promotion Authority Act of 2002: Seven Trade Agreements ........................ 6
Legislative Options for TPA/Fast-Track Renewal........................................................................... 7
Option 1: No TPA/Fast-Track Renewal .................................................................................... 8
Option 2: TPA/Fast-Track Renewal with No Enforceable Labor Provisions............................ 8
Option 3: TPA/Fast-Track Labor Provisions Similar to Those under the Expiring
Authority ................................................................................................................................ 8
Option 4: TPA/Fast-Track Labor Provisions Setting out Enforceable Core Labor
Provisions as Principal Negotiating Objectives ..................................................................... 8
The 2001 Rangel Bill ...................................................................................................................... 8
Arguments For and Against Enforceable Core Labor Standards as a Principal Negotiating
Objective ...................................................................................................................................... 9
General Arguments.................................................................................................................... 9
For Enforceable Core Labor Standards as a Principal Negotiating Objective .................... 9
Against .............................................................................................................................. 10
Arguments Related to U.S. Workers ........................................................................................11
For Enforceable Labor Standards as a Principal Negotiating Objective............................11
Against ...............................................................................................................................11
Arguments Related to Foreign Workers ...................................................................................11
For Enforceable Labor Standards as a Principal Negotiating Objective............................11
Against ...............................................................................................................................11
Sovereignty Issues................................................................................................................... 12
For Enforceable Core Labor Standards as a Principal Negotiating Objective .................. 12
Against .............................................................................................................................. 12
Arguments on the Definition of Core Labor Standards........................................................... 12
For Using the ILO Definition of Core Labor Standards ................................................... 12
Against .............................................................................................................................. 12
Another Option: The U.S.-Jordan FTA Approach............................................................. 13
Possible Outcomes and Implications............................................................................................. 13
Most Recent Developments........................................................................................................... 14

˜—?›Žœœ’˜—Š•ȱŽœŽŠ›Œ‘ȱŽ›Ÿ’ŒŽȱ

›Š?Žȱ›˜–˜?’˜—ȱž?‘˜›’?¢ȱǻǼȱŽ—Ž Š•Ǳȱ˜›ŽȱŠ‹˜›ȱ?Š—?Š›?œȱ œœžŽœȱ
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Figure 1. TPA/Fast-Track Laws and Their Labor Provisions, and FTAs and Their
Enforceable Labor Provisions, 1974-2007 ................................................................................... 7

Š‹•Žœȱ
Table A-1. Worker Rights Provisions in TPA/Fast-Track Authority, 1974-2007 .......................... 17
Table A-2. Key Labor Provisions in FTAs Negotiated under Various TPA/Fast-Track
Laws ........................................................................................................................................... 18
Table A-3. Enforceable Labor Provisions Included in H.R. 3019 (Rangel, 107th Congress) ........ 19

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Appendix. Tables........................................................................................................................... 17

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Author Contact Information .......................................................................................................... 19

˜—?›Žœœ’˜—Š•ȱŽœŽŠ›Œ‘ȱŽ›Ÿ’ŒŽȱ

›Š?Žȱ›˜–˜?’˜—ȱž?‘˜›’?¢ȱǻǼȱŽ—Ž Š•Ǳȱ˜›ŽȱŠ‹˜›ȱ?Š—?Š›?œȱ œœžŽœȱ
ȱ
—?›˜?žŒ?’˜—ȱ
Trade promotion authority (TPA), formerly known as “fast track” authority, is scheduled to expire
July 1, 2007. With it will expire the authority that Congress grants the President to enter into
certain trade agreements, and the authority for Congress to consider implementing legislation for
them under expedited procedures. The Administration is still negotiating a number of trade
agreements that may not be completed before the TPA is set to expire. Thus, TPA/fast-track
renewal may be a central issue in the 110th Congress if these activities are to continue.1
Within the TPA/fast-track renewal debate, a major issue is expected to be which labor provisions
to set forth as as “principal negotiating objectives”—that is, which labor provisions to set forth as
“a priority for negotiators to seek” in trade agreements.2 Two sets of provisions are probable
candidates.
One, supported by labor advocates, is expected to be: to ensure that a party does not fail to
enforce core labor standards in a manner affecting trade. Related provisions could (1) identify a
set of mutually agreed upon “core labor standards” (defined in the next section) and (2) provide
that violation of these standards would be subject to enforcement under the single set of dispute
settlement procedures that would be applicable to all disputes.
An alternative is expected to be the current principal negotiating objective: to ensure that a party
does not fail to enforce its own labor laws, commonly referred to as the “enforce-your-own”
standard. This provision would be enforceable under current dispute settlement procedures that
call for treating principal negotiating objectives “equally.”
The difference between the two approaches reflects criticism by labor advocates that, in general,
labor provisions in FTAs negotiated so far: (1) lack the enforceability of commercial provisions;
(2) “clearly fail to meet some congressional negotiating objectives [for trade agreements and]
barely comply with others”; (3) “represent a big step back” from both the U.S.-Jordan FTA
(negotiated and approved during a hiatus when TPA/fast-track authority had expired), and from
U.S. unilateral trade preference programs such as the Generalized System of Preferences (GSP);
and (4) “completely exclude obligations for governments to meet such international standards as
worker rights.”3 The issue of including enforceable core labor standards as a principal negotiating
objective also reflects a strategy to change the way labor interests are mirrored in trade
agreements by tightening the blueprint for them.
Opponents argue that provisions in FTAs negotiated under the current TPA: (1) are the strongest
labor provisions attached to FTAs to date; (2) are the product of bilateral negotiation; and (3) both
depend on and reflect mutual agreement by negotiating countries over which provisions to
include. Opponents also argue: (4) that enforceable core labor standards would raise sovereignty
issues.

1 For a general discussion on TPA renewal, see CRS Report RL33743, Trade Promotion Authority (TPA): Issues,
Options, and Prospects for Renewal, by J. F. Hornbeck and William H. Cooper.
2 The Trade Act of 2002 does not specifically define “principal negotiating objective.” However, the Conference
Report, H.Rept. 107-624, p. 229, defines it using the words quoted above.
3 See, for example, U.S. Chile Free Trade Agreement, Report of the Labor Advisory Committee for Trade Negotiations
and Trade Policy (LAC), February 28, 2003, p. 3. (The LAC consisted of 58 members of various unions.)
˜—?›Žœœ’˜—Š•ȱŽœŽŠ›Œ‘ȱŽ›Ÿ’ŒŽȱ
ŗȱ

›Š?Žȱ›˜–˜?’˜—ȱž?‘˜›’?¢ȱǻǼȱŽ—Ž Š•Ǳȱ˜›ŽȱŠ‹˜›ȱ?Š—?Š›?œȱ œœžŽœȱ
ȱ
This report examines the issues raised by labor advocates and responses by opponents. It does so
in the larger context of how and where enforceable labor provisions in TPA/fast-track authority
and the trade agreements negotiated under them intersect with global labor issues. Thus, it first
identifies the stakeholders who care (positively or negatively) about enforceable labor provisions,
and their positions on the issue. After that, it: (1) tracks the enforceable labor provisions in
TPA/fast-track laws and the FTAs they have spawned; (2) presents some legislative options for
new TPA/fast-track provisions relating to enforceable labor provisions; and (3) sets out arguments
for and against enforceable core labor standards from the perspective of the parties that could be
affected by the standards. Finally, it looks at possible outcomes and implications of the various
legislative options.
For an overview of most recent developments on this issue, please turn to the last section before
the Appendix.
‘’Œ‘ȱŽ?ȱ˜?ȱ˜›ŽȱŠ‹˜›ȱ?Š—?Š›?œǵȱ
Labor advocates have been proposing that renewed TPA/fast-track authority include, as a
principal negotiating objective for trade agreements, a handful of “enforceable” “core labor
standards,” or “internationally recognized worker rights.”
The terms “internationally recognized worker rights” or “core labor standards” are technically
defined in separate ways, by U.S. Trade law (the Trade Act of 1974, Sec. 507), and the
International Labor Organization (ILO, a United Nations organization).4 Both definitions are
almost identical, and share four standards or rights: (1) the right to organize, (2) the right to
bargain collectively, (3) prohibition of forced labor, and (4) protections for child labor including
the “worst forms of child labor.”5 They differ on the fifth standard. U.S. law identifies it as: (5)
labor standards pertaining to minimum wages, maximum hours, and occupational safety and
health. ILO conventions define it as: (5) freedom from employment discrimination.6
In recent years these terms have become somewhat confusing because the current TPA law
included in the Trade Act of 2002 and trade agreements negotiated under it have adopted the U.S.
list of “internationally recognized worker rights” as the definition of the term “core labor
standards.” Consequently, this report will use the term “core labor standards” to refer to either
list, and will mention “ILO core labor standards,” “U.S. internationally recognized worker
rights,” or “U.S. list” only when referring to standards defined by either specific source.

