“Strengthening the DR-CAFTA Labor and Capacity Building Commitments”

 

Statement by William J. Jefferson

House Ways and Means Committee

The Dominican Republic-Central America-United States Free Trade Agreement Implementation Act

 

June 15, 2005

 

Thank you.  I would like to thank Chairman Thomas for working with me to include in the Mark a reporting mechanism that will strengthen the labor commitments outlined and envisioned by the DR-CAFTA Agreement.  It is my hope that this provision will address concerns that have been expressed regarding some of the labor and labor capacity building provisions. 

 

Through this debate we have heard many critics say that the CAFTA Agreement is a “step-back” from the unilateral preference programs because the FTA will take away the leverage we have to encourage countries to improve their labor laws.  In this vein, programs like CBI or GSP are a “tool”.  Here, I propose that we replace one tool, with another, effective policy tool. 

 

Given that the DR-CAFTA Agreement includes state-of-the-art labor provisions and innovative trade and labor capacity building provisions;  and given the bold commitments of the DR-CAFTA countries to a roadmap of recommendations designed to “improve worker’s rights, enhance capacity and promote a broader culture of compliance with labor standards, i.e. the White Paper,” the inclusion of a 15-year, bi-annual  reporting requirement will enable Congress to monitor both the commitments of the USG and the commitments of the DR-CAFTA countries regarding these provisions.

 

Combined with the CAFTA’s enforceable and non-enforceable labor and labor capacity building measures, this reporting mechanism is designed to give Congress leverage to address issues related to commitments on funding; incentives for DR-CAFTA countries to improve their labor laws; and benchmarks for evaluating progress regarding the “White Paper” labor recommendations.

 

• First, this provision will help ensure the U.S. commitment to Labor and Trade Capacity funds and technical assistance;  For the duration of the DR-CAFTA report, we can expect that the Administration will continue to fund the trade and labor capacity building provisions so they will have progress to report every other year.    
• Second, this provision will ensure the U.S. commitment to the continued promotion of improvements in labor laws and standards in DR-CAFTA countries.  As the FTA will replace the bilateral trade preference programs, the DR-CAFTA reporting requirement will act as an “action-forcing event” that will encourage the U.S. government to facilitate, discuss and report on improvements in labor laws and standards in DR-CAFTA countries.  Like the Special 301 Report or the State Department’s Human Rights Report, the pressure on countries not to be reflected poorly will act as an incentive for them to continue to make improvements in labor laws.  And, the US will be able to use competitive pressure among the DR-CAFTA countries to encourage continued improvements.
• Third, this reporting provision will provide incentives for DR-CAFTA countries to continue to “take steps” to afford workers internationally-recognized worker rights through capacity building efforts and full implementation of the “White Paper” recommendations;  Not enough has been said about the significance of the DR-CAFTA countries and their commitment to the IDB “White Paper” recommendations.  It is significant both because it represents not only a commitment to the goals of the CAFTA Agreement’s labor provisions, but a commitment to the IDB and the ILO.  The White Paper commitments will be monitored by those organizations, providing independent confirmation of the DR-CAFTA countries’ work to improve labor standards and capacity to enforce labor laws. This reporting provision will ensure that the U.S. will work cooperatively with the DR-CAFTA countries in their efforts to work with international institutions, like the IDB, World Bank and ILO on improving worker rights.  
• Finally, the provision will ensure Congressional review of DR-CAFTA commitments on labor provisions. This will provide Congress a role in ensuring that the CAFTA Agreement’s labor provisions are fulfilled.  

 

Now to specifics.  This provision will require the Administration to report to Congress on the following: 

 

1. Progress made by the CAFTA Agreement’s “Labor Cooperation and Capacity Building Mechanism” and the “Labor Affairs Council” in achieving their stated goals.  This should include identification of the capacity-building projects undertaken, funds received, and summary of results for each country;   
2. DR-CAFTA countries' work with the ILO to implement the “White Paper” and on DR-CAFTA countries' efforts with international organizations through the Labor Cooperation and Capacity Building Mechanism of Art. 16.5 and Annex 16.5 to advance common commitments regarding labor matters;  and will require the Administration to
3. Make recommendations on how the US can facilitate full implementation of the IDB White Paper recommendations. 

 

The Reporting provision also requires the Administration to establish a mechanism to solicit public input and include in the report a summary of public comment on:

 

§         US capacity building efforts called for in the CAFTA Agreement and

§         US efforts to facilitate the full implementation of the White Paper recommendations and

§         DR-CAFTA country efforts to comply with the CAFTA Agreement’s labor provisions and their efforts to fully implement the White Paper recommendations. 

 

This way, NGO’s, Unions, or other interested parties can weigh in on how well the CAFTA is achieving or not achieving its labor-related goals. 

 

Finally,  the provision includes a requirement for periodic meetings of US Labor Secretary with DR-CAFTA Labor Ministers to discuss, among other things,  the operation of the labor provisions of  the Agreement, progress on the “White Paper” commitments, work  of the ILO in the DR-CAFTA countries and other cooperative efforts to afford workers internationally-recognized worker rights.  Summaries of these high-level meetings will be included in the bi-annual Report to Congress.  This meeting will provide a visible opportunity for the US to dialogue with the DR-CAFTA countries on labor issues.  Like any other high-level meeting, the Administration will want to seek “deliverables” to highlight at these meetings, or alternatively, non-governmental groups can use these meetings to raise attention to “problem areas.”

 

While we can all agree that CAFTA is not perfect – no trade agreement ever is – I would like to challenge you to consider how best to generate economic opportunities and promote better lives for the workers of Central America and the Dominican Republic:  by supporting CAFTA-- with certain assurances regarding commitments on all sides regarding capacity building and labor enforcement,  or by voting against it--condemning our neighbors to increased poverty, job loss and other negative economic consequences.  I strongly believe that we can best promote improvements both to working conditions and improved labor standards by supporting the CAFTA, not rejecting it.  For years Democrats have spoken about the need to secure commitments from developing countries on core international labor standards and labor enforcement; we have sought U.S. commitments to substantive and comprehensive labor capacity building programs; and we have sought to ensure a role for the International Labor Organization in these efforts. With this Agreement, we have all of these things.  We should not let this opportunity to help our neighbors in Central America slip away with a simple, “just say no” position.