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Free Trade Agreements (FTAs)

How FTAs Involve Labor Rights

The United States has free trade agreements (FTAs) with 19 countries that include provisions to protect worker rights and facilitate cooperation among labor ministries. In 1993, the Presidents of the United States, Canada, and Mexico signed the North America Free Trade Agreement (NAFTA), as well as the first side agreement on labor standards, the North American Agreement on Labor Cooperation (NAALC). Beginning with the U.S.-Jordan FTA in 2001, all subsequent FTAs have included labor provisions within the text of the agreements.

The labor provisions of FTAs help ensure that the benefits of trade are widely shared, that worker rights are not denied in order to gain a trade advantage or attract investment, and consequently that U.S. businesses and workers compete on a level playing field globally. For the United States, the Trade Agreement Administration and Technical Cooperation Division within the Office of Trade and Labor Affairs serves as the point of contact for the labor provisions of the NAALC and FTAs.

The NAALC and the FTA Labor Chapters promote cooperation among trading partners to achieve these goals. For example, the labor provisions include mechanisms for meetings of the Labor Ministries to discuss progress in implementing the labor provisions of the NAALC and FTAs and to develop cooperative activities, such as technical exchanges.

Learn more about Technical Cooperation

National Advisory Committee for Labor Provisions of U.S. Free Trade Agreements

In March 2011, Secretary Solis nominated twelve individuals representing the public, the business sector, and worker organizations to the National Advisory Committee (NAC) for Labor Provisions of U. S. Free Trade Agreements. The committee is one way that OTLA channels external advice from key stakeholders into ILAB free trade agreement policy.

Learn more about the National Advisory Committee.

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How Labor Rights Are Enforced in FTAs (Submissions)

In addition, the labor provisions establish official processes for receiving complaints, or "submissions" from interested organizations that believe a trading partner is not fulfilling the labor commitments it made. In the United States, the U.S. Department of Labor, specifically the Office of Trade and Labor Affairs (OTLA), receives and reviews submissions made under the NAALC and the FTA Labor Chapters.

The Submission Process

A labor submission must meet certain criteria. The allegations must raise issues relevant to the labor provisions in the NAALC or FTA and illustrate a country's failure to comply with its obligations. OTLA's procedural guidelines provide a detailed explanation of what is required. If the submission meets these criteria, OTLA will accept the submission for review. OTLA then conducts the review and issues a public report on its findings generally within six months of accepting the submission. Depending on the outcome of the review, OTLA may recommend further actions, including that the U.S. request Consultations with the other country. The U.S. requested the first labor-related consultations ever under an FTA Labor Chapter on July 30, 2010 with Guatemala.

If Consultations fail to resolve the issue(s), FTA dispute settlement procedures may be invoked under certain circumstances. The procedures and remedies vary depending on the particular FTA, and the NAALC limits which labor issues can be taken to dispute settlement.

Labor Submissions Accepted for Review by OTLA

OTLA has accepted labor submissions for review in:

  • Mexico — On November 14, 2011, OTLA received a submission from the Mexican Union of Electrical Workers (Sindicato Mexicano de Electricistas, SME) and over 90 other organizations (including the AFL-CIO, the ITUC, and many grassroots organizations) under the North American Agreement on Labor Cooperation (NAALC). The submission alleges that the Government of Mexico (GOM) has failed to uphold its commitments under Articles 2 through 6 of the NAALC stemming from the GOM's actions or failure to take action following the issuance of a Presidential decree on October 10, 2009, dissolving the state-owned electrical power company, Central Light and Power, and terminating the employment of over 44,000 SME members. On January 13, 2012, OTLA accepted the submission for review and issued a Federal Register notice on its decision. OTLA has 180 days to review the submission and issue its public report.

    Read the Mexico Submission (2011)     PDF

  • Bahrain — On April 21, 2011, OTLA received a submission from the American Federation of Labor and Congress of Industrial Organizations (AFL-CIO), with a statement from the General Federation of Bahrain Trade Unions. The submission alleges the Government of Bahrain has violated the Labor Chapter of the Bahrain – United States Free Trade Agreement by failing to fulfill its obligations and commitments with regard to the right of association, generally, and in particular with regard to non-discrimination against trade unionists. On June 10, 2011, OTLA accepted the submission for review and issued a Federal Register notice on its decision on June 16, 2011. OTLA has met with the submitters and the Government of Bahrain as part of its efforts to prepare a public report with findings and recommendations on the allegations contained in the submission. On December 9, OTLA notified the submitters and the Government of Bahrain it had extended its period of review.

    Read the Bahrain Submission (2011) PDF

  • Peru — On December 30, 2010, OTLA received a submission from the Peruvian National Union of Tax Administration Workers (SINAUT), Sindicato Nacional de Unidad de Trabajadores de SUNAT. The submission alleges that SUNAT, an executive branch agency of the Government of Peru, has failed to comply with Peru's labor laws as they relate to collective bargaining, in violation of the Labor Chapter of the U.S. Peru Trade Promotion Agreement. On July 19, 2011, OTLA accepted the submission for review and issued a Federal Register notice on its decision on July 26, 2011. OTLA has engaged with the submitters and the Government of Peru as part of its efforts to prepare a public report with findings and recommendations on the allegations contained in the submission. On January 10, 2012, OTLA notified the submitters and the Government of Peru it had extended its period of review.

    Read the Peru Submission (2010) PDF

  • Guatemala — Read the Guatemala Submission (2008) PDF

Read about the status of submissions under the North American Agreement on Labor Cooperation.

Learn more about the countries with submissions that OTLA accepted for review: Guatemala, Peru and Bahrain.

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Which FTAs Have Labor Provisions

For specific information on FTAs with Labor Provisions, our work with FTA partners, and copies of an FTA Labor Chapter, please choose from the links below:

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How Labor Rights Are Reviewed and Strengthened before FTA Ratification

Trade Act of 2002

Per the Trade Act of 2002 [sections 2102(c)(5), 2102(c)(8) and 2102(c)(9)] and subsequent delegations of responsibilities that it creates, ILAB prepares for Congress three reports for every country with which the United States intends to establish a free trade agreement: a U.S. employment impact report, a report on the labor rights situation in our proposed partner country, and a report on laws governing exploitative child labor in the partner.

Read the Trade Act of 2002 Reports

Colombia Action Plan Related to Labor Rights

The United States-Colombia Trade Promotion Agreement (Agreement) includes strong protections for workers' rights based on the May 10, 2007 bipartisan Congressional-Executive agreement to incorporate high labor standards into America's trade agreements. The Agreement includes obligations for Colombia to protect fundamental labor rights as well as to effectively enforce existing labor laws, which will enable American workers and businesses to compete on a level playing field.

In addition, President Obama insisted that a number of serious and immediate labor concerns be addressed before he would send the Agreement to Congress. These concerns include violence against Colombian labor union members; inadequate efforts to bring perpetrators of murders of such persons to justice; and insufficient protection of workers' rights in Colombia. As a result, the U.S. and Colombian governments have agreed to an ambitious and comprehensive Action Plan that includes major, swift and concrete steps the Colombian government will take to address outstanding labor concerns.

Download the Colombia Action Plan (PDF)

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