4 For the ILO definition of “core labor standards” and a table of countries that have signed onto each, see the ILO table
of “Ratifications of the Fundamental human rights Conventions by country” at http://www.ilo.org/ilolex/english/docs/
declworld.htm which includes direct links to the texts of each core labor standard.
5 The “worst forms of child labor” include the employment of children for purposes including prostitution,
pornography, drug trafficking, armed conflict, and forced labor.
6 The Trade Act of 1974 refers to the U.S. list as “internationally recognized worker rights.” The ILO refers to its list as
“core labor standards.” The current TPA authority in the Bipartisan Trade Promotion Authority Act of 2002, Title XXI
of the Trade Act of 2002, combines the ILO name and the U.S. list, defining the U.S. list as “core labor standards.”
˜—?›Žœœ’˜—Š•ȱŽœŽŠ›Œ‘ȱŽ›Ÿ’ŒŽȱ
Řȱ

›Š?Žȱ›˜–˜?’˜—ȱž?‘˜›’?¢ȱǻǼȱŽ—Ž Š•Ǳȱ˜›ŽȱŠ‹˜›ȱ?Š—?Š›?œȱ œœžŽœȱ
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?Š—?Š›?œǰȱŠ—?ȱ‘¢ǵȱ
Š‹˜›ȱ?Ÿ˜ŒŠ?Žœȱ
Labor advocates appear to have two objectives in promoting some type of enforceable core labor
standards—one international, and the other domestic.
Internationally, the objective of labor advocates seemingly is humanitarian: to promote the
protection of workers around the world, particularly those in developing countries, where global
investment converges to take advantage of cheap labor. In such countries adults or even children
may have to work long hours, under unhealthy and unsafe conditions, with few personal or
hygienic freedoms, for low pay. Moreover, they may not be permitted the basic right to form
unions and bargain collectively with their employers to improve those conditions.7
Domestically, the objective of labor advocates is seemingly more economic: to help “level the
playing field “between U.S. and foreign workers, so that U.S. workers can compete with those in
developing countries on a more equitable basis. A more equitable playing field, they argue, would
provide at least some incentive for businesses to find ways to remain and/or expand in the United
States instead of looking for ways to “offshore” parts of their operations to countries where labor
costs are cheaper. Estimates on U.S. jobs “lost” to international trade and offshore outsourcing are
hard to come by. However, jobs at risk have expanded from blue collar to white collar and from
the manufacturing to high end service sector and research and development jobs, and now
include, in addition to call center and data entry jobs, higher skill professional jobs in fields such
as engineering, computer chip design, nanotechnology, and medical test analysis, that have
become important in the knowledge-based economy.
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Opposite labor advocates are many business groups whose main objective is typically to support
the passage of TPA/fast-track authority in order to facilitate the expansion of U.S. multinational
corporations abroad—their most important avenue for continued growth. Both TPA/fast-track
authority and trade agreements typically include many protections for investors.
For eight years between 1994 and 2002, however, the issue of whether or not to include any kind
of enforceable labor provisions in trade agreements was a major point of contention in the debate
over renewal of TPA/fast-track authority. During that time, some TPA/fast-track renewal bills
would have prohibited some types of labor provisions in trade agreements negotiated under
them.8 Ultimately, a 2001 report prepared for the U.S. Trade Representative by the Business
Roundtable, made up of chief executive officers from roughly 200 major companies, led the way

7 For a summary on working conditions in various countries, see the State Department’s Country Reports on Human
Rights Practices, updated yearly. Each year the volume updates reports on worker rights conditions in many countries
around the world.
8 See CRS Report RL31178, Trade Promotion Authority (Fast-Track): Labor Issues (Including H.R. 3005 and H.R.
3009), by Mary Jane Bolle.
˜—?›Žœœ’˜—Š•ȱŽœŽŠ›Œ‘ȱŽ›Ÿ’ŒŽȱ
řȱ

›Š?Žȱ›˜–˜?’˜—ȱž?‘˜›’?¢ȱǻǼȱŽ—Ž Š•Ǳȱ˜›ŽȱŠ‹˜›ȱ?Š—?Š›?œȱ œœžŽœȱ
ȱ
toward TPA/fast-track renewal in 2002 when it said, “in pursuing labor (and environmental)
objectives in trade and investment negotiations, the United States must grant our trade negotiators
the flexibility to negotiate.” It stressed that “International labor and environmental issues have
emerged as the principal stumbling blocks. The Business Roundtable believes. . . that the issue is
no longer whether they should be addressed in international trade and investment negotiations,
but rather how to address them constructively.”9
ŽŸŽ•˜™’—?ȱ˜ž—?›’Žœȱ
Developing countries care about how enforceable core labor standards affect (either positively or
negatively) their ability to attract investment. In 1996, at the World Trade Organization (WTO)
Singapore Ministerial (a meeting of ministers of WTO members), developing countries, which
formed a majority there, voted down the U.S. proposal for a committee to study the relationship
between worker rights and trade. They did so because they were afraid formation of such a
committee could lead to the imposition of enforceable labor standards that could undercut their
comparative advantage in low-cost labor. As a result of these votes, the Singapore Declaration
(the final document summarizing what they decided) named the ILO as the “competent body to
set and deal with” international labor standards.10 The ILO has as its main enforcement
mechanism the tools of consensus and persuasion.
ǯǯȱ¡ŽŒž?’ŸŽȱ›Š—Œ‘ȱ
The Administration’s position on enforceable labor standards, although it reflects the principal
negotiating objectives of the FTA/fast-track laws, has shifted with various presidents and various
circumstances. It typically mirrors the interests of the party it represents. The Clinton
Administration was supportive of enforceable labor standards in trade agreements. First, it
negotiated the labor side agreement to the North American Free Trade Agreement (NAFTA).
Then, it pushed for studying the link between worker rights and trade at the 1997 Singapore
Ministerial as mentioned above. Next, it promoted worker rights protections at the subsequent
1999 Ministerial in Seattle, Washington. The conference there was cut short for a number of
reasons including issues between developed and developing countries.11 Finally, in 2000, it
negotiated the U.S.-Jordan FTA that included technically enforceable U.S. and ILO core labor
standards in the body of the agreement. However, in an exchange of letters, Jordan’s ambassador
to the United States and the U.S. Trade Representative agreed to resolve any disputes that might
arise without resorting to sanctions.
The Bush Administration has negotiated nine FTAs with one enforceable labor provision in the
body of each agreement. More recently, however, the Administration has reportedly signaled a
willingness to renegotiate labor provisions in the Peru and Colombian FTAs (awaiting
congressional consideration), to strengthen enforceable labor provisions.12

