In 1993, the United States, Mexico, and Canada adopted a labor side accord to the North American Free Trade Agreement (NAFTA), pledging to work toward broad improvements in the situation of labor rights in their respective countries. Seven years after the agreement entered into force, however, the record shows that the three countries have failed to live up to this commitment. While the accord, known formally as the North American Agreement on Labor Cooperation (NAALC), has suffered from structural defects from the outset, it nevertheless holds far greater potential to promote workers' rights and high labor standards than its limited use by the signatory states would suggest. Instead of exploiting this potential, the NAFTA countries have ensured the accord's ineffectiveness in protecting workers' rights.
As part of our work to promote labor rights, Human Rights Watch has actively utilized and tested the NAALC mechanisms, and in the past few years has filed two petitions alleging violations of the NAALC's terms. At present, given the increasing international debate regarding how-or whether-to link labor rights provisions to trade agreements, it is a particularly appropriate moment to assess the NAALC experience and the lessons that flow from it. This report aims to evaluate the accord, and so to contribute to the wider debate from a non-partisan perspective. Human Rights Watch takes no position on trade per se, and took no position on NAFTA, but we are committed to helping identify, enhance, and implement the most effective measures possible for promoting labor rights. With this in mind, in addition to critiquing the NAALC's provisions and assessing its operation, we include recommendations on how the three NAFTA governments could better utilize the NAALC in its present form, and how the accord could be strengthened to more effectively safeguard labor rights.
The NAALC, for all its deficiencies in practice, remains the most ambitious link between labor rights and trade ever implemented. It broke new ground by creating labor-related obligations and establishing sanctions for failure to fulfill them in certain cases. Under the accord, the signatories must ensure that labor laws and regulations provide for "high labor standards;" they must strive to improve those standards; and they must ensure access to "fair, equitable, and transparent" mechanisms for enforcing their labor law. The accord obligates the parties to effectively enforce their own labor law in eleven key subject areas, and stipulates that a "pattern of practice" of non-compliance (more than one incident) in certain subject areas could lead to the appointment of an outside panel of experts to recommend measures to resolve the problem. A "persistent pattern" of non-enforcement (a sustained or recurring pattern of practice) could lead to the convocation of an arbitral panel and the imposition of sanctions.
As initially conceived and negotiated, NAFTA included no provisions to protect labor rights in its text or through a side agreement. During the 1992 presidential campaign, however, then-candidate Bill Clinton strongly criticized NAFTA, which had been signed by the incumbent, President George Bush, arguing that it did "nothing to reaffirm our right to insist that the Mexicans follow their own labor standards, now frequently violated." Clinton sought to assuage concern within a key Democratic Party constituency-labor unions-that U.S.-based companies would move to Mexico to take advantage of lax enforcement of labor laws there.
The NAALC that was finally negotiated by Canada, Mexico, and the United States sidestepped thorny international political issues by avoiding any suggestion that it was intended to harmonize labor standards in the three countries, and by ruling out the establishment of multinational judicial processes or appeals procedures. Rather, it aims to promote broad improvements in the labor rights situation in the signatory countries, and it relies on political engagement between the parties as the means to address its violations. Nongovernmental organizations and individuals also play a part by signaling to the governments involved when the obligations established by the accord have not been met.
The NAALC does not incorporate international labor rights norms; instead, it calls on the signatories to enforce their domestic labor standards effectively while working cooperatively with the International Labor Organization (ILO). Interestingly, the labor principles subject to NAALC consideration include a wider range of issues than the ILO's core standards, including protections for migrant workers and workers' compensation.
The NAALC does not purport to resolve labor rights problems in specific cases. A worker unjustly fired for organizing a union in the United States, for example, could not expect a case filed under the NAALC to lead to job reinstatement. Fixing problems with the enforcement of laws designed to protect freedom of association, however, would fall squarely within the accord's obligations. Similarly, a Mexican worker victimized by an unfair labor tribunal could not expect a NAALC-based process to correct the legal deficiencies suffered in the case heard domestically, but could legitimately expect the pact to contribute to a general improvement in Mexico's labor tribunals.
Even with these limitations, the NAALC has the potential to be a much more effective mechanism for promoting labor rights than it has been, in practice, to date. For example, if they had the necessary political will, the signatories could use the NAALC's framework to identify longstanding weaknesses in labor rights protections and develop comprehensive plans to remedy them. They could contribute to the development of labor law policy in their respective countries by promoting higher standards. And they could contribute to the wider international debate about how to link labor rights and trade.
An important structural weakness of the NAALC is its lack of an independent oversight body. In fact, such a body was proposed in an early draft of the agreement, but the signatories eventually decided to establish only weak bilateral and trilateral mechanisms as a basis for enforcement. Thus, for example, if the United States violates one of its NAALC obligations, Mexico or Canada can either separately or jointly push for a remedy. In practice, however, as was entirely predictable from the outset, in deciding whether to do so they are likely to also take account of other issues relevant to their bilateral relations with the United States, such as immigration, narcotics control, and the promotion of trade. So it is scarcely surprising that the NAALC's potential as a means for promoting respect for, and improvements in, labor rights has been dramatically underused.
