ATP RESEARCH > Worker Rights Provisions in Free Trade Agreements (FTAs)

Worker Rights Provisions in Free Trade Agreements (FTAs)

09/18/2020

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Cathleen D. Cimino-Isaacs & M. Angeles Villarreal | Congressional Research Service

Canada CRS Free Trade Agreements (FTAs) Labor Mexico Terms of Trade Trade Agreements Trade Policy U.S Trade Policy United States USMCA USMCA

Overview

Worker rights are a prominent issue in U.S. FTA negotiations. Some stakeholders believe worker rights provisions are necessary to protect U.S. workers from perceived unfair competition and to raise labor standards abroad. Others believe these rights are more appropriately addressed at the International Labor Organization (ILO) or through cooperative efforts and capacity building. Since 1988, Congress has included worker rights as a principal negotiating objective in Trade Promotion Authority (TPA) legislation. The United States has been in the forefront of using FTAs to promote core internationally recognized worker rights. Labor provisions have evolved significantly since the North American Free Trade Agreement (NAFTA), moving from side agreements to integral chapters within FTA texts, with more provisions subject to enforcement. The conclusion of NAFTA renegotiations resulted in the U.S.-Mexico-Canada Agreement (USMCA), which replaces NAFTA and has a new labor chapter and enforcement mechanism. USMCA entered into force in July 2020.

Issues for Congress

In considering future TPA legislation (the current reauthorization expires in July 2021) or trade negotiations, Congress may wish to examine the application of worker rights provisions in FTAs. This debate could include

  • The effectiveness of FTAs as a vehicle for improving worker rights and labor standards in other countries;
  • The extent to which FTA partners are complying with labor obligations and whether dispute settlement provisions have been applied effectively;
  • Whether USMCA labor provisions serve as a new template for future U.S. FTAs;
  • The effectiveness of FTAs in providing technical assistance and trade capacity building; and
  • The role of businesses in promoting U.S. labor practices abroad and conducting supply chain due diligence.
CRS _ labor

Cathleen Cimino-Isaacs is an Analyst in International Trade and Finance at Congressional Research Service

M. Angeles Villarreal is a Specialist in International Trade and Finance at Congressional Research Service.

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