9 Business Round Table. The Case for U.S. Trade Leadership: the United States is Falling Behind, February 9, 2001, p.
4, 20.
10 From the Singapore Declaration, signed by representatives of WTO countries present at the first meeting of Ministers
of WTO countries in Singapore, December, 1996, contained in the WTO Annual Report, 1997.
11 See WTO Protests in Seattle, 1999. Free Trade and Globalization, February 18, 2001.
12 Veroneau Signals U.S. Willingness to Renegotiate Labor in Peru, Colombia FTAs. Inside U.S. Trade, January 17,
2007.
˜—?›Žœœ’˜—Š•ȱŽœŽŠ›Œ‘ȱŽ›Ÿ’ŒŽȱ
Śȱ

›Š?Žȱ›˜–˜?’˜—ȱž?‘˜›’?¢ȱǻǼȱŽ—Ž Š•Ǳȱ˜›ŽȱŠ‹˜›ȱ?Š—?Š›?œȱ œœžŽœȱ
ȱ
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›Š?Žȱ?›ŽŽ–Ž—?œȱŽ?˜?’Š?Ž?ȱž—?Ž›ȱ‘Ž–ȱ
Two of the three TPA/fast-track laws passed by Congress over the past 30 years have included
labor provisions. These TPA/fast-track laws have facilitated the negotiation and approval of a
total of eight FTAs so far, as follows:
–—’‹žœȱ›Š?ŽȱŠ—?ȱ˜–™Ž?’?’ŸŽ—ŽœœȱŒ?ȱ˜?ȱŗşŞŞǱȱȱ
The first TPA/fast-track law to include labor provisions as principal negotiating objectives was
the Omnibus Trade and Competitiveness Act of 1988 (OTCA, P.L. 100-418). Its full list of labor
principal negotiating objectives is included in the Table A-1. Most importantly, these include the
general but vague requirement: “ to promote worker rights.” This requirement led to the first
labor provisions attached to a bilateral or regional trade agreement.13 The agreement was NAFTA,
and labor provisions were included in a labor side agreement, not in the body of the agreement
itself. The labor side agreement included (1) labor provisions with limited enforceability, detailed
below; (2) its own dispute resolution procedures for labor issues; and (3) a dollar cap on
penalties.
The labor provisions in the NAFTA labor side agreement required that each Party (the United
States, Mexico, and Canada) enforce its own labor laws and standards. Only two of the five core
labor standards, however, were to be enforceable, and one of these is only partially enforceable.
The enforceable standards are for: (a) child labor protections; and (b) two components of labor
standards: minimum wages and occupational safety and health. Among standards not enforceable
under the NAFTA labor side agreement were a country’s own laws protecting the rights of
workers to organize and bargain collectively.
˜ȱȦŠœ?Ȭ›ŠŒ”ȱŠ Ǳȱ‘Žȱ ˜›?Š—ȱ?›ŽŽ–Ž—?ȱ
After the OTCA, there was an eight-year hiatus when there was no TPA/fast-track law, 1994-
2002. During this time, the Administration negotiated and Congress approved the U.S.-Jordan
FTA. This agreement included a number of labor provisions in the body of the agreement that
were technically enforceable through the agreement’s single dispute resolution procedure. Some
of these provisions were later echoed in the Bipartisan Trade Promotion Authority Act of 2002,
discussed below. The most important such labor provision specified that parties “shall not fail to
effectively enforce” their own labor laws “through a sustained or recurring course of action or
inaction in a manner affecting trade between the parties.” Labor laws were defined as the U.S.
list, recognizing the right of each party to exercise enforcement discretion. Parties also agreed to:
(a) strive to ensure that both ILO and U.S. core labor standards are recognized and protected by
domestic law; and (b) recognize the right of each party to establish, modify, and improve its labor
standards. For more details on these provisions, see Table A-2.

13 Article XX(e) of the General Agreement on Tariffs and Trade (GATT), 1969, establishing the predecessor to the
World Trade Organization (WTO), permits discrimination against products produced by prison labor.
˜—?›Žœœ’˜—Š•ȱŽœŽŠ›Œ‘ȱŽ›Ÿ’ŒŽȱ
śȱ

›Š?Žȱ›˜–˜?’˜—ȱž?‘˜›’?¢ȱǻǼȱŽ—Ž Š•Ǳȱ˜›ŽȱŠ‹˜›ȱ?Š—?Š›?œȱ œœžŽœȱ
ȱ
’™Š›?’œŠ—ȱ›Š?Žȱ›˜–˜?’˜—ȱž?‘˜›’?¢ȱŒ?ȱ˜?ȱŘŖŖŘǱȱŽŸŽ—ȱ›Š?Žȱ
?›ŽŽ–Ž—?œȱ
The second TPA law with principal negotiating objectives for labor was the Bipartisan Trade
Promotion Authority Act of 2002 (Title XXI of the Trade Act of 2002, P.L. 107-210), which is set
to expire July 1, 2007. Its principal negotiating objectives for labor (repeated in Table A-1)
include (1) “to ensure that a party does not fail to effectively enforce its own labor laws”; and (2)
“to strengthen the capacity of U.S. trading partners to promote respect for core labor standards.”
Modifying these provisions are others in the list of principal negotiating objectives for labor that
offer protections for governments, businesses, and investors: (3) to recognize that parties to a
trade agreement retain the right to exercise discretion in the allocation of enforcement resources;
and (4) to ensure that labor practices of the parties do not arbitrarily or unjustifiably discriminate
against U.S. exports or serve as disguised barriers to trade.
Under this TPA seven trade agreements have been negotiated and approved.14 These are with
Chile, Singapore, Australia, Morocco, Bahrain, Oman, and a single agreement with five Central
American Countries (Costa Rica, El Salvador, Guatemala, Honduras, and Nicaragua) and the
Dominican Republic, known as CAFTA-DR. In addition, this TPA has facilitated agreements with
two other countries (Peru and Colombia) which are awaiting congressional action.15 Labor
provisions in the various agreements are detailed in Table A-2.
For dispute resolution, the principal negotiating objective is (5) “to seek provisions that treat
[all—i.e. including those for labor and those for commercial disputes] U.S. principal negotiating
objectives equally with respect to the ability to resort to dispute settlement and the availability of
equivalent dispute settlement procedures and remedies.” In what is seen by labor advocates as a
departure from this language, two characteristics stand out. First, each of the seven trade
agreements has only one labor provision subject to the agreement’s dispute settlement process—
that each country must enforce its own labor laws. Second, procedures for labor disputes differ in
several respects from those for commercial disputes and include a cap on monetary penalties.
Opponents, argue, however, that the treatment of labor and commercial disputes is equal because
the procedures and remedies are “equivalent.”

14 CRS reports addressing these FTAs include the following: CRS Report RL31356, Free Trade Agreements: Impact
on U.S. Trade and Implications for U.S. Trade Policy, by William H. Cooper; CRS Report RS21846, U.S.-Bahrain
Free Trade Agreement, by Martin A. Weiss; CRS Report RL31870, The Dominican Republic-Central America-United
States Free Trade Agreement (CAFTA-DR), by J. F. Hornbeck; CRS Report RS21560, Free Trade Agreements with
Singapore and Chile: Labor Issues, by Mary Jane Bolle; CRS Report RL32375, The U.S.-Australia Free Trade
Agreement: Provisions and Implications, by William H. Cooper; CRS Report RL33328, U.S.-Oman Free Trade
Agreement, by Mary Jane Bolle; CRS Report RS20968, Jordan-U.S. Free Trade Agreement: Labor Issues, by Mary
Jane Bolle; CRS Report RS21464, Morocco-U.S. Free Trade Agreement, by Raymond J. Ahearn; CRS Report
RS22159, DR-CAFTA Labor Rights Issues, by Mary Jane Bolle; and CRS Report 97-861, NAFTA Labor Side
Agreement: Lessons for the Worker Rights and Fast-Track Debate, by Mary Jane Bolle.
15 See CRS Report RS22521, Peru Trade Promotion Agreement: Labor Issues, by Mary Jane Bolle and M. Angeles
Villarreal; and CRS Report RS22419, U.S.-Colombia Trade Promotion Agreement, by M. Angeles Villarreal.
˜—?›Žœœ’˜—Š•ȱŽœŽŠ›Œ‘ȱŽ›Ÿ’ŒŽȱ
Ŝȱ

