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GOING MULTILATERAL: THE EVOLUTION OF U.S. HEMISPHERIC LABOR RIGHTS POLICY UNDER GSP AND NAFTA
by Lance Compa*

I. INTRODUCTION

The North American Agreement on Labor Cooperation' took shape in a period of growing international concern about "linkage" between labor rights and trade.' The link between labor rights and international trade used to be an obscure subject for a handful of specialists. Only fifteen years ago, international labor rights were largely seen as a technical concern of the International Labor Organization (ILO). The ILO is a United Nations specialized agency that issues-but has no power to enforce--"Conventions" approved by government, management and labor delegates to its annual conferences.3

* Adjunct professor, University of Connecticut School of Law; Director, International Labor Rights Advocates, A Project of the International Labor Rights Education and Research Fund. 1. North American Agreement on Labor Cooperation, opened for signature Sept. 8, 1993, 32 I.L.M. 1499 (entered into force Jan. 1, 1994) [hereinafter NAALC]. 2. The term "labor rights" is used here and throughout in the general sense, encompassing notions of labor rights, labor standards, worker rights, trade union rights, international fair labor standards and similar formulations which will also be used from time to time. More specific differentiation between, for example, "rights" (like the right of association) and "standards" (measurable economic conditions like minimum wage levels), or between rights of individual workers and rights of trade unions, is foregone here, though such differentiation is an important subject of debate in the field. See, e.g., Lance Compa, Labor Rights and Labor Standards in InternationalTrade, 25 LAW & POL'Y IN INT'L Bus. 1, 165-191 (Fall 1993); Richard Rothstein, Workplace Globalization: A Policy Response (Nov. 1993) (unpublished paper for Women's Bureau, U.S. Dep't of Labor) (on file with author). 3. To date, the ILO has adopted 176 conventions. Most deal with working conditions in specific industries or employment sectors. A half-dozen are considered to constitute a "human rights core" of ILO conventions covering freedom of association, the right to organize and bargain collectively, forced labor, child labor, discrimination, and minimum acceptable conditions as to wages, hours and
workplace health and safety. See INTL LAB. ORG., DIRECTOR GENERAL, HUMAN RIGHTS: A COMMON RESPONSIBILITY (1988).

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The notion of a "social clause" or "social dimension" in the international trade system, with trade sanctions against countries or companies that violate workers' rights, was a mostly theoretical annoyance to global investors, multinational corporate executives, trade ministries, and international trade lawyers. For them, trade was (and still is) strictly a commercial function with no immediate connection to social concerns. Appeals by labor unionists and their allies to link workers' rights and trade policy were seen as misguided attempts to bootstrap political concerns onto commercial agreements-as if trade liberalization by itself did not have profound social and political consequences. 4 Today the idea of a labor standards-trade "linkage" has breached the defenses of free trade ideologues. The neat division between commercial and social aspects of trade has evaporated under the wrenching pressure of new forces in a globalized economy and its shifting patterns of investment and disinvestment. Working people in developed countries who have fought for decades to achieve middle class living standards will not be willingly driven back toward poverty in a global "race to the bottom." 5 In many poorer countries, the notion that employees are happy to be exploited for the sake of development is one proffered by the government and commercial elites, not by workers and genuine trade union leaders.6 The premise of labor rights advocates is a simple one: no coun-

4. See, e.g., Robert J.Morris, Labor Standards and International Trade (1995) (unpublished manuscript, on file with the author) (Robert J. Morris is Senior Vice President of the U.S. Council for International Business; the views expressed are personal and do not necessarily reflect those of the U.S. Council). Mr. Morris argues that: mhe use of trade sanctions to force another country to enact or enforce either an agreed labor standard or its own law should be rejected because trade sanctions adversely affect only enterprises which trade, not the governments whose policies are the presumed object of the sanctions.... Retaliation for failure to accord a contracted commercial obligation is a means of penalizing the exports of foreign commercial entities because of their government's treatment of exports on one's own commercial entities. This is at least a symmetrical response. Action to punish commercial enterprises for a government's policies which have no commercial significance is unjustified by any reasonable standard. In summary, the use of trade sanctions to enforce labor standards is undesirable, unworkable, disproportionate and contrary to the basis of the GATI/WTO system as it was set up and has evolved over the last half century. Id.
5. See ORG. FOR ECON. COOPERATION & DEV., TRADE UNION ADVISORY COMM., WORLD

UNIONS CALL FOR "GLOBAL NEW DEAL" (Mar. 1994) (on file with author) (Trade Union Statement to the Detroit "G7" Conference on Unemployment and Job Creation).
6. See, e.g., HUMAN RIGHTS WATCH/ASIA, THE LIMITs OF OPENNESS: HUMAN RIGHTS IN INDO-

NESIA AND EAST TIMOR 22-27 (1994) (discussing labor rights in Indonesia). Though this is not true where trade union "leaders" are connected with official, government-controlled union bodies. The best example is that of Korea, where an explosion of trade union organizing and aggressive bargaining

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try-and no company operating in the country-should gain a competitive advantage in global trade by killing union organizers, banning strikes, using prison labor or brutalized child labor, or by purposely holding wages and conditions below levels commensurate with workers' productivity with any elemental social justice. The challenge has been twofold: establishing universal norms that comport with international law, and fashioning a system of enforcement that moves such "law" beyond a statement of good intentions. While neither of these challenges has been fully resolved, issues of international labor rights and fair labor standards have moved high on the agenda of world trade concerns in recent years. In broad terms, Europe and the United States have moved in different directions: Europe toward a multilateral solution to the "linkage" or "social clause" issue, the United States toward unilateral action. In Europe, the 1986 enlargement of the Community to include a "South" of Portugal, Spain, and Greece prompted the refashioning of a longstanding but diffuse "social charter"7 into a new, detailed "Community Charter of Fundamental Social Rights of Workers" in 1989 and the

shook the economy in the late 1980's after decades of labor suppression. See GEORGE OGLE, SOUTH
KOREA: DISSENT WITHIN THE ECONOMIC MIRACLE (1990).

7. There have been several such "charters" before 1989: 1) the social provisions of the 1950 European Convention for the Protection of Human Rights and Fundamental Freedoms, 213 U.N.T.S. 221, and a series of protocols that followed, which have given rise to many cases involving labor rights and labor standards brought before the European Court of Human Rights; 2) the social provisions of the 1957 Treaty of Rome, 298 U.N.T.S. 11, that created what was then called the European Economic Community (EEC), and is now applicable to the fifteen member states of what is now the European Union (EU); 3) the 1961 European Social Charter, 529 U.N.T.S. 89, adopted by the Council of Europe, applicable to all the countries of Europe; 4) a 1987 Protocol to the '61 European Social Charter, 27 I.L.M. 575 (1988), adding to the formulation of social rights affecting workplace equality between men and women, rights to information and consultation in the workplace, and worker participation in setting working conditions. 8. The Community Charter of the Fundamental Social Rights of Workers covers these twelve subjects: - the right to freedom of movement - employment and remuneration - the improvement of living and working conditions - the right to social protection - the right to freedom of association and collective bargaining - the right to vocational training - the right of men and women to equal treatment - the right to information, consultation and participation - the right to health and safety in the workplace

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"Social Protocol and Agreement" to the Maastricht Treaty on European Union in 1992. 9 The Charter and the Protocol govern EU decisions on an 0 "Action Programme" of Directives designed to implement the Charter.' These Directives are formulated and proposed by the European Commission, which is made up of representatives from every EU country."' The Commission consults with a European Parliament whose members are directly elected throughout member countries. The Council of Ministers from all EU members acts on the proposals of the Commission.12 Claimed violations of Directives proposed by the Commission and adopted by the Council may be brought for adjudication to the European Court of Justice, another EU organism comprised of judges from several member countries.13 As is evident, the entire framework of European Union policy-making and its executive, legislative, and judicial functions depend on multilateral involvement and cooperation. In the United States, during the decade before the passage of NAFTA and the NAALC, a coalition of trade union, human rights, religious, consumer, and allied groups succeeded in having unilateral labor rights conditionality added to a range of U.S. trade and investment legislation. These statutory measures contain what U.S. labor rights advothe protection of children and adolescents in employment the protection of elderly persons protection of persons with disabilities.

See COMMUNITY CHARTER OF THE FUNDAMENTAL SOCIAL RIGHTS OF WORKERS, in GEORGE A. BERMANN ET AL., EUROPEAN COMMUNITY LAW SELECTED DOCUMENTS 661-67 (1993) [hereinafter COMMUNITY CHARTER].

