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U.S. Will File Labor Complaint Against Guatemala

July 30 (Bloomberg) -- The U.S. filed a complaint against Guatemala today over its lack of labor protections, using provisions in a regional free-trade agreement, U.S. Trade Representative Ron Kirk said.

It’s the first time the U.S. invoked a trade accord to challenge another country’s labor practices, and follows a rise in violence against union organizers in the Central American nation, Kirk said in a speech in Pennsylvania.

“With this case, we are sending a strong message that our trading partners must protect their own workers,” Kirk said. “The Obama administration will not tolerate labor violations that place U.S. workers at a disadvantage.”

Guatemala was part of the U.S.-Central American Free Trade Agreement approved by Congress in 2005. U.S. trade with Guatemala was $7 billion last year, up from $6 billion in 2005, before the agreement took effect, according to Commerce Department data.

The Guatemalan government has yet to be receive formal notification of the complaint, Luz de Maria Morales, director of international relations for Guatemala’s labor ministry, said by telephone from the capital, Guatemala City.

Filing a petition under the trade-agreement provisions begins at least 30 days of consultations between the countries before the dispute is referred to a separate panel. If the U.S. wins a ruling, Guatemala may be required to pay as much as $15 million into a fund that would be used for labor-protection efforts in the country.

AFL-CIO Petition

In April 2008, the AFL-CIO labor federation and six Guatemalan unions petitioned the U.S. to protest what they said was the Guatemalan government’s failure to enforce its own labor law. Since then, the U.S. said it found that the Ministry of Labor failed to investigate alleged violations and courts didn’t enforce orders in cases involving labor-law violations.

“The United States also has grave concerns about the problem of labor-related violence in Guatemala, which is serious and apparently deteriorating,” the trade office said in a statement. Such abuse “tilts the playing field away from American workers and businesses.”

Sander Levin, chairman of the House Ways and Means Committee, praised the action.

“This decision reflects the administration’s commitment to worker rights, trade enforcement and spreading the benefits of trade broadly,” Levin said in a statement.

To contact the reporter on this story: Mark Drajem in Washington at mdrajem@bloomberg.net

To contact the editor responsible for this story: Larry Liebert at lliebert@bloomberg.net.

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