›Š?Žȱ›˜–˜?’˜—ȱž?‘˜›’?¢ȱǻǼȱŽ—Ž Š•Ǳȱ˜›ŽȱŠ‹˜›ȱ?Š—?Š›?œȱ œœžŽœȱ
ȱ
Figure 1. TPA/Fast-Track Laws and Their Labor Provisions, and FTAs and Their
Enforceable Labor Provisions, 1974-2007

Source: Data gathered from various TPA laws and FTA implementation laws.
Note: Dates reflect years that Congress approved the document.
Figure 1 summarizes, along a time line, the congressionally-passed sequence of TPA/fast-track
authorities (in larger type) and the trade agreements negotiated under them (smaller type). Also
listed are the key labor provisions in each.
Ž?’œ•Š?’ŸŽȱ™?’˜—œȱ?˜›ȱȦŠœ?Ȭ›ŠŒ”ȱŽ—Ž Š•ȱ
When discussing legislative options for renewal of the TPA/fast-track authority, it is important to
keep in mind several things: First, TPA/fast-track authority represents statutory requirements for
presidential negotiation of FTAs, rather than requirements for ultimate provisions in the FTAs.
Second, a number of factors may converge to determine the ultimate labor provisions in FTAs,
including (1) the labor agenda of the negotiating Parties; (2) the ability of the United States to
persuade potential partner countries to agree to various provisions; (3) the political makeup of the
Congress which must vote the agreements up or down; and (4) the level of acceptance of labor
provisions by the business community. While there may be any number of possible legislative
options to address the issue of enforceable labor provisions in TPA/fast-track renewal, four are
discussed below.
˜—?›Žœœ’˜—Š•ȱŽœŽŠ›Œ‘ȱŽ›Ÿ’ŒŽȱ
ŝȱ

›Š?Žȱ›˜–˜?’˜—ȱž?‘˜›’?¢ȱǻǼȱŽ—Ž Š•Ǳȱ˜›ŽȱŠ‹˜›ȱ?Š—?Š›?œȱ œœžŽœȱ
ȱ
™?’˜—ȱŗǱȱ˜ȱȦŠœ?Ȭ›ŠŒ”ȱŽ—Ž Š•ȱ
Without the protection of TPA/fast-track authority, with its prohibition on amendments to FTAs
and its requirement for limited debates, some argue, foreign countries may be less inclined to
negotiate trade agreements with the United States. This is because foreign countries would know
that anything they agreed upon could possibly be amended by Congress and sent back for further
negotiation. On the other hand, Congress would be more involved in negotiating any agreements
the Administration desired to pursue.
™?’˜—ȱŘǱȱȦŠœ?Ȭ›ŠŒ”ȱŽ—Ž Š•ȱ ’?‘ȱ˜ȱ—?˜›ŒŽŠ‹•ŽȱŠ‹˜›ȱ
›˜Ÿ’œ’˜—œȱ
TPA/fast-track renewal that does not include enforceable labor provisions as a principal
negotiating objective would likely be viewed by some as a step back from the expiring TPA/fast-
track authority. On the other hand, this does not preclude the President from negotiating labor
provisions.
™?’˜—ȱřǱȱȦŠœ?Ȭ›ŠŒ”ȱŠ‹˜›ȱ›˜Ÿ’œ’˜—œȱ’–’•Š›ȱ?˜ȱ‘˜œŽȱž—?Ž›ȱ
?‘Žȱ¡™’›’—?ȱž?‘˜›’?¢ȱ
Current TPA/fast-track principal negotiating objectives include three key elements plus their
modifying qualifications, mentioned earlier: (1) to ensure that a party does not fail to enforce its
own labor laws; (2) to strengthen the capacity of U.S. trading partners to promote respect for core
labor standards; and (3) to seek provisions that treat [all] U.S. principal negotiating objectives
equally with respect to the ability to resort to dispute settlement, the availability of equivalent
dispute settlement procedures, and the availability of equivalent remedies.
™?’˜—ȱŚǱȱȦŠœ?Ȭ›ŠŒ”ȱŠ‹˜›ȱ›˜Ÿ’œ’˜—œȱŽ??’—?ȱ˜ž?ȱ—?˜›ŒŽŠ‹•Žȱ
˜›ŽȱŠ‹˜›ȱ›˜Ÿ’œ’˜—œȱŠœȱ›’—Œ’™Š•ȱŽ?˜?’Š?’—?ȱ‹“ŽŒ?’ŸŽœȱ
Option four includes principal negotiating objectives that would go one step beyond those in
option 3, and actually list “enforceable core labor standards” as a principal negotiating objective.
They could also include language in principal negotiating objectives for dispute resolution
procedures to ensure that all principal negotiating objectives (i.e. for both labor and commercial
issues) are fully disputable and covered by a single dispute resolution process.
‘ŽȱŘŖŖŗȱŠ—?Ž•ȱ’••ȱ
One possible configuration of option 4 was reflected in a TPA/fast-track renewal bill introduced
by Representative Charles Rangel in the 107th Congress in 2001 (H.R. 3019). H.R. 3019 would
have included enforceable labor standards defined by a short list of ILO core labor standards as
principal negotiating objectives for labor. It would also have included (a) protections and
assistance for governments; and (b) a single set of dispute resolution procedures relating to all
principal negotiating objectives.
˜—?›Žœœ’˜—Š•ȱŽœŽŠ›Œ‘ȱŽ›Ÿ’ŒŽȱ
Şȱ

›Š?Žȱ›˜–˜?’˜—ȱž?‘˜›’?¢ȱǻǼȱŽ—Ž Š•Ǳȱ˜›ŽȱŠ‹˜›ȱ?Š—?Š›?œȱ œœžŽœȱ
ȱ
More specifically, in H.R. 3019, these concepts translated into the following provisions (further
detailed in Table A-3): (1) to negotiate enforceable rules that provide for the adoption and
enforcement of a handful of standards that read like ILO core labor standards; (2) to establish as a
trigger for invoking the dispute settlement process either: (a) failure to effectively enforce one’s
own domestic labor standards; or (b) waiver or derogation from domestic labor standards in order
to attract investment or gain a competitive advantage; and (3) a single dispute resolution
procedure for all types of complaints. Its would also have contained the following types of
provisions relating to enforcement assistance, flexibility, and monitoring: (a) the right of Parties
to exercise enforcement discretion; (b) the right of parties to establish, adopt, or modify their own
labor standards consistent with core labor standards; (c) phased-in compliance for least-developed
countries; (d) a program of technical assistance; and (e) regular review of adherence to core labor
standards.
›?ž–Ž—?œȱ˜›ȱŠ—?ȱ?Š’—œ?ȱ—?˜›ŒŽŠ‹•Žȱ˜›ŽȱŠ‹˜›ȱ
?Š—?Š›?œȱŠœȱŠȱ›’—Œ’™Š•ȱŽ?˜?’Š?’—?ȱ‹“ŽŒ?’ŸŽȱ
“Should enforceable core labor standards be included as a principal negotiating objective?” is
likely to be the main labor issue for Congress to consider in TPA/fast-track renewal. If the answer
to this question is “yes,” the follow-up question would be, “Which definition or definitions of
core labor standards should be included?” While the AFL-CIO and other labor advocates argue in
favor of ILO core labor standards or their equivalents, the U.S. Council for International Business
(USCIB) argues against this position, saying it could require that U.S. laws be changed to comply.
The model of the U.S.-Jordan FTA offers a third option.
In the arguments below, those against enforceable labor standards as principal negotiating
objectives are generally in favor of continuing the enforce-your-own labor standards in the
current TPA. The ILO is not represented in this debate. It typically does not take a position on
specific legislation including TPA/fast-track renewal. This is because its official role is that of
promoting worker rights through technical assistance and consensus building.16
Ž—Ž›Š•ȱ›?ž–Ž—?œȱ
˜›ȱ—?˜›ŒŽŠ‹•Žȱ˜›ŽȱŠ‹˜›ȱ?Š—?Š›?œȱŠœȱŠȱ›’—Œ’™Š•ȱŽ?˜?’Š?’—?ȱ‹“ŽŒ?’ŸŽȱ
Those in favor of a principal negotiating objective for FTA/fast-track legislation that calls for
strong enforceable labor standards in the body of the agreement include the AFL-CIO,17 Human
Rights Watch,18 and the International Labor Rights Fund.19
Human Rights Watch argues that “the debate over TPA/fast-track renewal presents a unique and
important opportunity to think creatively on protecting worker rights in the context of trade,