9. See Maastricht Treaty on European Union, Protocol and Agreement on Social Policy, Feb. 7, 1992, 31 I.L.M. 247, 357.
10. See COMM'N OF THE EUROPEAN COMMUNrrIEs, COMMUNICATION FROM THE COMMISSION OF THE COMMUNITY CONCERNING ITS ACTION PROGRAMME RELATING TO THE IMPLEMENTATION CHARTER OF BASIC SOCIAL RIGHTS FOR WORKERS

(Nov. 1989). 11. For an explanation of the European Union's institutional framework and the respective roles of the European, Commission, Parliament, Council, Court of Justice and related bodies, see GEORGE A. BERMANN ET AL., EUROPEAN COMMUNITY LAW SELECTED DOCUMENTS 50-95 (1993) (Chapter 3 discusses the Institutions of the Community and the Community Legislative Process). 12. Id. at 51-54. 13. See, e.g., Case C-383/92, Commission v. United Kingdom, 1994 I.C.R. 664, [1994] 2 CEC (CCH) 144 (1994); European Community Cannot Ban Night Work For Women, 9 Employee Rel. Wldy. (BNA) 856 (Aug. 5, 1991). 14. Unilaterally-declared labor rights provisions in U.S. trade laws are found in: (i) The Caribbean Basin Initiative (1983), renewed in the Caribbean Basin Economic Recovery Act (CBERA), 19 U.S.C.A. 2702-2706 (West 1990), providing for duty-free entry of products from the region into the U.S. market, conditioned on compliance with the labor rights provisions of the Generalized System of Preferences (GSP); (ii) The Generalized System of Preferences (GSP), 19 U.S.C.A. 2461-2466 (West 1984), providing for preferential tariff treatment for defined classes of products entering the U.S.

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cates see as essential to effective "linkage": trade sanctions that punish labor rights violators with loss of preferential tariff treatment or privileged

Market from "beneficiary developing countries" as long as they meet conditions for eligibility in the program which include, among others, a requirement that they be "taking steps to afford internationally recognized workers rights to workers in the country"; (iii) The Overseas Private Investment Corporation (OPIC), 22 U.S.C.A. 2191-2200 (West 1985), providing insurance for the overseas investments of U.S. corporations against losses due to war, revolution, expropriation or other factors related to political unrest, as long as the country in which the investments are made meets conditions for eligibility in the program, which include labor rights protections that track the GSP formulation; (iv) The Multilateral Investment Guarantee Agency (MIGA), 28 I.L.M. 1237, providing for U.S. participation in a multilateral insurance program for international investment similar to that of OPIC, wherein U.S. representatives are required to press for labor rights guarantees as a condition of approval for any such insurance; (v) Section 1301 of the Omnibus Trade and Competitiveness Act, also known as Enforcement of U.S. Rights Under Trade Agreements and Response to Certain Foreign Trade Acts, 19 U.S.C.A. 2411-2419 (West 1988), amending Section 301 of the Trade Act of 1974 to include labor rights violations, defined in a fashion similar to that of the GSP formulation, among specified unfair trade practices liable to unilateral retaliation by the United States; (vi) The Andean Trade Preference Act, Pub. L. No. 102-182, 105 Stat. 1233 (1991), applying the same labor rights terms as those of the CBERA for imports from Andean region countries; (vii) Foreign Assistance Programs of the Agency for International Development (AID), 22 U.S.C.A. 2151-2296 (1993), renewed annually since then prohibiting any foreign aid that "contributes to the violation" of worker rights (this labor rights amendment followed exposes in the media of U.S. AID officials in Central America providing funds for companies there to attract "runaway shops" from the United States and to maintain "blacklists" of union activists to avoid labor organizing efforts). See also 60 Minutes: Hiring Rosa Martinez (CBS television broadcast, Sept. 27, 1992); Nightline: Paying to Lose Our Jobs (ABC television broadcast, Sept. 29-30, 1992); (viii) World Bank, International Monetary Fund and other International Financial Institution (IFI) lending programs. See Foreign Appropriations, Export Financing and Related Programs Appropriations Act, Pub. L. No. 103-306, 107 Stat. 1031 (1995), requiring U.S. representatives to use their "voice and vote" to encourage borrowing countries to guarantee internationally recognized worker rights as defined in the GSP formulation and by "relevant conventions of the International Labor Organization." Section 527(a)(2) contains the first explicit linking, in a U.S. labor rights statutory provision, of multilaterally-determined ILO Conventions to the U.S. definition of internationally recognized worker rights. References to ILO Conventions in connection with earlier labor rights provisions were limited to legislative history. See, e.g., 130 CONG. REc. 977-79 (1984) (Report of the House Ways and Means Committee). For more extensive discussion of unilateral United States labor rights legislation, see JOHN CAVANAGH ET AL., TRADE'S HIDDEN COSTS (1988); Theresa Amato, Labor Rights Conditionality: United States Trade Legislation and the International Trade Order, 65 N.Y.U. L. REV. 79 (1990); Terry Collingsworth, American Labor Policy and the InternationalEconomy: Clarifying Policies and Interests, 31 B.C. L. REV. 31 (1989); ConditioningTrade on ForeignLabor Law: The U.S. Approach, 9 COMP. LAB. LJ. 253 (1988); Harlan Mandel, In Pursuit of the Missing Link: InternationalWorker Rights and International Trade?, 27 COLUM. J. TRANSNAT'L L. 443 (1989); Jorge Perez-Lopez, The Promotion of InternationalLabor Standards and NAFTA: Retrospect and Prospects, 10 CONN. J. INT'L L. 427 (1995).

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access to the U.S. market for their products. In one of the first of those statutes, that governing the Generalized System of Preferences (GSP), the labor rights amendment contains a definition of "internationally recognized worker rights" that has served as the point of reference for most of the others." The formulation of those "internationally recognized" rights in the GSP statute is entirely a product of the U.S. legislative process. The statute makes no reference to ILO Conventions achieved by international consensus covering the same rights. 6 Moreover, the mechanisms created to implement these statutes are entirely domestic in character. U.S. executive agencies conduct all reviews and render all decisions that involve the application of trade sanctions under the statutes. 7 Whatever judicial review exists is available only in U.S. courts.' In sum, the thrust of U.S. policy-making on labor rights and trade since the early 1980s has been unilateral in nature.'

15. See 19 U.S.C.A. 2462(a)(4) (West 1984). The GSP labor rights clause defines the following as "internationally recognized worker rights" that must be afforded to maintain eligibility in the program: 1) the right of association; 2) the right to organize and bargain collectively; 3) prohibitions on forced labor, 4) limitations on child labor, 5) acceptable conditions with respect to minimum wage application, limits on working hours, and occupational safety and health. Id. 16. ILO Conventions on these subjects contain more elaborate and nuanced treatment of the complexities inherent in each of them. See, e.g., Convention No. 87 Concerning Freedom of Association and Protection of the Right to Organize (1948); Convention No. 98 Concerning the Application of the Principles of the Right to Organize and to Bargain Collectively (1949); Convention No. 103 Concerning the Abolition of Forced Labor (1957); Convention No. Il l Concerning Discrimination in Respect of Employment and Occupation (1958); Convention No. 138 Concerning Minimum Age for Admission to Employment (1973); and various Conventions dealing with wages, hours and working
conditions, in INT'L LAB. ORG., CONVENTiONS AND RECOMMENDATIONS 1919-1991 (1992).

To date, the ILO has adopted 176 Conventions. Most deal with working conditions in specific industries or employment sectors. Those noted above are considered to constitute a "human rights core" of ILO Conventions. See INr'L LAB. ORG., supra note 3. The U.S. formulation omits a critical, universal labor rights norm with respect to non-discrimination in employment. For a discussion, see Karen Travis, Women in Global Productionand Worker Rights Provisions in U.S. Trade Laws, 17 YALE J. INT'L L. 173 (1992). 17. See, for example, Regulations of the USTR Pertaining to Eligibility of Articles and Countries for the Generalized System of Preferences Program, 15 C.F.R. 2007 (1994), which lays out the administrative procedures for dealing with worker rights petitions, among others. 18. See Int'l Labor Rights Educ. & Research Fund v. Bush, 752 F. Supp. 495 (D.D.C. 1990), affd, 954 F.2d 745 (D.C. Cir. 1992). 19. It is important to point out that while unilateralism has dominated U.S. labor rights policy, a more multilateral approach has been pursued, at least in principle, by the United States in the GATT

