Sources: U.S. loses to Guatemala in first-ever FTA labor dispute settlement case

June 21, 2017

After nine years, the United States has lost -- to Guatemala -- the first-ever labor enforcement case brought to dispute settlement under a free trade agreement, sources told Inside U.S. Trade.

[Isabelle Hoagland & Jenny Leonard] June 20th, 2017 [Inside Trade

The dispute, which marked the first time a labor rights complaint was lodged under a free trade deal, was triggered in 2008 after the AFL-CIO and six Guatemalan labor unions filed a complaint with the Labor Department under the labor chapter of the Dominican Republic-Central America free trade agreement (CAFTA-DR). The groups alleged that the Guatemalan government failed to adequately enforce labor obligations involving the freedom of association, collective bargaining and rights to acceptable conditions of work.

A three-person arbitration panel ruled in favor of Guatemala last week, sources said, issuing a report to the parties that is expected to be released soon. CAFTA-DR does not provide a mechanism for appeal.

Celeste Drake, trade policy specialist at AFL-CIO, declined to comment on the case as she had not read the report and was not privy to the outcome. However, she said, “we believe this case should have been a slam dunk for the U.S., so the rumors of a U.S. loss are very troubling.”

Sources who have been closely following the case believe it could have implications for the renegotiation of the North American Free Trade Agreement and future trade deals.

Read more at Inside Trade

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