16 CRS conversation with ILO Washington staff in the Spring of 2006.
17 CRS conversation with Thea Lee, Policy Director of the AFL-CIO, January 16, 2007.
18 CRS conversation with Carol Pier, Labor Rights and Trade Senior Researcher, Human Rights Watch, January 16,
2007.
19 CRS conversation with Bama Althreya, Executive Director of the International Labor Rights Fund, January 16, 2007.
˜—?›Žœœ’˜—Š•ȱŽœŽŠ›Œ‘ȱŽ›Ÿ’ŒŽȱ
şȱ

›Š?Žȱ›˜–˜?’˜—ȱž?‘˜›’?¢ȱǻǼȱŽ—Ž Š•Ǳȱ˜›ŽȱŠ‹˜›ȱ?Š—?Š›?œȱ œœžŽœȱ
ȱ
learning from the example of the U.S.-Cambodia Textile Agreement.20 The U.S.-Cambodia
Textile Agreement rewards compliance with local labor laws and international standards with an
increase in export quotas to the United States.
Labor advocates traditionally argue that enforceable core labor standards in trade agreements can
define the line between comparative advantage and “social dumping”—competing by denying
worker rights. Such denial, they argue, ends up in a “race to the bottom,” as workers all over the
world compete against each other for scarce jobs. They also argue that labor standards do not
interfere with natural comparative advantage in developing countries because labor standards are
only one basis for comparative advantage. Others are: (a) abundance of available workforce; (b)
skills and education level of the available labor force; (c) infrastructure; (d) level of technological
development of the country; and (e) natural resource base.21
?Š’—œ?ȱ
The USCIB is the American affiliate of the International Chamber of Commerce, the International
Organization of Employers, and the Business and Industry Advisory Committee to the OECD. Its
membership includes some 300 leading U.S. companies, professional services firms, and
associations. It argues for the continuation of the enforce-your-own standard and against
enforceable core labor standards as a principal negotiating objective. This is because it supports
and promotes an open system of global commerce in which businesses can flourish and contribute
to economic growth, human welfare, and protection of the environment.22
Those against principal negotiating objectives that call for enforceable core labor standards in
trade agreements also typically argue that the enforce-your-own standards model provides a more
direct, less encumbered path to economic growth. In addition, most developing countries have
few resources to devote to labor standards enforcement, given the many competing needs for use
of scarce resources. Meanwhile, once a developing country is more economially developed and
relatively near full employment, workers typically have the clout to begin to demand better
protection from their governments on their own. Imposing core labor standards on developing
countries too soon, some argue, could: (1) interfere with their comparative advantage in cheap
labor; and (2) amount to protectionism—the imposition of an additional set of non-tariff
barriers—when the purpose of trade agreements is to reduce trade barriers and stimulate trade and
investment.

20 CRS conversation with Carol Pier, op. cit. The U.S.-Cambodia Textile Agreement provides for a 6% minimum annual
quota increase for Cambodia textile imports, but allows the United States to raise quota limits up to an additional 18%
if working conditions in that sector substantially comply with local labor laws and international standards. Source:
Labor Rights Protections in CAFTA, A Human Rights Watch briefing paper, October, 2003.
21 See CRS Report 96-661, Worker Rights Provisions and Trade Policy: Should They Be Linked?, by Mary Jane Bolle.
22 CRS communication from Adam B. Greene, Vice President, Labor Affairs and Corporate Responsibility, USCIB,
January 18, 2007.
˜—?›Žœœ’˜—Š•ȱŽœŽŠ›Œ‘ȱŽ›Ÿ’ŒŽȱ
ŗŖȱ

›Š?Žȱ›˜–˜?’˜—ȱž?‘˜›’?¢ȱǻǼȱŽ—Ž Š•Ǳȱ˜›ŽȱŠ‹˜›ȱ?Š—?Š›?œȱ œœžŽœȱ
ȱ
›?ž–Ž—?œȱŽ•Š?Ž?ȱ?˜ȱǯǯȱ˜›”Ž›œȱ
˜›ȱ—?˜›ŒŽŠ‹•ŽȱŠ‹˜›ȱ?Š—?Š›?œȱŠœȱŠȱ›’—Œ’™Š•ȱŽ?˜?’Š?’—?ȱ‹“ŽŒ?’ŸŽȱ
Labor advocates argue that a principal negotiating objective calling for enforceable labor
standards can help level the playing field for U.S. workers and make them more competitive
internationally.
?Š’—œ?ȱ
Others argue that there are better ways to help U.S. workers than to try to level the playing field,
which, at best, may only slow the offshore movement of some U.S. jobs. A better way, they argue,
may be to expand trade adjustment assistance benefits, educational benefits, or other training and
retraining programs to cover all displaced workers, and help them transition into new careers
regardless of whether the job loss resulted from trade or technology. Still others might argue that
the need or desire to earn a living is often incentive enough to encourage workers displaced by
offshoring to find new employment.
›?ž–Ž—?œȱŽ•Š?Ž?ȱ?˜ȱ˜›Ž’?—ȱ˜›”Ž›œȱ
˜›ȱ—?˜›ŒŽŠ‹•ŽȱŠ‹˜›ȱ?Š—?Š›?œȱŠœȱŠȱ›’—Œ’™Š•ȱŽ?˜?’Š?’—?ȱ‹“ŽŒ?’ŸŽȱ
Labor advocates argue that in order for workers to become consumers, they must share in the
gains of increasing productivity and economic expansion, and that enforceable core labor
standards can help promote these gains.
?Š’—œ?ȱ
Opponents argue that real gains in standard of living come from rising productivity, not
artificially imposed labor standards including minimum wages. In addition some workers do not
want enforceable core labor standards because these, they argue, could limit their ability to
maximize their earnings through overtime hours.
Opponents also argue that enforceable labor standards are not needed in principal negotiating
objectives because other resources besides trade agreements are available to encourage countries
to help raise labor standards to protect foreign workers. These include (1) U.S. trade preference
programs which require that beneficiary countries either currently afford or be taking steps to
afford their workers internationally recognized worker rights;23 (2) the ILO which offers technical
support to countries to help them adopt and enforce core labor standards; (3) international labor
groups which serve as “watchdogs” bringing abusive labor conditions to light in the radio, print,
and film/video media; (4) evolutionary forces in countries characterized by workers themselves

