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Guatemala Agrees to Labor Enforcement Plan to Resolve DR-CAFTA Case

Friday, April 12, 2013
By Shawn McCausland
Sandler, Travis & Rosenberg Trade Report

The Office of the U.S. Trade Representative announced April 11 that the U.S. and Guatemala have agreed on an enforcement plan to resolve concerns raised in a labor complaint filed in 2008 under the DR-CAFTA. USTR notes that this is the first labor case the U.S. has brought to dispute settlement under a trade agreement. An arbitral panel the U.S. had requested after previous efforts to resolve its concerns with Guatemala were unsuccessful will now be suspended but may resume its work if the enforcement plan is not implemented within the specified time frames.

According to USTR, the 18-point plan includes the following actions.

- conducting annual inspections of all companies that receive tax and tariff benefits under special provisions of Guatemalan law (Decree 29-89) to confirm compliance with labor laws and reject new applications for benefits received from labor law violators

- requiring that the Ministry of Economy revoke tax and tariff benefits within five days of receiving notice from a labor court that an employer violated a labor law and failed to comply with the labor court’s resolution

- pursuing legislation to establish an expedited process for labor courts to adopt fines recommended by the Ministry of Labor and Social Protection for labor law violations and to order employers to remediate such violations

- continuing to provide the resources necessary for the Labor Ministry’s effective enforcement of labor laws (e.g., in 2012 the government hired 100 new inspectors and five additional attorneys and acquired 20 new vehicles for the ministry)

- issuing an agreement between the Ministry of Labor and the Ministry of Interior ensuring police assistance to facilitate labor inspector access to worksites

- training labor court judges and other court personnel and developing the legal procedures necessary to help ensure effective criminal prosecution of employers who fail to comply with labor court orders related to the protection of workers’ right of association, right to organize and right to bargain collectively

- publishing data concerning labor complaints, inspections, violations and court orders

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