The NAALC signatories have taken advantage of the accord's silence on how to deal with allegations of non-compliance with its obligations. National Administrative Offices (NAOs), which were created in each signatory country to address instances of non-compliance, have complete discretion to determine which complaints to accept and how to investigate and report on them. Similarly, the accord sets out no standards regarding how labor ministries in the three signatory states should design programs to address instances of non-compliance with NAALC obligations. As a result, the governments have sometimes ignored issues raised by petitioners, reported on issues but then failed to include them in government-to-government talks, or included them in bilateral discussions but established no mechanism for remedying the problems identified.
The accord permits the establishment of an outside panel of experts known as an Evaluation Committee of Experts (ECE) and an arbitral panel to address non-compliance with the obligation to enforce certain NAALC labor principles. However, it is vague on what to do when the accord's other obligations are not met. The obligation to have high labor standards, to strive to improve those standards, and to provide access to fair labor tribunals cannot by themselves be brought before such bodies. This constitutes a serious problem, because these obligations are fundamental to the ability of any government to enforce its labor law. In addition, the failure of a signatory government to enforce laws related to three fundamental labor rights-freedom of association and the right to organize, the right to bargain collectively, and the right to strike-cannot be brought before an expert committee or sanctions panel at all.
To date, the NAALC parties have handled a total of twenty-three cases in which nongovernmental organizations (NGOs) have alleged that one of the governments failed to fulfill its obligations under the accord. Chapter IV of this report presents a detailed review of the pact's structure, including its major structural and usage-related weaknesses. Chapter V presents summaries of each case filed under the accord, and Chapter VI reviews the impact of each case, examining them on a right-by-right and obligation-by-obligation basis, demonstrating the ways in which the parties have under-utilized the NAALC.
Through the course of handling cases, the NAOs and labor ministries have at least eight opportunities to stake out positions on labor rights, using the NAALC as a guide. Signatories interested in taking advantage of the NAALC to promote labor rights would take consistently strong measures at each stage. Their ability to do so, in fact, is one key way in which the NAALC provides important opportunities to promote labor rights. To date, however, the signatories have failed to use these opportunities to their fullest extent, or they have taken inconsistent measures as they move from one stage to the next.
The NAOs can initiate or accept cases for review, seeking to take on new issues that will use the NAALC to its fullest. The NAO can cast a wide net in search of information, seeking input from labor unions, businesses, nongovernmental organizations, governments, consultants, and other sources. Based on the information it gathers, the NAO then has an opportunity to synthesize the information gathered. Its findings can provide insight into problems uncovered, explicitly linking them to a state's obligations under the NAALC and building a case-based interpretation of the reach of those obligations.
An NAO's recommendations offer an opportunity for the reviewing government to set out goals for resolving the problems identified. Based on the recommendations, the labor ministry in which the NAO works can engage with one or both counterparts to resolve the problems through talks between labor ministries: these are known as ministerial consultations. Although the NAALC does not expressly call for governments to sign a ministerial agreement as a way of addressing a problem, the general practice has been that ministerial consultations will lead to such an agreement, and that this agreement then establishes a plan for resolving the labor issues at stake. Follow-up on such agreements provides an opportunity to ensure that the work plan was implemented effectively and that the problems have been resolved.
Rather than use their discretion to seek cases, insist on detailed reporting, and design programs to resolve problems, the NAOs and labor ministries have tended to timidity in their work. Five serious problems have resulted: important issues that have come to light through cases have gone unaddressed by the governments; petitioners' concerns have been ignored; some case reports have been devoid of findings of fact; interpretation of the NAALC's obligations has been minimal; and agreements between governments to address concerns arising in NAALC cases have, by design, provided little or no possibility of resolving the problems identified by petitioners.
The failure to define the NAALC's obligations has led in some cases to unfounded interpretations that severely limit the accord. The most common spurious argument is that only the enforcement of labor law, not the violation of other NAALC obligations, can be the subject of an NAO review or agreement between labor ministries to develop corrective activities. In fact, all aspects of the NAALC are subject to review and corrective activities. However, the signatories have created no opportunity for debating such interpretations or resolving differences about such matters-even though the accord provides that the Council of Ministers, which serves as the accord's governing body, "shall address questions and differences" regarding interpretations of the accord. Given the lack of accountability under the NAALC, strong political pressure for the signatories to adopt the weakest possible interpretation of the accord has not been countered.
The NAALC includes no formal appeals process, so petitioners faced with incomplete actions by the signatories have only one recourse: plead for reconsideration.
This reports makes two types of findings and recommendations. The first relates to general ways in which the NAALC could be made more effective, both with its current structure and with reforms that would improve it. The second focuses on the way Canada, Mexico, and the United States have used the accord. The following chapter lays out a full range of recommendations.
Perhaps the single most important thing the signatories could do to use the existing NAALC more effectively is to overcome their timid use of it. The timidity problem shows up in the reporting done by the NAOs and the ways in which they lay out their findings and recommendations. Even if these are strong, the labor ministries that take up consultations based on NAO reports often stop far short of designing agreements to resolve the problems identified.
If the NAALC is to be amended and strengthened, as Human Rights Watch believes it should be, the parties should ensure that the full range of NAALC labor principles and obligations can be the subject of remedial action backed by the possibility of sanctions. Of course, doing so would have little impact without the development and application of demanding trilateral standards to ensure that the parties do not arbitrarily handle cases.