Labor Enforcement Issues in U.S. FTAs (CRS Report for Congress)
| Release Date |
Revised March 23, 2023 |
| Report Number |
IF10972 |
| Report Type |
In Focus |
| Authors |
Cathleen D. Cimino-Isaacs |
| Source Agency |
Congressional Research Service |
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Summary:
Labor provisions in free trade agreements (FTAs)—both in
the U.S. and globally—were first included in the North
American Agreement on Labor Cooperation (NAALC), the
side agreement to the 1994 North American Free Trade
Agreement (NAFTA). Since then provisions have evolved
from commitments not just to enforce a country’s own
domestic labor laws, but also to adopt and enforce core
labor principles of the International Labor Organization
(ILO). As mandated by Congress through trade promotion
authority (TPA), recent U.S. FTAs also subject labor
chapters to the same dispute settlement procedures as all
other obligations. Some Members view strong worker rights
provisions in U.S. FTAs as an important issue and they
have raised concerns over FTA partner compliance with
labor commitments and the U.S. record of enforcement.
These issues were a part of the debate over the TransPacific
Partnership (TPP) and in the NAFTA renegotiation.
Labor standards are not part of World Trade Organization
(WTO) rules; in 1996, members reaffirmed the ILO as the
competent body to deal with labor issues, while denouncing
the “use of labor standards for protectionist purposes.”
Limited progress at the WTO led several countries to
include labor commitments in FTAs. Some countries,
including the U.S., also include worker rights as eligibility
criteria for developing countries to receive unilateral trade
preferences, such as the Generalized System of Preferences.
U.S. FTAs have set precedents both in terms of the scope
and enforceability of labor provisions. An ILO report found
as of 2016, 77 out of 267 FTAs globally included labor
provisions, compared to 21 in 2005. Unlike U.S. practice,
the majority of agreements do not subject labor provisions
to dispute settlement. Most provide a framework for
dialogue, capacity building, and monitoring, rather than link
violations to economic consequences, such as trade
sanctions. In cases where dispute settlement is applicable,
such mechanisms have been rarely invoked; countries
largely aim to solve disputes via cooperative consultations.