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The 1993 NAFTA labor side accord (NAALC) is an international labor rights instrument negotiated by the three governments of North America. As such, it represents the beginning of a substantive movement away from the unilateralism that has dominated U.S. international labor rights policy. But the move is not a decisive one. First, the United States' unilateral labor rights statutory regime remains in place. Second, the NAALC maintains a number of unilateralist features within a multilateral framework. Indeed, one of the chief criticisms of the NAALC by NAFTA's opponents was its failure to approximate the European Union's "social charter" approach, with common standards and "upward harmonization" objectives.2" This paper seeks to analyze the evolution of U.S. trade and labor rights policy with respect to unilateralism and multilateralism, using as points of reference the unilateral labor rights provisions of the Generalized System of Preferences, on one hand, and the multilateral approach of the European Union on the other hand. Part I discusses the principal criticisms of the unilateral approach reflected in the statutory regime described above, and offers a defense to those criticisms. Part H looks at the substantial movement of the NAFTA labor side accord and the framework it creates reflecting a multilateral approach to labor rights concerns akin, in many respects, to the European approach. Part III examines how, notwithstanding such movement, strongly unilateral features still mark the NAALC labor rights regime. Part IV, in conclusion, draws from the earlier discussion to inform the continuing debates on labor rights and labor standards in North American trade, particularly with respect to the proposed accession of Chile to the NAFTA and future expansion of free
context as far back as the late 1940s. For analysis of the early efforts of the U.S. in the GA'T context, see Steve Chamovitz, The Influence of International Labour Standards on the World Trading Regime, 126 INT'L LAB. REv. 565 (1987). The United States' multilateral approach has not borne fruit except that, in completing the Uruguay Round, trade ministers agreed to "discuss" a "request" that the labor fights-trade linkage issue be "taken up" by a "Preparatory Committee" among "suggestions" for "inclusion" as an "additional item in the agenda" of the new World Trade Organization. A more roundabout treatment of the subject could hardly be formulated. See Sergio Abreu Bonilla, Chairman of the Trade Negotiations Committee, Minister of Foreign Affairs of the Eastern Republic of Uruguay, Concluding Remarks, U.N. Doc. MTN.TNC/MIN (94)/62 (Apr. 15, 1994) (transcript available with author). For a generous journalistic account, see Alan Riding, U.S. Envoys Gain a Forum for Labor Issues in Trade, N.Y. TIMEs, Apr. 8, 1994, at DI. For an account of developments in the GATT context since the Charnovitz analysis noted above, see Perez-Lopez, supra note 14, at 440-445.
20. See INT'L LAB. RTS. EDUC. & RESEARCH FUND, U.S. CITZENs' ANALYSIS OF THE NORTH

AMERICAN FREE TRADE AGREEMENT 26-27 (Dec. 1992); see also Michael S. Barr et al., Labor and Environmental Rights in the Proposed Mexico-United States Free Trade Agreement, 14 Hous. J. INT'L L. 1 (1991).

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trade agreements in the hemisphere.

II. EXPERIENCE UNDER THE U.S. UNILATERAL LABOR RIGHTS REGIME

Unilateral labor rights provisions in U.S. law reviewed above have been variously tested since their inception in the early 1980s." The first, in the Caribbean Basin Initiative, led to a modest opening for trade union activity in Haiti during the regime of Jean-Francois "Baby Doc" Duvalier before his abdication in 1986.22 The Overseas Private Investment Corporation [OPIC] labor rights clause led to the removal from OPIC insurance coverage for U.S. corporate investments in China, Saudi Arabia and South Korea.23 New constraints on Agency for International Development [AID] funding projects ended U.S. taxpayer support for trade expositions designed to lure businesses from the United States.24 The most highly developed treatment of international labor rights and labor standards in the U.S. statutory scheme has taken place under the GSP. The GSP statutory provision was followed by detailed administrative regulations providing for a quasi-judicial process of petitioning, responding, holding public hearings, presenting written evidence and oral testimony, and filing briefs and counter-briefs by the "parties. ' In general, trade unions and human rights organizations filed petitions to challenge a country's status in the GSP program because of alleged labor rights violations, and the governments and employer associations from the country so charged responded in the administrative process. Dozens of such cases have been filed by labor and human rights groups and processed by the Office of the United States Trade Representative (USTR). These cases have resulted variously in removal or suspension from GSP beneficiary status, continuing review by the USTR-a kind of "probationary" status without loss of GSP benefits, or (in the majority of cases) a finding that the country is "taking steps to afford" workers' rights in compliance with the statute.2

21. Some are yet untested. There has never been an action brought under the labor rights clause of Section 301 of the Trade Act, for example. Experience under the new labor rights provision on U.S. "voice and vote" for World Bank loans is also so new that its effects cannot yet be evaluated. 22. See Steve Charnovitz, Caribbean Basin Initiative: Setting Labor Standards, MONTHLY LAB. REv., Nov. 1984, at 54-56. 23. See James M. Zimmerman, The Overseas Private Investment Corporation and Worker Rights: The Loss of Role Models for Employment Standards in the Foreign Workplace, 14 HASTINGS INT'L & COMP. L. REv. 603, 603-18 (1991). 24. Pub. L. No. 102-391, 106 Stat. 1633 (1992). 25. See supra note 17. 26. Decisions in cases reviewed under the GSP labor rights provision are not published, but are

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The application of the GSP labor rights provision by successive U.S. administrations has been sharply criticized on all sides. It has been analyzed in a scholarly mode as a manifestation of "aggressive unilateralism" in U.S. trade policy.27 It has been attacked by foreign governments as simply an excuse for protectionism. The foreign press has denounced it as interference in their internal affairs.29 Left-wing radical activists in the developing countries have echoed the views of the very governments they oppose, saying that the push for a labor standards-trade linkage "is prompted, not by feelings of goodwill and solidarity with Third World workers, but protectionist motives aimed against competitive imports from the South."3 At the same time, U.S. labor rights advocates most supportive of the principle of strong unilateral action to enforce international fair labor standards have been disappointed to such an extent that they sued the U.S. government for failing to enforce the law.3 Professor Alston fashions a four-fold critique of the unilateral approach of the GSP labor rights program: 1) that it mistakenly claims to rest on "internationally recognized

available at the Public Information room at the Office of the United States Trade Representative in Washington, D.C. For a summary, see GENERAL ACCOUNTING OFFICE, ASSESSMENT OF THE GENERALIZED SYSTEM OF PREFERENCES PROGRAM, in GAO/GGD-95-9, 97-126 (Nov. 1994). 27. See Philip Alston, Labor Rights Provisions in U.S. Trade Law: "Aggressive Unilateralism?", 15 HuM. RTS. Q. 1 (1993). Professor Alston answered in the affirmative. For a broader discussion of "aggressive unilateralism" in U.S. trade policy, see AGGRESSIVE UNILATERALISM: AMERICA'S 301
TRADE POLICY AND THE WORLD TRADING SYSTEM (Bhagwati & Patrick eds., 1990).

28. "When the issue of human rights is linked to trade, investment and finance, we cannot but view that as protectionism by other means," says Malaysian Prime Minister Mahathir Mohamad, an outspoken advocate of the authoritarian industrial state. See Mark Magnier, ASEAN Nations Lash Out at West for Tying Human Rights to Trade, J. COM., July 23, 1991, at A3. 29. See, e.g., lBoicot al gobierno o a los guatemaltecos?, EL GRAFICO (Guatemala), June 16, 1992, at 8: "Eso es lo absurdo de los norteamericanos cuando meten sus narices en los asuntos internos de otros pueblos .... Si hay un pueblo que ha sido a lo largo de su historia violador de los derechos humanos, ha sido los Estados Unidos." (This is the absurdity of the Americans when they stick their nose into the internal affairs of other peoples . . . . If there is one people that has been throughout its history a violator of human rights, it has been the United States.). 30. See Martin Khor, The World Trade Organization, Labour Standards and Trade Protectionism, 45 THIRD WORLD RESURGENCE 30 (1994).

31. See Int'l Labor Rights Educ. & Research Fund v. Bush, 752 F. Supp. 495 (D.D.C. 1990), aftd, 954 F.2d 745 (D.C. Cir. 1992). The twenty-three plaintiffs included every trade union or human rights organization that had ever filed a petition under the GSP labor rights amendment. The federal district court dismissed the complaint on justiciability grounds; namely, that the statute was so loosely drawn that it failed to set a standard against which Administration conduct could be measured. Dismissal was sustained by a divided appeals court panel on other procedural grounds, one judge saying that the case should have been heard by the Court of International Trade; another saying that none of the plaintiffs had standing to sue. Id. The third judge would have reversed the District Court and let the case go forward to trial. Id.

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worker rights" when in fact its substantive definition of such rights differs from ILO Conventions and other international instruments, including 32 the GSP provision's failure to include non-discrimination in its definition; 2) that it purports to hold other countries to obligations to which 33 they have not in fact bound themselves; 3) that it undermines both genuine international standards of the ILO, and its own attempt to fashion universal "rights," by permitting deviation from standards of conduct based on a country's level of development;34 and 4) that the procedural mechanism created by the regulations and the decisions of the Trade Policy Staff Committee are characterized by a lack of due process, lack of transparency, lack of consistency, lack of expertise 5 3
and lack of logic.

Professor Alston also weaves another important critical point into his analysis: the hypocrisy in U.S. insistence that other countries abide by "internationally recognized" standards when the United States has itself failed to ratify nearly every relevant ILO Convention.36 Alston concludes that the United States should turn its efforts toward multilateral standards and procedures, particularly within the ILO framework.37 The International Labor Rights Education and Research Fund (ILRERF) and other advocates of "linkage" who support unilateral labor rights enforcement find sufficiently clear definitions and binding obligations in the GSP statute as it is written.3" While they are briefly stated, the definitions of "internationally recognized" worker rights in the statute reflect the essence of relevant UN human rights instruments and ILO Conventions-the right of association and the right to organize and bargain collectively, for example. They even convey, again in abbreviated fashion, some of the subtleties of ILO definitions-as with the difference

32. See Alston, supra note 27, at 6-12. 33. Id. at 12-16. 34. Id. at 16-19. 35. Id. at 19-23. 36. Id. at 29-32. The United States has ratified eleven of the 176 ILO Conventions. Most of them concern hours and conditions of work in particular industries, especially maritime. Only one of the eleven is part of the ILO's "core" human rights conventions: Convention No. 105 on the abolition of forced labor, which the United States ratified in 1991. 37. Id. at 33-35. 38. See Brief for Plaintiff, Int'l Labor Rights Educ. & Research Fund v. Bush, 752 F. Supp. 495 (1990), affid, 954 F.2d. 745 (1992). For extended discussion, see Terry Collingsworth, Labor Rights Fund v. Bush: Proposals Following a Test Case, in HUMAN RIGHTS, LABOR RIGHTS AND INTERNATIONAL TRADE: LAW AND POLICY PERSPECTnVES (Lance A. Compa & Stephen F. Diamond eds., forthcoming 1996).

