Laboring for Trade Deals: Trade Agreements and Labor Rights

Publication Date: March 2007

Publisher: Center for American Progress

Author(s): Daniel K. Tarullo

Research Area: Labor; Trade

Type: Report

Abstract:

Congressional leaders and top officials in the Bush administration this week hope to find common ground on a new set of trade principles so that Congress can extend President Bush’s authority to conclude the final terms in the Doha Round of multilateral trade talks and several bilateral trade agreements. There are numerous points of disagreement that still need to be overcome. But on one important topic—incorporating meaningful labor rights principles in any new trade accords—the administration has made things more difficult than they need to be.

Bush administration officials and key congressional leaders in the House and Senate are currently discussing what kind of labor rights principles need to be embraced by the White House for Congress to extend the president’s negotiating authority. That authority expires at the end of June, which means Congress and the administration must act quickly. Everyone has known since at least the November elections that resolving the labor rights issue was a necessary condition for moving forward.

Unfortunately, the Bush administration has just recently proposed that labor-standard provisions of free trade agreements require that parties to any trade agreement have laws “equivalent” to U.S. laws. This approach runs counter to the longstanding proposal on Capitol Hill that all countries involved in any new trade accords commit to five basic internationally recognized labor standards.

The Bush administration’s counter-proposal is misguided as a matter of law and policy.The reported basis for the administration’s position—that holding the United States to international standards would expose the U.S. to repeated successful challenges in dispute settlements—is at best exaggerated. The longstanding proposal among congressional leaders is simply that five principles for labor standards be included, but not all the detailed rules of various conventions and guidelines produced under International Labor Organization auspices.

Leaders in Congress propose that alleged violations of these ILO principles be related only to trade. In that way, any labor-related dispute-settlement challenges that the U.S. or other countries might initiate under any new trade pacts would be germane only if related directly to trade disputes, not other economic or human rights issues.

As my newly released report, A Sensible Approach to Labor Standards to Ensure Free Trade, makes clear, the dispute-settlement mechanisms on labor provisions will be government-to-government only, which means cases will be filed only in the unusual circumstance where a government has a strong incentive to do so as it relates to trade.