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U.S. May Resume DR-CAFTA Labor Case Against Guatemala if No Progress by April 25

Monday, March 10, 2014
Sandler, Travis & Rosenberg Trade Report

The Office of the U.S. Trade Representative is warning that it could resume a DR-CAFTA dispute settlement case on labor law enforcement in Guatemala if that country does not take further action by April 25. Officials from both sides met in Washington March 6 to discuss implementation of the 18-point labor enforcement plan they signed in April 2013 to resolve the concerns raised in a DR-CAFTA labor complaint filed in 2008.

A USTR press release indicates that Guatemala has not done as much to implement the enforcement plan as the U.S. had hoped. USTR states that some progress has been made, including the hiring of 100 additional inspectors and the adoption of legal reforms to ensure police assistance to facilitate labor inspector access to worksites and verify employer compliance with labor court orders, but the agency noted these same steps last October. In addition, the press release gives no indication that Guatemala has passed legislation providing for an expedited process to sanction employers that violate labor laws or implemented a contingency mechanism to address payment to workers in cases where export enterprises have closed, both areas in which USTR Mike Froman said the U.S. wanted to see “solid progress”  by this spring. Froman therefore made clear this week that the U.S. “believes further action is urgently needed to implement the enforcement plan” and that if these concerns are not addressed by April 25 the U.S. reserves the right to restart the dispute settlement proceedings.

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