23 U.S. trade preference programs include the Generalized System of Preferences (GSP), the Caribbean Basin
Economic Recovery Act (CBERA), the Caribbean Basin Trade Partnership Act (CBTPA), the Andean Trade
Preference Act (ATPA), and the African Growth and Opportunity Act (AGOA.) In some cases, the U.S. government
has withdrawn or is anticipating withdrawal of preferential trade status from countries after an FTA with them has gone
into effect.
˜—?›Žœœ’˜—Š•ȱŽœŽŠ›Œ‘ȱŽ›Ÿ’ŒŽȱ
ŗŗȱ

›Š?Žȱ›˜–˜?’˜—ȱž?‘˜›’?¢ȱǻǼȱŽ—Ž Š•Ǳȱ˜›ŽȱŠ‹˜›ȱ?Š—?Š›?œȱ œœžŽœȱ
ȱ
insisting on better labor conditions as their economies grow; (5) codes of conduct for
multinational corporations which provide some level of accountability for corporations doing
business in developing countries; and (6) U.S. government grants for improving labor standards
and their enforcement through “trade capacity building.”
˜ŸŽ›Ž’?—?¢ȱ œœžŽœȱ
˜›ȱ—?˜›ŒŽŠ‹•Žȱ˜›ŽȱŠ‹˜›ȱ?Š—?Š›?œȱŠœȱŠȱ›’—Œ’™Š•ȱŽ?˜?’Š?’—?ȱ‹“ŽŒ?’ŸŽȱ
Those in favor of enforceable core labor standards as a principal negotiating objective could
argue that the ILO already requires that countries comply with ILO core labor standards as a
condition of remaining members in good standing, even if they do not formally approve the ILO
conventions.24
?Š’—œ?ȱ
Those against enforceable core labor standards as a principal negotiating objective might argue
that including enforceable ILO core labor standards as principal negotiating objectives could
come very close to interfering with national sovereignty. They might also point out that under the
ILO, a country’s failure to adhere to core labor standards is not punishable with sanctions. Such
observers would be likely to support, as an alternative, the enforce-your-own standards in the
current TPA/fast-track authority.
›?ž–Ž—?œȱ˜—ȱ?‘ŽȱŽ?’—’?’˜—ȱ˜?ȱ˜›ŽȱŠ‹˜›ȱ?Š—?Š›?œȱ
One option for the definition of core labor standards is the ILO definition. Those against this
option could be in favor of the U.S. definition of “internationally recognized worker rights.” Still
others could be in favor of a more flexible definition that could accommodate a country’s
compliance with the spirit and/or details of either the ILO or the U.S. definition, or both.
˜›ȱœ’—?ȱ?‘Žȱ ȱŽ?’—’?’˜—ȱ˜?ȱ˜›ŽȱŠ‹˜›ȱ?Š—?Š›?œȱ
The AFL-CIO is strongly in favor of enforceable ILO core labor standards as a principal
negotiating objective, arguing that the ILO conventions are more current than U.S. internationally
recognized worker rights.25 Human Rights Watch, while not arguing for either ILO core labor
standards or U.S. internationally recognized worker rights by name, argues that the definition of
core labor standard must include employment discrimination (which is in the ILO but not the U.S.
definition.)
?Š’—œ?ȱ
If the ILO definition is adopted, foreign governments could hold existing U.S. labor laws up to
scrutiny, arguing that they don’t totally comply with ILO Core Labor Standards. In fact, the

24 About the Declaration (on Fundamental Principals and Rights at Work). ILO website at http://www.ilo.org.
25 CRS conversation with Thea Lee, op. cit.
˜—?›Žœœ’˜—Š•ȱŽœŽŠ›Œ‘ȱŽ›Ÿ’ŒŽȱ
ŗŘȱ

›Š?Žȱ›˜–˜?’˜—ȱž?‘˜›’?¢ȱǻǼȱŽ—Ž Š•Ǳȱ˜›ŽȱŠ‹˜›ȱ?Š—?Š›?œȱ œœžŽœȱ
ȱ
United States has ratified only two conventions (one on forced labor and one on the worst forms
of child labor).26 Accordingly, the USCIB argues that many U.S. labor laws would need to be
changed to come into compliance with the ILO definition of core labor standards. U.S. law would
particularly need to be amended, the USCIB argues, in such areas as forced labor, minimum age
for employment, and employment discrimination. This conclusion was reached through a number
of studies by the presidentially appointed Tripartite Advisory Panel on International Labor
Standards (TAPILS)—a research group made up of USCIB as a representative of business, the
AFL-CIO representing labor, and the U.S. government.27
—˜?‘Ž›ȱ™?’˜—Ǳȱ‘ŽȱǯǯȬ ˜›?Š—ȱȱ™™›˜ŠŒ‘ȱ
The enforceable labor provisions in the Jordan FTA (included in Table A-2), negotiated and
approved when there was no TPA/fast-track coverage, represent a third option for the definition
of core labor standards. The Jordan FTA carries what many observers consider the strongest labor
provisions yet. All labor provisions are located in the body of the agreement and all are fully
enforceable.28 Under the U.S.-Jordan FTA, Parties agree to: (1) Reaffirm obligations under the
ILO and strive to ensure that both these labor principles and “internationally recognized worker
rights” are recognized and protected by domestic law. Parties also: (2) agree to not fail to
effectively enforce their own labor laws in a manner that affects trade between the Parties; (3)
agree to strive to ensure that they do not waiver or derogate from their own labor laws in order to
encourage trade with the other party; (4) recognize the right of each party to establish, adopt, or
modify its labor laws and regulations, and strive to ensure that its laws provide for labor standards
consistent with [U.S. defined] internationally recognized worker rights; and (5) recognize that
each party retains enforcement discretion with respect to other matters deemed to have higher
priority.
Others argue that while the dispute resolution procedures for the Jordan agreement do not
preclude a broad array of sanctions for non-compliance, most of the obligations in the Jordan
agreement are “hortatory” or strongly urged rather than mandates. Thus, there is only one
obligation that may be enforced, and a party wishing to complain over the existence and
administration of labor laws would need to make the more difficult case that government conduct
“severely distort[s] the balance of trade benefits” or “substantially undermine[s] fundamental
objectives of [the] Agreement.”29
˜œœ’‹•Žȱž?Œ˜–ŽœȱŠ—?ȱ –™•’ŒŠ?’˜—œȱ
Whether TPA/fast-track is renewed, and whether the negotiation of enforceable core labor
standards is included in any such renewal, international trade is likely to continue to expand in
both volume and complexity. If TPA/fast-track renewal is proposed and debated, the issue of
enforceable core labor standards is likely to remain important to labor advocates, business groups,

26 See ILO table of ratifications at http://www.ilo.org/ilolex/english/docs/declworld.htm.
27 CRS communication from Adam B. Greene, op. cit.
28 However, in anticipation of and just prior to congressional floor consideration of the Jordan agreement, the U.S.
Ambassador from Jordan Marwan Muasher and the U.S. Trade Representative Robert Zoellick, exchanged letters
agreeing to resolve any disputes that might arise without resort to sanctions.
29 See Article 17(1)(a)(iii) of the U.S.-Jordan FTA. This is often referred to as a “non-violation” case.
˜—?›Žœœ’˜—Š•ȱŽœŽŠ›Œ‘ȱŽ›Ÿ’ŒŽȱ
ŗřȱ