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in the GSP clause between "a prohibition" on forced labor and "a minimum age" (without specifying the age) for child labor, rather than "a prohibition" on child labor.39 The absence of a non-discrimination clause in the U.S. statutory scheme is a result of an unavoidable political compromise demanded by the then-minority Republican members of the House Ways and Means Committee. They insisted that an "international Title VII" was too much to include in the bill, and that they would recommend a veto by President Reagan if the non-discrimination clause remained. Labor rights advocates compromised on this point, agreeing to drop the clause in exchange for bipartisan support for the bill.' Most of the countries that have been a subject of GSP labor rights petitions have ratified one or more of the ILO Conventions covering the rights claimed to have been violated. Where they have not, they are still-if they are members of the ILO-bound by Convention 87 on Freedom of Association and Protection of the Right to Organize, which the ILO holds to be an obligation of membership in the organization regardless of whether a country has ratified it.' As mentioned above, ILO Conventions do allow flexibility in certain areas corresponding to a country's level of development. In advising embassy human rights officers on the application of the labor rights clause under U.S. law, the State Department draws an essential distinction between flexibility that applies to child labor laws, minimum wages, hours of work, health and safety standards, and other working conditions that depend on a country's level of development, on one hand, and rights of association, organizing and bargaining and prohibition of forced labor on the other hand, where no flexibility is permitted.42 Defenders of unilateral U.S. labor rights policy agree with Alston's fourth point. They sought judicial review to force the United States Trade Representative to consistently apply the statute, rather than use it as a policy tool to reward friends and punish enemies.43 The ILRERF law-

39. The relevant ILO Conventions require "abolition" of forced labor, but specify every age between 12 and 18 as "a minimum" for admission to employment under certain conditions, such as the nature of the work to be performed, and according to a country's level of development. See ILO Conventions 105 & 138, in INT'L LAB. ORG., CONVENTIONS AND RECOMMENDATIONS 1919-1991 (1992). 40. See Travis, supra note 16, at 178. 41. See INT'L LAB. ORG., supra note 3, at 14-20.
42. See U.S. DEP'T OF STATE, COUNTRY REPORTS ON HUMAN RIGHTS PRACTICES FOR 1994

App. B (1995). 43. See Int'l Labor Rights Educ. & Research Fund v. Bush, 752 F. Supp. 495 (D.D.C. 1990),

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suit" was unsuccessful,45 and labor rights advocates have turned their attention to legislative reform to cure the deficiencies in the GSP labor rights clause in light of the court decisions.' But a balanced assessment of the GSP labor rights regime would not reach the uniformly negative conclusions of its critics. Leaving aside whether it is proper, under the statute, for the Administration to use it as a discretional policy tool, the GSP labor rights "linkage" did serve to improve worker rights in certain concrete situations throughout the hemisphere. In Chile and in Paraguay, for example, the 1987 loss of GSP beneficiary status because of worker rights violations under the longstanding military dictatorships of General Augusto Pinochet and General Alfredo Stroessner contributed to the restoration of democracy in those countries. Business interests formerly comfortable with military rule and suppressed labor movements, now facing economic sanctions under the labor rights provisions of the Generalized System of Preferences just when they hoped to expand their exports to the United States, joined calls by labor, human rights, and other democratic forces for the generals to step down.' In Guatemala, the application of a "continuing review" status under the labor rights clause, with the potential for a cutoff of GSP benefits, surfaced as the chief U.S. policy instrument in reversing a military-backed auto-golpe (self-coup) by then-president Jorge Serrano in 1992."9 The

affd, 954 F.2d 745 (D.C. Cir. 1992). Politically-motivated inconsistency in administration of the GSP worker rights clause was reflected, for example, in decisions to remove or suspend Nicaragua, Chile and Paraguay from the program, while not taking such action in cases involving El Salvador, Haiti, Guatemala, and others with an equal or worse record of labor rights violations. See Alston; supra note 27, at 21-22. 44. The ILRERF lawsuit refers to Int'l Labor Rights Educ. & Research Fund v. Bush, 752 F. Supp. 495 (D.D.C. 1990), affd, 954 F.2d 745 (D.C. Cir. 1992). 45. See supra note 31. 46. H.R. 3625, 103d Cong., 1st Sess. (1993). See Collingsworth, supra note 38, for a discussion of proposed reforms that took shape in legislation. The bill sought to, among other goals, revise the "taking steps" formulation, make enforcement mandatory instead of discretionary, confer standing on trade unions and human rights organizations, specify federal court jurisdiction, and add a non-discrimination clause to the definition of "internationally recognized worker rights." Congress did not act to extend the GSP in 1994, and will take up the issue again in 1995. 47. See Petitions on Chile filed by the United Electrical, Radio & Machine Workers of America (UE) and American Federation of Labor-Congress of Industrial Organizations (AFL-CIO) (1987), and Petition on Paraguay filed by the AFL-CIO (1987) (on file with United States Trade Representative Office). Both countries were suspended from the GSP program in 1988; the ruling generals stepped down from power in 1989-90, and the countries were restored to GSP beneficiary status in 1991. 48. Paul H. Adams, Note, Suspension of Generalized System of Preferences-The Proper Use of a Trade Provision?,23 GEO. WASH. J. INT'L L. & ECON. 501-30 (1989). 49. See Lance Compa, International Labor Rights and the Sovereignty Question: NAFTA and

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application of "continuing review" status also helped preserve the establishment of trade unions in several sectors of Guatemalan industry." In the Dominican Republic, pressure generated by the GSP labor rights scrutiny brought substantial reform of the labor code and new union organizing gains in the export processing sector. The most prominent U.S. labor rights advocates concede that effective multilateral action is preferable, in principle, to the United States acting alone. 2 The problem is precisely that of effectiveness. After an extensive reporting and oversight mechanism, the ILO does not have any means but the "mobilization of shame" to enforce compliance with its Conventions by countries found to be in violation of them. 3 Indeed, Professor Alston acknowledges that "multilateralism has always tended to attract more than its fair share of idealistic but naive and largely impractical proposals." 4 For labor rights "linkage" to trade policies to be anything more than a subject of academic papers, some form of economic, not just moral, sanctions must be applied. As Doctor Johnson suggested about the powers of concentration that come with the prospect of being hanged in a fortnight, the prospect of lost orders or lost market access because of labor rights violations focuses the minds of multinational corporate managers and government trade, finance and labor ministries on doing something to correct labor abuses and avoid sanctions. This critical element is missing in most international human rights regimes," but it is contained in the

Guatemala, Two Case Studies, 9 AM. U. J. INT'L L. & POL'Y 117 (1993).

Why Mr. Serrano launched his palace coup in the first place ... was never entirely clear. But the reasons for his downfall were clearer. Most important, it seems, was the concern of business leaders that Guatemala's rising exports to the United States and Europe could be devastated if threatened sanctions were imposed. Within hours of an American threat to cut Guatemala's trade benefits, business leaders who in the past had supported authoritarian rule began pressing government and military officials to reverse Mr. Serrano's action. Id. at 145 (citing Tim Golden, Guatemala'sCounter-Coup: A Military About-Face, N.Y. TIMES, June 3, 1993, at A3). 50. Compa, supra note 49, at 142. 51. See Dominican Workers Win Major Organizing Victories in Free Trade Zones, JUSTICE, Dec. 1994, at 5.
See CAVANAGH ET AL., supra note 14, at 41-53. Lee Swepston, Human Rights Complaint Procedures of the InternationalLabour Organization, in HURST HANNUM, GUIDE TO INTERNATIONAL HUMAN RIGHTS PRACTICE 99-116 (1992). 52. 53.

54. Alston, supra note 27, at 33-34. 55. For a discussion of the "enforcement" problem in international human rights law, see Richard B. Bilder, Rethinking InternationalHuman Rights: Some Basic Questions, 1969 WIs. L. REv. 171 (1969), reprinted in 2 HUM. RTS. J. 557 (1969).

