Can Worker Rights Be Enforced under CAFTA?

The Obama administration announced July 30 it would finally take formal action against Guatemala to address violations of worker rights.

The International Trade Union Confederation ranked Guatemala the second most dangerous country in which to be a trade unionist last year, trailing only Colombia. Guatemala witnessed 16 murders reported last year, compared to none in 2006. Violence against trade unionists and other human rights defenders in Guatemala has escalated in a climate of virtually total impunity.

Contrasting Obama’s move to the Bush administration’s failure to act, the AFL-CIO hailed his decision to request “consultations” with Guatemala as a potential turning point in enforcing labor rights protections in trade deals.

The Guatemalan labor movement also voiced support, with the Union, Indigenous and Peasant Movement of Guatemala (MSICG) expressing appreciation.

Does Obama’s action signal a shift toward respect for workers in global trade? That remains to be seen. The administration is stuck with enforcing a trade deal whose rules for labor rights protections are weaker than under previous trade programs.

If the consultations under CAFTA (the Central America Free Trade Agreement) do not produce satisfactory results, the U.S. government can move to a dispute settlement process. That could yield an annual fine against the Guatemalan government of up to $15 million that would be used for enforcement.

Continued lack of progress on worker rights could, eventually, lead the U.S. to suspend some trade benefits. But the threat may strike the Guatemalan elite as illusory. Even under stronger labor protections last decade, the U.S. government never actually took benefits away.


July’s action against Guatemala was a long time coming. The AFL-CIO and six Guatemalan unions filed the complaint, the first labor complaint under CAFTA, more than two years ago.

The complaint used a series of case studies to illustrate the Guatemalan government’s failure to investigate violations and enforce its own labor laws, as well as its failure to address violence against unionists, which has grown dramatically since CAFTA went into effect in 2006.

Critics of CAFTA’s labor rules, including USLEAP, have argued they do not adequately protect worker rights—and even represent a step back.

Under CAFTA, governments are only required to enforce their own laws, no matter how paltry. (They can even weaken their labor law, as Honduras is now proposing to do, without fear of sanctions.) If they are found negligent, the sanction is a “self-fine”: a commission with reps from both countries would determine how to spend the money, presumably by the Guatemalan Labor Ministry and judicial system.



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Prior to CAFTA, the Generalized System of Preferences (GSP), which provided duty-free access for some exports from the South, had labor rights provisions with higher standards and penalties that struck at employers faster.

During the 1990s, GSP’s labor provisions were used with some effect against Guatemala, securing new labor courts, labor law reform, increased sanctions, and more labor inspectors, though these did not necessarily function well.

In the initial years, Guatemalan elites were very concerned about periodic reviews of their trade benefits, prompting threats against Guatemalan unions who participated (and against USLEAP)—until the elites realized that the U.S. government would never actually suspend benefits.


The biggest problem with the government’s newest action is the decision to treat violence against unionists separately from the CAFTA labor complaint procedure.

Before CAFTA, violence was sometimes key in GSP trade reviews. Under GSP, the US Trade Representative even initiated its own review of Guatemala’s trade benefits after leaders of Guatemala’s largest private sector union, SITRABI, representing Del Monte banana workers, were violently attacked and forced to flee the country in 1999.

Some activists see the Obama administration’s decision to seek action against Guatemala as an effort to placate worker rights advocates, including U.S. unions, that oppose long-pending free trade agreements with Panama, South Korea, and Colombia. It’s also not coincidental that Trade Rep Ron Kirk announced the move in front of an audience of trade-savvy Steelworkers, whose enthusiastic support the administration desperately needs in this fall’s election.

Congressional critics of these deals and their substandard labor protections don’t seem to be taking the bait, however. Key critics quickly gave notice that the labor protections included in CAFTA and the somewhat improved language in the newest round of proposed trade agreements were inadequate.

The horrific ongoing violence against Colombian union members is the primary political obstacle to Congressional approval of the pending free trade agreement there. The administration’s decision to exclude violence against unionists from the CAFTA process is one more reason to strongly oppose any trade deal with Colombia.

The Guatemala case will be the first test of the effectiveness of CAFTA’s labor language. The track record of roughly 40 labor complaints filed under NAFTA’s fairly similar labor side agreement, however, suggests what we can expert: not much.

Stephen Coats is executive director of US Labor Education in the Americas Project.

A version of this article appeared in Labor Notes #378, September 2010. Don't miss an issue, subscribe today.