United States Keeps In Place Labor Case Against Guatemala

The United States Trade Representative Michael Froman has announced that the dispute settlement process in the 2011 labor enforcement case brought under the Dominican Republic-Central America-United States Free Trade Agreement (CAFTA-DR) will not be terminated and will remain suspended for an additional four months as the United States seeks further progress by Guatemala on its labor obligations under the CAFTA-DR.

On April 26, 2013, the United States and Guatemala signed an 18-point Enforcement Plan outlining concrete actions to strengthen labor law enforcement in Guatemala. Guatemala still needs to pass legislation providing for an expedited process to sanction employers that violate labor laws and to implement a mechanism to ensure payments to workers in cases where enterprises have closed, among other steps that remain to be taken. In addition, in the next four months, Guatemala will need to demonstrate that the legal reforms it has undertaken and still needs to undertake are being effectively implemented and leading to positive changes on the ground. The U.S. Government retains the right to reactivate the arbitral panel at any point during the next four months.