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unilateral statutory regime created under U.S. labor rights clauses in trade statutes. III. FROM UNILATERALISM IN THE GSP To MULTILATERALISM IN THE NAALC The question rightly posed in Professor Alston's critique is whether selective improvements in labor rights under certain circumstances (mainly, the country's need for access to the U.S. market and the resulting leverage of U.S. policy) justify the "aggressive" unilateralist method, with its purported undermining of international law and multilateralist principles.56 The development of the North American Agreement on Labor Cooperation (NAALC) suggests that the United States is beginning to approach labor rights issues in a fashion more consonant with international law and multilateral principles. In the first place, the Free Trade Agreement itself is a product of negotiation by three sovereign partners designed to remove all tariff and non-tariff barriers to trade. This removal will have the effect of obviating, in the case of Mexico, any need for or advantage from beneficiary status under the GSP or other unilateral U.S. trade program that grants tariff concessions to developing countries. Mexico's status as a GSP beneficiary developing country was challenged under the GSP labor rights clause in a 1993 petition filed by ILRERF. The petition cited restrictions on public employee unionization, military intervention to break strikes, favoritism toward government-controlled "official" unions, and discrimination against independent unions, among several alleged violations of fundamental labor rights.57 The decision of the Trade Policy Staff Committee (the U.S. interagency body chaired by USTR that decides GSP worker rights cases) acknowledged "certain shortcomings," but noted that "[tihe negotiation of the North American Agreement on Labor Cooperation, as a supplement to the NAFTA, demonstrates Mexico's determination to improve its worker rights and provides the United States with a means for ensuring that Mexico continues to improve its labor standards."" Mexico has been removed from GSP beneficiary status not for labor rights concerns or some other eligibility requirement, but simply because

56. See Alston, supra note 27, at 28-29. 57. See INT'L LAB. RTS. EDUC. & RESEARCH FuND, PETITION/REQUEST FOR REVIEW OF THE GSP STATUS OF MEXICO UNDER GSP WORKERS RIGHTS PROVISIONS (June 1, 1993).

58. See GSP SUBCOMMITTEE OF THE TRADE POLICY STAFF COMMITTEE, 1993 REVIEW-WORKER RIGHTS SUMMARY: MEXICO (Case No. 013-CP-93, Oct. 1993).

GSP

ANNUAL

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the GSP has become irrelevant to Mexico. Mexico is now integrated into a continental trade accord covering the three nations of North America. As new entrants accede to the NAFTA in years ahead, they also will escape the scrutiny and potential sanctions applicable under the GSP and other statutory labor rights regimes. Now the question posed by Professor Alston at the opening of this section can be turned around: does the NAFTA labor side agreement create a model for a hemispheric labor rights regime such that it justifies the abandonment of the unilateral approach? On its face, the NAALC contains reasonably precise and trilaterally negotiated definitions of labor rights and labor standards,59 and binds

59. See NAALC, supra note 1, at art. 49 (defining "labor law") & Annex 1 (defining "Labor Principles"). Article 49 "LABOR LAW" means laws and regulations, or provisions thereof, that are directly related to: (a) freedom of association and protection of the right to organize; (b) the right to bargain collectively; (c) the right to strike; (d) prohibition of forced labor, (e) labor protections for children and young persons; (f) minimum employment standards, such as minimum wages and overtime pay, covering wage earners, including those not covered by collective agreements; (g) elimination of employment discrimination on the basis of such grounds as race, religion, age, sex, or other grounds as determined by each Party's domestic laws; (h) equal pay for men and women; (i) prevention of occupational injuries and illnesses; (j) compensation in cases of occupational injuries and illnesses; (k) protection of migrant workers[.] ANNEX 1 LABOR PRINCIPLES 1. Freedom of associationand protection of the right to organize The right of workers exercised freely and without impediment to establish and join organizations of their own choosing to further and defend their interests. 2. The right to bargain collectively The protection of the right of organized workers to freely engage in collective bargaining on matters concerning the terms and conditions of employment. 3. The right to strike The protection of the right of workers to strike in order to defend their collective interests. 4. Prohibitionof forced labor The prohibition and suppression of all forms of forced or compulsory labor, except for types of compulsory work generally considered acceptable by the Parties, such as compulsory military service, certain civic obligations, prison labor not for private purposes and work exacted in cases of emergency. 5. Labor protections for children and young persons

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equally the three trading partners that signed the labor side accord. The NAALC establishes a hierarchical framework that begins, at the highest level, with a Council composed of the labor ministers of the three countries' who supervise the implementation of the Agreement. Below them is a Labor Secretariat6 made up of a Director appointed by the Council and a fifteen-person staff drawn from lists supplied by each of the three countries' labor ministers.62 The Secretariat serves as Council staff conducting the day-to-day work of implementing the Agreement.63 The NAALC provides for two ad hoc multilateral bodies to take up issues or disputes under its terms: a three-person "Evaluation Committee of Experts" to undertake "non-adversarial" analysis and recommendations,' and a five-person "Arbitral Panel" empowered to find violation

The establishment of restrictions on the employment of children and young persons that may vary taking into consideration relevant factors likely to jeopardize the full physical, mental and moral development of young persons, including schooling and safety requirements. 6. Minimum employment standards The establishment of minimum employment standards, such as minimum wages and overtime pay, for wage earners, including those not covered by collective agreements. 7. Elimination of employment discrimination Elimination of employment discrimination on such grounds as race, religion, age, sex or other grounds, subject to certain reasonable exceptions, such as, where applicable, bona fide occupational requirements or qualifications and established practices or rules governing retirement ages, and special measures of protection or assistance for particular groups designed to take into account the effects of discrimination. 8. Equal pay for women and men Equal wages for women and men by applying the principle of equal pay for equal work in the same establishment. 9. Prevention of occupational injuries and illnesses Prescribing and implementing standards to minimize the causes of occupational injuries and illnesses. 10. Compensation in cases of occupationalinjuries and illnesses The establishment of a system providing benefits and compensation to workers or their dependents in cases of occupational injuries, accidents or fatalities arising out of, linked with or occurring in the course of employment. 11. Protection of migrant workers Providing migrant workers in a Party's territory with the same legal protection as the Party's nationals in respect of working conditions. 60. Id. at art. 9; in the United States, the Secretary of Labor, in Canada, the Minister of Human Resources Development; in Mexico, the Minister of Labor and Social Security. 61. Id. at art. 12. 62. Under an informal agreement, a Canadian heads the Dallas, Texas-based NAALC Labor Secretariat, a Mexican heads the Montreal, Quebec-based Environmental Secretariat, and an American head the Mexico City, D.F.-based Trade Secretariat. Future directorships would rotate among other nationalities. 63. NAALC, supra note 1, at arts. 13-14. 64. Id. at arts. 23-24.

U.S. HEMISPHERIC LABOR RIGHTS POLICY

of the Agreement and to recommend sanctions under it.65 Members of both an ECE and an Arbitral Panel are drawn from lists of independent, private sector experts from the three countries, and at least one person from each country must be on each ECE or Panel.' At a first level of NAALC treatment, below that of the ECEs, are three entities called the National Administrative Offices (NAO).67 These are hybrid bodies, domestic in form but extraterritorial in function. Each NAO is a strictly domestic agency, housed in each country's ministry of labor and staffed by its own citizens. However, the mission of an NAO crosses the border. It has no power to review matters in its own country. It is only empowered to review "labor law matters arising in the territory of another Party." 8 The NAFTA labor side accord thus contains important multilateral instruments and mechanisms for implementing its terms. In some respects it is quite similar to the regime created by the European Union for application of the European Social Charter: a formulation of basic labor rights and standards (the EU's twelve-point Community Charter, and the NAALC's eleven-point definition of labor law and corresponding Labor Principles);69 a multilateral Council (the EU Council of Ministers, and the NAALC Council of labor ministers) overseeing the work of a multinational executive staff (the EU Commission, and the NAALC Secretariat), with dispute resolution by a multinational adjudicating body (the European Court of Justice, and the NAALC Evaluation Committees and Arbitral Panels). One might fairly conclude, based on these similarities, that the NAALC overcomes the objections to the unilateralist labor rights policy of the United States in the decade that preceded the implementa-

65. Id. at arts. 29-41. 66. For a thorough discussion of the structures created by the NAALC, see Jorge Perez-Lopez, The Institutional Framework of the North American Agreement on Labor Cooperation, 3 U.S. MEX. L.J. 133-147 (1995). 67. NAALC, supra note 1, at art. 15. 68. Id. at art. 16(3) (emphasis added). The first reviews conducted by the U.S. NAO involved events in the maquiladora factory zone of Mexico, along the border with the United States, where two large U.S.-based multinational corporations allegedly discharged several workers for seeking to form a union. For an extended analysis, see Lance Compa, The First NAFTA Labor Cases: A New International Labor Rights Regime Takes Shape, 3 U.S. MEX.L.J. 159 (1995). The first case brought before the NAO of Mexico dealt with the actions of a large U.S. company which allegedly closed a facility in California to forestall a union organizing effort by its mostly Mexican-American workforce. See Tim Shorrock, Mexican Trade Union Steps in to Defend U.S. Workers' Rights, J. COM., Feb. 13, 1995, at A3. 69. See COMMUNITY CHARTER, supra note 8; see also NAALC, supra note 1, at art. 49 & Annex 1.