›Š?Žȱ›˜–˜?’˜—ȱž?‘˜›’?¢ȱǻǼȱŽ—Ž Š•Ǳȱ˜›ŽȱŠ‹˜›ȱ?Š—?Š›?œȱ œœžŽœȱ
ȱ
the U.S. government, and foreign governments, for various reasons, as efforts are made to find a
compromise position.
If enforceable core labor standards were to be adopted as a principal negotiating objective in
TPA/fast-track authority, and if enforceable core labor standards were then to be negotiated into
trade agreements approved by Congress, the inclusion of the enforceable standards could move
TPA/fast-track authority along its evolutionary path to a new level of protection for U.S. and
foreign workers. Business advocates, however, could continue to hold concerns that such
standards could interfere with their economic efficiency.
The economic effects of any enforceable core labor standards in any TPA/fast-track renewal on
U.S. workers, foreign workers, and businesses, however, would likely be small, and would
depend on a number of factors including 1) the extent to which enforceable core labor standards
were adopted and implemented in trade agreements; 2) the number of trade agreements affected;
3) the magnitude of U.S. trade with countries affected by any such agreements; and 4) the extent
of actual enforcement of any such standards in trade agreements. In addition, the effects from any
of these four factors could be dwarfed by any shifts in the value of the dollar that might occur
relative to other currencies.
If enforceable core labor standards were to be included in any renewed TPA/fast-track authority
and were then to be included in trade agreements negotiated thereunder, many challenges would
remain with regard to enforcement. Foreign governments typically have many competing needs
for scarce resources besides protecting the health and safety of their workers. In addition, the
Office of the U.S. Trade Representative and the Commerce Department, working together to
process trade disputes, would have to choose which disputes to pursue in order to make the best
use of scarce agency resources. If core labor standards were to be enforced, businesses would
then have to face a decision as to what impact, if any, this would have on their investment
decisions.
If enforceable core labor standards were adopted as a principal negotiating objective in TPA/fast-
track legislation, whether or not the United States would need to make any changes to its labor
laws could depend on which definition of core labor standards were to be adopted. It is likely that
if “enforceable core labor standards” were to be identified as a principal negotiating objective,
they would be defined in such a way that no changes in U.S. law might be required.
If TPA/fast-track authority is not renewed, or if it should be renewed without enforceable core
labor standards, a number of ways remain to promote labor standards and protect worker rights.
These include standards currently incorporated into U.S. trade preference programs; continuing
efforts of the ILO to promote core labor standards; the efforts of various labor advocates and
international labor “watchdog” groups; economic development forces in various countries which
eventually lead to protections of the rights of workers; codes of conduct guiding the actions of
corporations in protecting the rights of international workers; and U.S. government “trade
capacity building” grants which help to improve labor standards in developing countries.
˜œ?ȱŽŒŽ—?ȱŽŸŽ•˜™–Ž—?œȱ
In April, 2007, three months before the expiration of TPA, House Ways and Means and
Committee chairman Charles Rangel and Senate Finance Committee Chairman Max Baucus
made it clear that the Bush administration must make the case for extending TPA/fast-track
˜—?›Žœœ’˜—Š•ȱŽœŽŠ›Œ‘ȱŽ›Ÿ’ŒŽȱ
ŗŚȱ

›Š?Žȱ›˜–˜?’˜—ȱž?‘˜›’?¢ȱǻǼȱŽ—Ž Š•Ǳȱ˜›ŽȱŠ‹˜›ȱ?Š—?Š›?œȱ œœžŽœȱ
ȱ
negotiating authority, and could not expect Congress to extend it automatically when it expires
July 1.30 A key issue for many Democrats was the inclusion of enforceable International Labor
Organization (ILO) core labor standards in TPA principal negotiating objectives and in trade
agreements negotiated under them. Chairman Rangel, at hearings featuring U.S. Trade
Representative (USTR) Susan Schwab, indicated that he was interested engaging in a continuing
dialogue with the Administration, over the issue of enforceable labor standards, to see if a
compromise might be worked out.
On May 10, after much negotiation, Congress and the Administration announced a shift in labor-
trade policy: Pending U.S. trade agreements would be amended to incorporate “key Democratic
priorities” to “expand and shape trade in ways that spread the benefits of globalization here and
abroad by raising standards.” The release also announced that “this policy clears the way for
broad, bipartisan congressional support” for the pending FTAs.
Key provisions of the agreement include:
• A fully enforceable commitment that FTA countries will adopt, maintain and
enforce in their laws and practice the five basic international labor standards, as
stated in the 1998 International Labor Organization Declaration on Fundamental
Principles and Rights at Work.31
• A new fully enforceable, binding commitment prohibiting FTA countries from
lowering labor standards;
• New limitations on “prosecutorial” and “enforcement” discretion. FTA countries
cannot defend the failure to enforce laws related to the five basic standards due to
resource limitations or decisions to prioritize other enforcement issues; and
• Same dispute settlement mechanisms/penalties as other FTA obligations.
These concepts were then translated into “template language” agreed to by the Administration
and key Democratic leaders in Congress. The template language incorporating these concepts was
then inserted into trade agreements with Peru, Panama, Colombia, and South Korea, under
agreement between the United States and the respective countries.
At issue was how “core labor standards” would be defined. The concern was to avoid any
possible need to amend U.S. law to conform with any strict definitions of ILO “core labor
standards” that might be incorporated into language in the trade agreements.
The final template language solved this problem by defining “core labor standards” as a set of
principles only, rather than as a set of ILO conventions or detailed requirements. Specifically, the
language specifies that each party shall maintain in its statutes and regulations the rights “as
stated in the ILO Declaration of Fundamental Principles and Rights at Work and its Follow-Up
(1998).”

30 Trade Committee Chairmen Say U.S. Must Make Case for Fast Track. Inside U.S. Trade, April 20, 2007.
31 These are: the freedom of association; the effective recognition of the right to collective bargaining; the elimination
of all forms of forced or compulsory labor; the effective abolition of child labor and a prohibition on the worst forms of
child labor; and the elimination of discrimination in respect of employment and occupation. Source: Text: Congress,
Administration Trade Deal. Inside U.S. Trade, May 11, 2007.
˜—?›Žœœ’˜—Š•ȱŽœŽŠ›Œ‘ȱŽ›Ÿ’ŒŽȱ
ŗśȱ

›Š?Žȱ›˜–˜?’˜—ȱž?‘˜›’?¢ȱǻǼȱŽ—Ž Š•Ǳȱ˜›ŽȱŠ‹˜›ȱ?Š—?Š›?œȱ œœžŽœȱ
ȱ
The ILO Declaration, in turn, lists four basic rights of workers as core labor standards, but does
not define them. Nor does it include or directly reference the detailed language of the eight core
labor standards which define those rights. A footnote to the template language in the various
agreements (quoted in the paragraph above) further reinforces this point, by saying that the
obligations set out in the Article refer only to the ILO Declaration.
˜—?›Žœœ’˜—Š•ȱŽœŽŠ›Œ‘ȱŽ›Ÿ’ŒŽȱ
ŗŜȱ

