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AFL-CIO Tests Free Trade Pacts

Organized labor filed a first-of-its-kind complaint with the Department of Labor on Wednesday that it sees as a barometer of how effective the labor...

WASHINGTON — Organized labor filed a first-of-its-kind complaint with the Department of Labor on Wednesday that it sees as a barometer of how effective the labor provisions are in free trade agreements.

This story first appeared in the April 24, 2008 issue of WWD.  Subscribe Today.

The AFL-CIO petition was filed with the Office of Trade and Labor Affairs. It is the first one filed under the terms of the Central American Free Trade Agreement, which requires that member countries enforce their own labor laws.

Allegations from the union refer to five cases in Guatemala dating back two years in which the AFL-CIO alleged that workers’ rights were not protected by the government, including two at apparel factories and one in the ports. The complaint is directed at the Guatemalan government, not at the individual companies. The Guatemalan president will be in the United States next week as part of a state visit.

The Office of Trade and Labor Affairs has 60 days to accept or reject the complaint, said Thea Lee, policy director at the AFL-CIO. If the petition is accepted, the administration would initiate consultations with the Guatemalan government to work the issue out. If the consultations did not work, the matter would enter formal dispute settlement proceedings.

If the issue was not resolved by that method, a fine could be levied against Guatemala for up to $15 million. The money would be paid into a fund earmarked to be spent in Guatemala on improving labor conditions. If the fine were to go unpaid, then there could be possible trade sanctions under the terms of CAFTA, Lee said.

“The Department of Labor will thoroughly review and investigate these allegations within the parameters set by the CAFTA agreement. Free trade agreements like CAFTA provide a mechanism so that the United States government can address allegations of this nature,” said Charlotte Ponticelli, deputy undersecretary of Labor for International Affairs.

“The Bush administration has never pursued the labor cases with any persistence or vigor. We hope this time will be different,” the AFL-CIO’s Lee said.

The complaint has relevance to the debate surrounding the Colombia free trade agreement, Lee said, but it is not why the petition was filed. However, the case will help show how effective the CAFTA labor chapter is in ensuring that labor rights are protected, she noted. Labor protections have been at the heart of some of the arguments over the pros and cons of the Colombia agreement in recent weeks.

Included in the complaint are detailed examples of how the union thinks the Guatemalan government has violated its own labor laws by allowing physical violence against trade unionists and violations of the freedom of association and collective bargaining rights of workers to continue to occur. The complaint also alleged the workers did not have access to fair or timely legal and administrative recourses.

The complaint alleged that “in certain important respects, labor conditions in the country have remained unchanged or have worsened since the [CAFTA] trade agreement was ratified.” The treaty went into effect in July 2006.

The AFL-CIO detailed examples of workers who were allegedly dismissed from Avandia SA, an apparel factory in Guatemala City that manufactured clothes for Jones Apparel Group, for trying to establish a union. Another example involved a South Korean-owned company, Fribo SA, that allegedly reincorporated to avoid unionization. Fribo made clothes for retailers like Kohl’s and Dress Barn.

Jones and Dress Barn declined to comment. Kohl’s could not be reached by press time.

Julia Hughes, senior vice president of trade for the U.S. Association of Importers of Textile and Apparel, said she was surprised to hear that Guatemala was the country named in the complaint and that the trade situation between the U.S. and Guatemala was very different from what is going on with Colombia.

“It sounds a little bit as though it’s a political move,” she said.

The union said its position is driven solely by concern for a situation they have been monitoring for some time.

“Guatemalan workers are being targeted for their union activity,” said AFL-CIO president John Sweeney. “Without freedom from fear to join unions and bargain collectively, how can we expect any workers to benefit from a trade agreement?”