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tion of NAFTA and the NAALC. This leads to a further conclusion that this superior, multilateral labor rights regime should supplant the unilateral scheme under U.S. law, and that new entrants acceding to the NAFTA should come under its terms rather than be subjected to continued unilateral treatment.
IV. UNILATERALIST FEATURES OF THE

NAALC

Having examined new, multilateral features in the NAFTA labor side agreement as compared to the unilateral U.S. approach embodied in the GSP program, and pointed out certain parallel multilateral elements in the NAALC and the European Union's labor rights regimes, it is now necessary to take a step back. One should not overstretch the analogy to the European Union, and the movement toward multilateralism in the NAALC should not be overstated. The form of the NAALC and its supervising mechanisms approximates the model of the European Union in many respects. But the substance of the labor side accord, and of NAFTA as a whole, is still far short of the level of integration achieved in Europe. Besides social policy, EU members coordinate economic, monetary and military policies and trade relations outside the region, and have set a goal of achieving a common currency.7" A directly-elected European Parliament plays an increasingly important role in EU affairs.7 The European Court of Justice exercises genuine powers of judicial review.72 NAFTA and the NAALC are hardly comparable to that level of multilateralism. At the same time it moves toward multilateralism, the labor rights regime established by the NAALC retains strongly unilateral features stressing sovereignty in each country's internal labor affairs. The Agreement recognizes "the right of each Party to establish its own domestic
labor standards."73 The core obligation assumed by the NAALC parties

is to "effectively enforce its labor law."74 The NAALC negotiators took pains to declare that "[n]othing in this Agreement shall be construed to empower a Party's authorities to undertake law enforcement activities in
the territory of another Party."" The definition of "Labor Principles"

emphasizes that they "do not establish common minimum standards for

70. 71. 72. 73. 74. 75.

See BERMANN ET AL., supra note 11, at 16-21.

Id. at 63-68. Id. at 96-165. NAALC, supra note 1, at art. 2 (emphasis added). Id. at art. 3(1) (emphasis added). Id. at art. 42.

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their domestic law. 76 One of the strongest criticisms of the NAALC comes from trade unionists and labor rights advocates regarding the accord's three-tiered hierarchy of review and enforcement, which excludes rights of association and organizing, collective bargaining, and the right to strike from any multilateral consideration or enforcement mechanism." Of the eleven defined "labor law" matters and "labor principles," only three-those regarding minimum wage, child labor, and occupational safety and health laws-may go forward to dispute resolution treatment by a multilateral Arbitral Panel, with possible trade sanctions to back up a Panel decision. 71 Five more of eight so-called "technical labor standards," namely those regarding forced labor, employment discrimination, equal pay for men and women, workers compensation (for job-related injuries or illnesses), and migrant workers, are susceptible to treatment by a multilateral Evaluation Committee of Experts. 79 Three fundamental labor rights of association and organizing, collective bargaining, and the right to strike cannot be the subject either of ECE analysis and recommendation or of 0 They are only subject to Arbitral Panel dispute settlement." a "review" and a "report" by a domestic NAO (though, as noted above, by an NAO

76. Id. at Annex 1. The full clause reads: "The following are guiding principles that the Parties are committed to promote, subject to each Party's domestic law, but do not establish common minimum standards for their domestic law. They indicate broad areas of concern where the Parties have developed, each in its own way, laws, regulations, procedures and practices that protect the rights and interests of their respective workforces." 77. See Pharis Harvey, Failure of the Labor Side Agreement, in NAFTA's FIRST YEAR: LESSONS FOR THE HEMISPHERE 12-19 (Anderson et al. eds., 1994) (U.S. Citizens Analysis sponsored by Alliance for Responsible Trade, Citizens Trade Campaign, Trade Research Consortium) (on file with author). 78. NAALC, supra note 1, at arts. 27-41. 79. NAALC Article 49 makes a highly significant definition of technical labor standards: "technical labor standards' means laws and regulations, or specific provisions thereof, that are directly related to subparagraphs (d) through (k) of the definition of labor law." Id. at art. 49. Subparagraphs (a), (b) and (c) cover the right of association, the right to organize and bargain, and the right to strike; they are not "technical labor standards." Id. at art. 4 9(a)-(c). 80. This feature was probably the single greatest focus of attack on the labor side accord by NAFTA critics and worker rights advocates. See, e.g., Jefferson Cowie & John D. French, NAFTA's Labor Side Accord: A Textual Analysis, 9 LATIN AM. LAB. NEWS 5, 6 (1993-94) (a publication of the Center for Labor Research and Studies of Florida International University) ("the side agreement specifically excludes from its authority the key aspects of labor law that would allow workers to resist the downward pressure of globally competitive employers"); Thomas L. Friedman, The Free Trade Accord: The President; Adamant Unions Zero in on Clinton, N.Y. TIMES, Nov. 16, 1993, at BI0; Peter T. Kilborn, Unions Gird for War over Trade Pact, N.Y. TIMES, Oct. 4, 1993, at AI4.

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of another NAFTA partner). " The problems inherent in this aspect of the NAALC are evident. With domestic enforcement of domestic law as the guiding principle, Mexico's extremely low minimum wage-three dollars a day, following the devaluation of the peso 82-- or its permission for fourteen-year-old children to work in industry,83 or the feature of its union organizing law that permits employers to dismiss, with statutory severance pay, workers who seek to organize a union 4 could not be modified under NAFTA. Likewise, U.S. laws permitting the permanent replacement of strikers 5 and denying collective bargaining rights to farmworkers, domestic workers and many public sector employees cannot be rectified under NAFTA. What are arguably the most important labor rights, the rights of association, organizing, and bargaining, are not subject to the heightened oversight mechanism of an Evaluation Committee of Experts, nor to dispute resolution before an arbitral panel. The latter is the only locus of treatment under the NAALC where actual trade sanctions can back up a finding of worker rights violations. Significantly, these labor rights are included in the GSP and other unilateral labor rights clauses in U.S. trade statutes where loss of trade benefits can be applied against repeated, systematic violations. Critics argue that there is no plan in the NAFTA for an "upward harmonization" of labor rights and standards, even over a long term. They see the alternative as a "downward harmonization" in what is often called a "race to the bottom" by employers seeking lower labor costs and weakened labor protections.86 NAALC critics were not encouraged by the results of the first cases arising under the NAALC.87 The U.S. NAO narrowly construed the scope of its review to address only Mexico's enforcement of its domestic

81. NAALC, supra note 1, at art. 16(3). 82. See Allen R. Myerson, Peso's Plunge May Cost Thousands of U.S. Jobs, N.Y. TIMEs, Jan. 30, 1995, at DI.
83. FEDERAL LABOR LAW OF MEXICO arts. 173-180.

84. This was the key issue in the first cases to arise under the NAALC in submissions to the U.S. NAO involving the dismissal of several union activists by General Electric and Honeywell in Mexican maquiladora factories. See U.S. NAT'L ADMIN. OFFICE, PUBLIC REPORT OF REVIEW (Oct. 12, 1994) (on file in U.S. NAO Public Documents Room, Washington, D.C.). For an extended discussion, see Compa, supra note 68. 85. See NLRB v. MacKay Radio & Telegraph Co., 304 U.S. 333 (1938). 86. Harvey, supra note 77. 87. See Allen R. Myerson, U.S. Backs Mexico Law, Vexing Labor, N.Y. TIMES, Oct. 13, 1994, at D1; Asra Q. Nomani, Unions Angry After Administration Rejects Complaints About Mexico Plants, WALL ST. J., Oct. 14, 1994, at A2.

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labor law in cases alleging anti-union firings of labor organizers by General Electric Company and Honeywell Corporation in their maquiladora plants. The NAO found that since severance payments to affected workers is permitted under Mexican law, such payments to those discharged workers demonstrated sufficient compliance with obligations assumed under the labor side accord. The NAO skirted the issue of whether such severance pay is a mechanism widely used by employers to bar trade union organizing, without enforcement of organizing rights by the government. 88
V. THE NAALC AND HEMISPHERIC INTEGRATION

The mix of unilateral and multilateral features in the North American Agreement on Labor Cooperation reviewed here poses challenging issues for hemispheric integration under the NAFTA paradigm in both the short and long term. It is premature to view the NAALC as a sufficient replacement for the GSP and other unilateral labor rights formulations in U.S. law, even with its more multilateral characteristics. The effectiveness of the NAALC in improving working conditions and living standards in each country and promoting the defined "labor principles"--its stated objective--is still being tested. If it turns out to be a weak instrument with no influence on government or employer labor policies, it should not then serve as an "escape" for other countries in the hemisphere to avoid labor rights scrutiny under other U.S. trade statutes. The NAALC, as it is now written, will need a few years' experience before analysts can determine its effectiveness. Meanwhile, any number of developments could lead to a re-opening of negotiations and a re-fashioning of the labor side accord, both in form and in substance. The first potential development involves the impending accession of Chile to the NAFTA. 9 A threshold question is whether Chile, or any new NAFTA partner, will accede to the NAALC by virtue of accession to NAFTA. The NAALC is not integral to the NAFTA. It is a separate instrument that does not contain an accession mechanism. Technically, a country could join the NAFIA alone, without taking on obligations under the side agreements. Mexico, Canada, and the United States must first decide whether they will insist that any new entrant sign the side agreements as

88. For extended discussion and analysis, see Compa, supra note 68. 89. NAALC, supra note 1, at art. 1(a)-(b). 90. See David E. Sanger, Chile Is Admitted as North American Free Trade Partner,N.Y. TIMES, Dec. 12, 1994, at A8.

