The Honorable Robert B. Zoellick
United States Trade Representative
Office of The United States Trade Representative
600 17th Street, N.W.
Washington, DC 20508

Dear Ambassador Zoellick:

On behalf of Human Rights Watch, I would like to share our view regarding the necessary link between trade and labor rights, and to suggest a way forward for the United States as it pursues free trade agreements bilaterally, regionally, and globally.

Our position begins with the recognition that the international flow of goods, capital, information and people has delivered wealth and opportunity to many parts of our planet, though many millions of people remain left behind. The further reduction of tariffs and subsidies in wealthy countries can help reduce poverty in a world where one in five people live on less than a dollar a day. What is more, the growing interdependence among developed and developing nations has itself helped to put issues such as child labor and freedom of association on the global agenda, giving those working for higher standards far greater leverage. Therefore, efforts to uphold labor rights should also advance the right of people everywhere to participate in the global economy.

At the same time, trade alone does not guarantee greater respect for labor and human rights. Increased trade with the United States has not diminished China's determination to snuff out all attempts by workers to organize independent trade unions, or ended egregious discrimination against women in Guatemalan maquiladoras, or freed children from hard labor in factories in South Asia. Such abuses can only be addressed if efforts to expand trade go hand in hand with efforts to promote basic worker and human rights.

Human Rights Watch believes strongly that the link between trade and rights is inherent and fundamental; it is not an effort to hold one agenda hostage to another. The link, after all, is very real to workers who stand to benefit from exports, but who sometimes find their wages artificially depressed by repression. It is real to consumers who do not want to be complicit in human rights violations by buying products made under abusive conditions or the threat of violence.
The point of addressing these concerns in trade agreements is not to guarantee uniform wage levels or working conditions. It is to promote those universally recognized rights that allow workers the freedom to seek better wages and conditions. It is to ensure that governments enforce their labor laws. And it is to protect people from abuses such as forced and child labor, from which no nation should gain a competitive advantage. To do so is not a threat to globalization, but the minimum required for globalization to succeed.

The hard question is how to incorporate labor rights into trade agreements in a way that is effective and enforceable, without shutting down trade or benefiting the world's richest countries at the expense of the poorest.

Human Rights Watch believes that the idea of using monetary penalties as the primary tool for enforcing trade agreements, which you and others have explored, may offer a way forward. It is an alternative that the business community should be able to accept, and if implemented effectively, it may be the fairest alternative available. Clearly, workers who are abused and exploited are not likely to benefit from broad based trade sanctions that cost them their jobs. And when a government fails to meet its obligations, it is that government, not workers or businesses, which should pay the price.

We would be prepared to support such an approach, so long as it preserves the possibility of sanctions where governments simply refuse to pay monetary fines, and if it incorporates several principles, each based on a careful assessment of the strengths and weaknesses of past efforts to advance labor rights through trade.

1. Consistency

If the Administration pursues monetary penalties as an enforcement tool for labor rights, it should make clear it is committed to incorporating those rights into all future trade agreements. For example, if monetary penalties are advanced solely as a way of removing trade sanctions from the U.S.-Jordan Free Trade Agreement, Human Rights Watch would be vigorously opposed. If they are advanced as a model for enforcing labor rights in future agreements, including the U.S.-Chile FTA and a Free Trade Area of the Americas, we believe they could contribute to a broad consensus on trade and labor.

2. Parity

Labor rights protections should be subject to the same dispute settlement and enforcement procedures and the same penalties available to other issues covered in trade agreements. For example, we could not support an approach that offers greater protection to intellectual property than it does to people - both as a matter of principle, and because we believe that the protection of core labor rights is as inherent to fair and open trade as the protection of copyrighted material.

Some may resist an approach that appears to weaken enforcement for the rights of businesses in order to strengthen enforcement of worker rights. But that need not be the case if fines are large enough and if non-payment could still result in the imposition of sanctions, as is the case in the North American Agreement on Labor Cooperation.

3. Meaningful Definition of Rights

Future trade agreements should protect a broad range of internationally recognized labor rights, including all the labor principles and obligations enumerated in the North American Agreement on Labor Cooperation, from freedom of association to non-discrimination in the workplace.

The requirement in the Jordan agreement that governments enforce existing domestic labor laws may be a good model for some future trade agreements, but not for all. For example, it would not be appropriate for a U.S.-Chile FTA because internationally recognized labor rights are not yet fully protected in Chile. Existing laws dating to the Pinochet era (some of which the government is attempting to change) fail to require reinstatement of workers fired for union activity, permit strikes only during the collective bargaining process, limit the right to bargain collectively above the level of the individual workplace, fail to protect the right of all workers to engage in collective bargaining and establish ineffective sanctions for labor law violations. When a trade agreement is based on the enforcement of domestic legislation, that legislation should meet international labor standards before the agreement is ratified, or within a pre-determined time-frame after ratification, with failure subject to penalty.

4. Enforceability

Clearly, any agreement prescribing fines for trade and labor violations would require the creation of a body to arbitrate disputes and impose the fines. Human Rights Watch believes it is vital that such a body have the independence to hear complaints from individuals, governments and NGO's, to initiate investigations on its own, to recommend remedies, and to impose penalties when governments fail to act.

The NAFTA experience demonstrates that it is unrealistic to expect governments to police each other when it comes to protection of labor rights. The NAFTA labor side agreement does provide for panels of arbitration which may impose penalties for certain labor rights violations. But the panels can only come into being when governments make a political decision to convene them. Partly as a result, of the 23 complaints filed under the NAFTA labor side agreement since 1994, few have been credibly investigated, and none have led to penalties or sanctions.

The potential of the NAFTA side agreement and of future efforts to protect labor rights in trade agreements can be realized only through an independent oversight body. That is the only way to take the enforcement of labor rights, and indeed, of other provisions of trade agreements, out of the realm of politics and into the realm of objective law enforcement.

5. Other Questions

One question about which any agreement prescribing monetary fines would need to be clear is how those fines would be used. When a government has the will to enforce its labor laws, but lacks the means, it may be appropriate to allocate fines to improve its labor law enforcement capacity. But when governments lack the will to meet their obligations, or deliberately violate fundamental rights, fines would be better paid to an outside monitoring body.

Another question is: What happens if a government chooses to pay a fine as a cost of doing business, while continuing to violate systematically the provisions of an agreement? Under such circumstances, the option of broader trade measures would need to be available as a last resort.

Finally, there may be times, particularly in smaller developing countries, when multinational corporations responsible for labor rights violations overwhelm a government's ability to enforce its labor laws (or, for that matter, its copyright laws). Under these circumstances neither fining the government nor sanctioning the country would be appropriate. One solution would be to give the independent oversight body the power to subpoena corporate officials, and to create a right of action in national courts against employers who systematically violate labor laws.

We recognize that ensuring the enforcement of labor rights provisions will be extraordinarily complex and difficult, especially for large, multilateral agreements such as the proposed Free Trade Area of the Americas. It remains to be seen whether existing institutions such as the WTO and the ILO can play a role or provide a model, or whether new arrangements will need to be created. But finding an appropriate mechanism will be critical, if the consensus for globalization is to be sustained, among business and labor, developed and developing countries.

Human Rights Watch is eager to work with you to explore these issues further, to find creative answers to the questions this effort has raised, and to find the common ground from which we can both lift lives and raise standards.

Sincerely,

Tom Malinowski
Washington Advocacy Director