›Š?Žȱ›˜–˜?’˜—ȱž?‘˜›’?¢ȱǻǼȱŽ—Ž Š•Ǳȱ˜›ŽȱŠ‹˜›ȱ?Š—?Š›?œȱ œœžŽœȱ
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Table A-1. Worker Rights Provisions in TPA/Fast-Track Authority, 1974-2007
Agreements
Approved Under
this TPA/Fast-Track
TPA/Fast-Track
Worker Rights Provisions in Principal Negotiating
Authority and
Year
Authority
Objectives
Approval Year
1974-1988 Trade Act of 1974
No worker rights provisions.
U.S.-Israel Free Trade
(P.L. 93-68) as
Agreement (FTA),
amended ultimately
1985
expiring January 3,
1988
U.S.-Canada FTA, 1988
1988-1993 Omnibus Trade Act
Sec. 1101, PRINCIPAL NEGOTIATING OBJECTIVES, specifies worker
North American Free
of 1988 (P.L. 100-
rights in principal negotiating objectives: (a) to promote worker Trade Agreement
418) as amended,
rights; (b) to secure a review of the relationship of worker
(NAFTA), 1993
ultimately expiring
rights to General Agreement on Tariff and Trade (GATT, the
December 31, 1993
predecessor to the World Trade Organization -WTO) articles;
(c) to ensure that the benefits of the trading system are available
to all workers; and (d) to adopt as a principle of the GATT that
the denial of worker rights should not be a means for a country
of its industries to gain competitive advantage in international
trade.
1994-2002 None
None
Jordan,
2001
2002-2007 Trade Act of 2002
Sec. 2102(a) OVERALL NEGOTIATING OBJECTIVES for Labor:
Free Trade
(P.L. 107-210, set to (6) to promote respect for worker rights consistent with core
Agreements with:
expire July 1, 2007)
labor standards of the ILO.
Chile, 2003
Sec. 2102 (b) (11) PRINCIPAL NEGOTIATING OBJECTIVES for Labor: Singapore, 2003
(A) To ensure a party does not fail to effectively enforce its own Australia, 2004
labor laws; [BUT]
Morocco, 2004
(B) To recognize that parties to a trade agreement retain the
Bahrain, 2006
right to exercise discretion and make decisions regarding the
Oman, 2006
allocation of enforcement resources;
(C) To strengthen the capacity of U.S. trading partners to
Central America and
promote respect for core labor standards; [
the Dominican
BUT]
(G) To ensure that labor practices of the parties do not
Republic (known as
arbitrarily or unjustifiably discriminate against U.S. exports or
CAFTA-DR), 2006
serve as disguised barriers to trade.
Sec. 2102(b)(12) DISPUTE SETTLEMENT AND ENFORCEMENT:
(G) To seek provisions that treat U.S. principal negotiating
objectives equally with respect to—
(i) The ability to resort to dispute settlement;
(ii) The availability of equivalent dispute settlement procedures;
and
(iii) The availability of equivalent remedies.
Sec. 2102(b)(17) WORST FORMS OF CHILD LABOR: to seek
commitments by parties to trade agreements to vigorously
enforce their own laws prohibiting the “worst forms of child
labor” [pertaining to use in such things as war, drug trade,
trafficking, or pornography].
Source: Table compiled by CRS.
˜—?›Žœœ’˜—Š•ȱŽœŽŠ›Œ‘ȱŽ›Ÿ’ŒŽȱ
ŗŝȱ

›Š?Žȱ›˜–˜?’˜—ȱž?‘˜›’?¢ȱǻǼȱŽ—Ž Š•Ǳȱ˜›ŽȱŠ‹˜›ȱ?Š—?Š›?œȱ œœžŽœȱ
ȱ
Table A-2. Key Labor Provisions in FTAs Negotiated under Various TPA/Fast-Track
Laws
TPA/Fast-
Free Trade
Track
Agreement or
Authority
Partner Country
Enforceable Labor Provisions and Their Location
Omnibus Trade North American Free
In LABOR SIDE AGREEMENT:
Act of 1988
Trade Agreement
The only enforceable labor provision is for a party’s failure to
(NAFTA)
enforce its own laws relating to child labor, minimum wage, or
occupational safety and health where the violation is trade-related
and covered by mutually-recognized labor laws.
DISPUTE SETTLEMENT PROCEDURES:
The labor side agreement has its own dispute settlement procedures
with lower maximum penalties than are in the agreement itself.
No TPAS
Jordan
In the BODY OF THE AGREEMENT:
Authority
(Technically all provisions are enforceable; although an exchange of
letters between the U.S. and Jordanian governments agreed to
resolve any potential disputes without resorting to sanctions.)
LABOR PROVISIONS: Parties:
1. Agree to not to fail to enforce their own laws, through a sustained
or recurring course of action or inaction, in a manner affecting trade
between the Parties; but retain the right to exercise discretion in
that enforcement;
2. Reaffirm obligations under the International Labor Organization
(ILO) and strive to ensure that these labor principles and
“internationally recognized worker rights” are recognized and
protected by domestic law;
3. Recognize that it is inappropriate to encourage trade by relaxing
domestic labor laws. Therefore, the parties strive to ensure they do
not waive or derogate from such laws in order to encourage trade
with the other party;
4. Recognize the right of the other party to establish its own labor
standards and adopt or modify its labor laws and regulations
accordingly; and to strive to ensure that those laws are consistent
with the U.S. definition of core labor standards.
5. Recognize that cooperation between them provides enhanced
opportunities to improve labor standards.
DISPUTE SETTLEMENT PROCEDURES:
The same procedures apply to all agreement provisions equally.
Trade Act of
Free Trade Agreements
In the BODY OF THE AGREEMENT:
2002
with:
THE ONLY LABOR PROVISION THAT IS ENFORCEABLE UNDER DISPUTE
Chile
SETTLEMENT PROCEDURES IS: All parties:
Singapore
1. Agree to not to fail to enforce their own laws, through a sustained
Australia
or recurring course of action or inaction, in a manner affecting trade
Morocco
between the Parties; but retain the right to exercise discretion in
Bahrain
that enforcement.
Oman
DISPUTE SETTLEMENT PROCEDURES:
Central America and the
Labor (and environment) provisions have some different dispute
Dominican Republic
settlement procedures with a lower maximum fines and/or
(known as CAFTA-DR)
sanctions.
Source: Table compiled by CRS.
˜—?›Žœœ’˜—Š•ȱŽœŽŠ›Œ‘ȱŽ›Ÿ’ŒŽȱ
ŗŞȱ

›Š?Žȱ›˜–˜?’˜—ȱž?‘˜›’?¢ȱǻǼȱŽ—Ž Š•Ǳȱ˜›ŽȱŠ‹˜›ȱ?Š—?Š›?œȱ œœžŽœȱ
ȱ
Table A-3. Enforceable Labor Provisions Included in H.R. 3019 (Rangel, 107th
Congress)
TPA/Fast-Track
Authority
Enforceable Labor Provisions
H.R. 3019
Sec. 2(d)(1). PRINCIPAL NEGOTIATING OBJECTIVES FOR BILATERAL TRADE AGREEMENTS:
(Comprehensive Trade
Negotiating Authority
(1) To include enforceable rules that provide for the adoption and enforcement of the
Act of 2001)
following core labor standards: the right of association, the right to bargain collectively,
and prohibitions on employment discrimination, child labor, and slave labor;
(2) To establish as the trigger for invoking the dispute settlement process with respect
to the obligations above: (a) failure to effectively enforce one’s own domestic labor
standards through a sustained or recurring course of action or inaction, in a manner
affecting trade or investment; or (b) waiver or derogation from domestic labor standards
in order to attract investment, inhibit exports, or otherwise gain a competitive
advantage;
Recognizing that:
(A) Parties retain the right to exercise discretion regarding investigatory,
prosecutorial, regulatory, and compliance matters and to make decisions regarding
the allocation of resources to enforcement with respect to other labor matters
determined to have higher priorities [same as in Trade Act of 2002]; and
(B) Parties retain the right to establish their own domestic labor standards, and
to adopt or modify accordingly labor policies, laws, and regulations, in a manner
consistent with the core labor standards identified in (1) above.
(3) To provide for phased-in compliance for least-developed countries comparable to
mechanisms used in other agreements;
(4) To create a work program to provide guidance and technical assistance to [Parties]
in strengthening their labor laws and regulations and commitments for market access
incentives for least developed [Parties] to improve adherence and enforcement of core
labor standards;
(5) To provide for regular review of adherence to core labor standards; and
(6) To create exceptions from obligations under the ... agreements for products
produced by prison or slave labor and products produced by child labor; and for actions
taken consistent with and in furtherance of recommendations made by the ILO.
DISPUTE SETTLEMENT PROCEDURE
(7) To provide for a single effective and expeditious dispute settlement mechanism and
set of procedures that applies to all ... agreements.
Source: Table compiled by CRS.

ž?‘˜›ȱ˜—?ŠŒ?ȱ —?˜›–Š?’˜—ȱ

Mary Jane Bolle

Specialist in International Trade and Finance
mjbolle@crs.loc.gov, 7-7753

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ŗşȱ