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a condition of accession to the NAFTA. Prior to the beginning of Chile's accession negotiations with the three NAFTA partners in the Spring of 1995, all four countries have taken the position that Chile will agree to the side agreements, as now written, with its entry into NAFTA. 91 But Chilean critics question whether NAFFA and the current side agreements will benefit Chile. They point out, for example, that in the important agricultural export sector most of the newly-created jobs are seasonal, part-time, and contracted, rather than providing secure employment. The precariousness of this labor market results in "a lack of compliance with labor laws and the maintenance of substandard conditions."92 For their part, U.S. and Chilean trade unions are calling for bilateral trade negotiations between their two countries with a new agreement on labor rights and labor standards that goes beyond the NAALC's terms. 93 Another issue arises with the potential separation of Quebec from Canada. Whether an independent Quebec would negotiate NAFTA partnership in the context of separation talks with Canada before obtaining sovereignty or, after obtaining sovereignty, undertake accession negotiations like any new aspirant to NAFTA is unclear. The choice is really up to the other NAFTA partners (possibly including Chile or other new entrants that precede Quebec independence) and their willingness to simplify or complicate Quebec's move to separate itself from Canada.94

91. Susan Bourette, Chile Poised to Join NAFTA, GLOBE & MAIL, June 8, 1995, at B9.
92. See SARA LARRAIN ET AL., LA APERTURA DE CHILE: ASPECTOS SOCIALES Y LABORALES 7

(Apr. 1994) (Instituto de Ecologia Politica No. 8, Serie de Documentos Comercio y Medio Ambiente, on file with author). The authors conclude that: During the process of liberalizing and opening up Chile's markets, per capita income has become strongly concentrated, provoking a profound deepening of the levels of poverty and indigence, closings of centers of employment, and rapid growth of a series of alternative, informal and invisible economic activities and the superexploitation of women's labor. There are many examples of foreign investors coming to Chile in the past decade with no interest in social stability or in the development of the internal market, nor in the environmental sustainability of their investment projects. For these reasons, one should be fearful that, in the course of an even greater liberalization and external opening, Chile will undergo an increasing process of excluding a great portion of the population from the benefits of the export-led model of development. Id. at 7.
93. See Gabriel Escobar, Various Lobbies Pose Tough Choices for Chile as It Prepares to Join NAFTA, WASH. POST, Dec. 25, 1994, at A33; CUT--AFL-CIO Joint Statement on Chilean Accession to NAFTA, AFL-CIO Press Release, Dec. 19, 1994 (on file with author).

94. The U.S. Ambassador to Canada reportedly "warned Quebecers recently that an independent Quebec would not find it easy to join Canada's existing international alliances, notably the North American Free Trade Agreement." Charles Trueheart, Quebec SeparatistDrive May Be Losing Steam,
WASH. POST, Feb. 22, 1995, at A15.

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Quebec's provincial parliament ratified NAFTA, insofar as provincial ratification was necessary under Canada's federal system. But it has not ratified the NAALC, nor has Ontario. At least one of these two largest provinces must adopt the NAALC for it to become operative in Cana5 da. 9 Quebec has a strong union movement and high labor standards, and might insist on a strengthened labor side agreement to protect its workers from competition based on unfair labor practices in other NAFTA partners. Another issue that implicates both the NAALC and the unilateral U.S. labor rights regime under GSP and other preferential trade programs involves "CBI parity." Under legislation now pending in Congress, countries covered by the Caribbean Basin Economic Recovery Act' would obtain "parity" with NAFTA tariff schedules to end what those countries now see as an unfair advantage for Mexico in exporting to the United States.97 However, those countries are not proposing that they take on labor rights obligations under the side 'agreement. The result of such an arrangement would be doubly disadvantageous for workers. With NAFTA's reduced and eliminated tariffs now available to Caribbean countries, the need for preferential treatment under the GSP and other programs would disappear. This would obviate whatever leverage can be brought to improve worker rights and working conditions under the unilateral labor rights provisions of those programs." At the same time, they would be spared the obligations and mechanisms for scrutiny of labor practices and policies created by the NAALC. U.S. trade unionists have protested these proposals, and the Clinton administration has indicated that it is unwilling to support CBI parity without provision for labor and environmental standards.' While the four countries now engaged in NAFTA accession negotiations are likely to proceed to agreement on the NAALC as it is now written, over the longer term the NAALC's adoption in talks with other countries may not proceed so smoothly. Members of the Mercosur

95. See Ian Robinson, The NAFTA Labour Accord in Canada: Experience, Prospects, and Alternatives, 10 CONN. J. INT'L L. 475 (1995). 96. 19 U.S.C.A. 2702-2706 (West 1990). 97. See Richard Lawrence, Plan to Extend NAFTA-Like Benefits To Caribbean Backed in Congress, J. CoM., Feb. 13, 1995, at 3A. 98. See supra notes 47-51 and accompanying text. 99. See Lawrence, supra note 97.

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(Southern Market) commercial alliance in South America" are liberalizing their trade arrangements, and may well include their own charter of labor rights and standards influenced by the powerful labor movements of Brazil and Argentina. The Mercosur negotiators have created a "Subgroup 11" on matters of labor relations, employment and social security. The Subgroup has eight working groups dealing with the following items: 1) individual employment relations; 2) collective employment relations; 3) employment and migrant labor; 4) occupational training; 5) workplace health and safety; 6) social security; 7) labor costs in land and water transportation; and 8) ILO Conventions.' What if the Mercosur nations adopt a set of common basic labor norms, more akin to the European Union model than the NAALC's mix of multilateral forms and sovereignty-preserving substance? When they seek to negotiate accession to NAFTA as a bloc (the scenario envisioned by trade strategists in North and South America),' 2 would the NAFTA partners insist that the Mercosur countries leave behind the work of Subgroup 11 and require them to sign on to the NAALC as it is presently written? Alternatively, differences between a Mercosur social charter and the NAALC could trigger negotiations on a new labor side agreement in an expanded "AFTA" (American Free Trade Agreement). A number of practical issues related to the labor side agreement are also presented by the imminent accession of Chile and other new entrants to NAFTA. With just three parties, it is easy to allocate "slots" on a three-person Evaluation Committee of Experts, or a five-member Arbitral Panel, so that each party is represented. That is what the current NAALC does. With four, or ten, or thirty members of a hemispheric trade regime, it becomes impossible to be all-inclusive on all the oversight bodies. Another problem arises with the requirement for a two-thirds vote to establish an Arbitral Panel to consider sanctions.0 3 This is a critical point, since an Arbitral Panel is the mechanism created for possible application of trade sanctions, the most powerful enforcement tool in the NAALC. As new countries accede to the labor side accord, will a two-

100. MERCOSUR members include Argentina, Brazil, Uruguay and Paraguay. 101. See Luis Aparicio Valdez, Reflexiones sobre la Integraci6n en America y el Derecho del Trabajo, ANALISIS LABoRAL (Jan. 1995) (paper prepared for presentation to III American Regional Congress of Labour Law and Social Security, Montreal, Quebec, May 24-27, 1995) (on file with author). 102. See James Brooke, In Latin America, a Free Trade Rush, N.Y. TIMES, June 13, 1994, at DI. 103. See NAALC, supra note 1, at art. 29(1).

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thirds ratio still apply for a Panel to be set up? Or is the rule one of unanimity except for the charged party? How will this apply when there are four parties, or five, or thirty? The NAALC creates a Labor Secretariat with a Director and fifteen staff members, five from each country. Does each new entrant get five new positions on the Labor Secretariat? Or will the allocation become diluted so that, for example, the fifteen-person Secretariat staff specified in the NAALC would now be comprised of three employees each from Mexico, Canada, the United States, Chile, and Quebec? And after that? There is a prior practical problem for Chile or other NAFTA aspirants. "Fast-track" trade negotiating authority expired December 31, 1994, and must be granted anew by Congress for the Administration to be able to engage in negotiations on Chile's entry into NAFTA. In essence, "fast track" is a delegation to the President under Congress's constitutional power to regulate foreign commerce. Under fast track, the Executive negotiates the best trade deal it thinks can be had with foreign governments, whether in bilateral, regional or global trade talks. Whatever agreement is tentatively reached by the President is submitted to Congress for a single up-or-down vote without amendments. In principle, this lets the President work out a deal in the national interest that cannot be undone by specific local or sectoral interests with a lobbying edge in Congress. But in making the grant of fast track negotiating authority, Congress may lay down conditions for the scope of negotiations. It is here that earlier congresses instructed the president to take worker rights and environmental protection into consideration in fashioning trade agreements. The new Republican majority in Congress has declared that its support for renewed "fast-track" trade negotiating authority will be conditioned on 4 a renunciation of environmental and labor standards in trade bills.'1 Negotiators will have to confront several such practical, structural issues that make some measure of re-negotiation of the NAALC unavoidable when new parties seek accession to the NAFTA. If the labor side agreement is opened for adjustment to form, it is likely that proposals for substantive changes will also be raised. Just over the horizon, too, is the issue of trans-Atlantic free trade agreements with the European Union. 5 This could bring an effort to reconcile terms of a social charter in a new free trade arrangement, especially with the EU confronting eco104. See Letter from Newt Gingrich to President Clinton, cited in James Brooke, U.S. and 33 Hemisphere Nations Agree to Create Free-Trade Zone, N.Y. TIMES, Dec. 11, 1994, at 1. 105. See, e.g., Nancy Dunne, U.S. Touts Idea of Free Trade Deal with EU, FIN. TIMES, Feb. 9, 1995, at 9; Nathaniel C. Nash, Europe Seeks Latin Free-TradeTies, N.Y. TIMES, Dec. 7, 1994, at D2.

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nomic disparities with Eastern Europe more akin to the U.S.\CanadaMexico divide." Any one of the scenarios just examined could provoke new negotiations on substantive terms of the NAALC: pressure from the U.S. and Chilean labor and human rights movements in connection with Chile's proposed accession, Quebec independence, CBI parity, a Mercosur social charter, free trade talks with Europe, or some other, still unforeseen combination of events. Confronting these issues may well mean that the NAALC, as it is now written, is more a "first draft" of a hemispheric social charter than a firm and final agreement on labor rights and labor standards for the Americas.
AFTERWORD

The single most pressing matter now in the new North American trade and labor rights regime is the crisis that followed the peso devaluation in Mexico. That problem is itself linked to a broader crisis reflected by high-level political assassinations, the Chiapas uprising, and the apparent break-up of the ruling PRI monolith."l It is too recent a series of events to be able to draw firm conclusions as to their meaning, but any discussion of NAFTA and the side accords must take these developments into account. NAFTA and the side accords were negotiated in a period of unbounded optimism about the Latin American economy and the shared blessings of expanded free trade.' 8 In the last two months of 1994, the United States and 120 other nations ratified a new General Agreement on Tariffs and Trade, and both a Summit of the Americas and a Summit of Asia and Pacific nations held out movement toward free trade arrangements as their crowning achievement." Now the collapse of the peso

106. See Craig R. Whitney, West European Companies Head East for Cheap Labor, N.Y. TIMES, Feb. 9, 1995, at D3. 107. See Paul B. Carroll & Dianne Solis, Broken Family, WALL ST. J., Mar. 2, 1995, at Al. 108. See, e.g., Judith H. Bello & Alan F. Holmer, The NAFTA: Its Overarching Implications, 27 INT'L LAW. 589, 594 (Fall 1993) ("Other free trade agreements spurred by, and perhaps based upon, the NAFTA may facilitate the sense of shared responsibility and common destiny that should enable the global community to confront the borderless problems threatening us all"); Martha M. Hamilton, The Latin Boom: Roots of Recovery Began Decades Before This Week's Summit of the Americas, WASH. POST, Dec. 4, 1994, at HI; Nathaniel C. Nash, A New Rush into Latin America, N.Y. TIMES, Apr. 11, 1993, at Fl; Elizabeth Weiner et al., The Latin Revolution Has Ivy League Roots, Bus. WK., June 15, 1992, at 54. 109. See Brooke, supra note 104, at Al; Thomas W. Lippman, Pacific Summit Agrees on Vast Free Market, WASH. POST, Nov. 16, 1994, at Al.

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has shaken that optimism."' The crisis led to intensive negotiations between Mexico and the United States on loan guarantees amounting to twenty billion dollars to prevent a total collapse of the economy and pullout of foreign investors. The agreement that followed contains a number of conditions that effectively integrate the two countries' economies much more than NAFTA itself. The United States effectively dictated Mexican fiscal policy, requiring agreement on a budget surplus for 1995 and a clamp down on credit, with short-term interest rates rising to almost fifty percent. Most dramatically, Mexican oil revenues will flow to U.S. banks before being remitted to Mexico to ensure that loans are repaid."' The experience has left citizens in both countries questioning the value of the Free Trade Agreement and both governments concerned for their political futures. In the United States, NAFTA opponents found ammunition in the peso crisis to call for strengthened labor rights enforcement mechanisms and adjustment assistance programs," 2 if not for outright repeal of the NAFTA." 3 President Clinton came under severe criticism for his administration's handling of the crisis." 4 In Mexico, critics bemoan the loss of sovereignty that accompanies the stringent loan conditions." 5 President Zedillo's hold on his office is questioned." 6 The currency crisis has also called into question the "win-win" arguments of the Clinton administration and other NAFTA champions. With the peso at almost half its pre-crash value, U.S. exports to Mexico-supposedly the source of broad new job creation in the United States-are suddenly prohibitively expensive. At the same time, Mexican exports to the United States are at windfall bargain prices. One report concludes that "[a]s Mexico suffers a slump expected to turn last year's American trade surplus with Mexico into a large deficit, the United States economy is likely to suffer job losses of tens, perhaps hundreds, of thousands.""' 7 On a less dramatic scale the Canadian dollar has also fallen in

110. See Under the Volcano, ECONOMIST, Jan. 7, 1995, at 14. 111. See David E. Sanger, Peso Rescue Sets New Limits on Mexico, N.Y. TIMES, Feb. 22, 1995, at Al. 112. See Sarah Anderson & John Cavanagh, NAFTA's Unhappy Anniversary, N.Y. TIMES, Feb. 7, 1995, at A2. 113. See David E. Sanger, Reopening Old Battles, N.Y. TIMEs, Jan. 20, 1995, at A5. 114. See Keith Bradsher, Crisis in Mexico: Washington; Political Perils Showing in Free Trade Accord, N.Y. TIMES, Dec. 23, 1994, at D4. 115. See Anthony DePalma, Sense of Dollar Duress; With Deep Pain Ahead, Many Mexicans Accuse President of Yielding Sovereignty, N.Y. Times, Feb. 22, 1995, at AI. 116. See The Egg on Zedillo's Face, ECONOMIST, Jan. 7, 1995, at 31. 117. Allen R. Myerson, Strategies on Mexico Cast Aside, N.Y. TIMES, Feb. 14, 1995, at D1.

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value," 8 likewise hurting U.S. exports to Canada while helping Canadian exports to the United States.119 If the trend locks in, and the United States runs continued enormous trade deficits with both its NAFTA partners, a political backlash calling into question the continued existence of the trade agreement as it now stands is inevitable.

118. TIMES, 119. TiMEs,

See Clyde H. Farnsworth, Currency Markets; Canada's Pale Version of Peso Crisis, N.Y. Jan. 24, 1995, at DI. See Clyde H. Farnsworth, In Canada, Doubts Fade Quickly About Free Trade Accord, N.Y. Feb. 12, 1995, at F4.

NAALC IN THE EYES OF THE BEHOLDER

by Dr. David M. Helfeld*
I. INTRODUCTION

My assignment is to comment on the five papers presented on the Labor Side Agreement.1 Part II of this essay focuses on the North American Agreement on Labor Cooperation (NAALC),2 as presented and analyzed by the five participants. Attention is also paid to the panelists' coverage of such broader themes as the relationship between the North American Free Trade Agreement (NAFTA),3 and NAALC, to past and future free trade developments, and to the linkage between promoting free trade areas and fostering worker rights and standards, but only where necessary to the evaluation of NAALC itself and to its possible future development. After commenting on the positions of the five participants, I offer my views on NAALC. In Part III, I argue that there is a serious need for a fully developed public evidentiary record to permit meaningful evaluation of the progress and effectiveness of NAALC and I include the most egregious omissions in what should be a fully developed public record. In Part IV, I offer my views on the shortcomings of the NAALC agreement and the likelihood that they will be remedied.
* Professor (Ret.) and Lecturer, University of Puerto Rico School of Law. 1. Lance A. Compa, Going Multilateral: The Evolution of U.S. Hemispheric Labor Rights Policy Under GSP and NAFTA, 10 CONN. J. INT'L L. 337 (1995); Manuel Fuentes Mufiiz, The Free Trade Agreement in Mexico and Its Repercussions for Workers, 10 CONN. J. INT'L L. 379 (1995); Betty Southard Murphy, NAFTA's North American Agreement on Labor Cooperation: the Present and the Future, 10 CONN. J. INT'L L. 403 (1995); Jorge F. Perez-Lopez, The Promotion of International Labor Standards and NAFTA: Retrospect and Prospects, 10 CONN. J. INT'L L. 427 (1995); Ian Robinson, The NAFTA Labour Accord in Canada:Experience, Prospects, and Alternatives, 10 CONN. J. INT'L L. 475 (1995). 2. North American Agreement on Labor Cooperation, opened for signature Sept. 8, 1993, U.S.Mex.-Can., 32 I.L.M. 1499 (entered into force Jan. 1, 1994) [hereinafter NAALC]. 3. North American Free Trade Agreement, Dec. 17, 1992, 32 I.L.M. 296, 605 (hereinafter NAFTAI.