- The Washington Times - Tuesday, May 3, 2005

The Central American Free Trade Agreement would allow fines of up to $15 million a year, per violation, for countries that break their own labor laws.

The Bush administration touts the unprecedented clause as evidence that the pact will strengthen protection for workers in Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras and Nicaragua.

“These are not small amounts of money — $15 million is bigger than any of the annual labor budgets of the Central American labor ministries,” said Chris Padilla, an assistant U.S. trade representative and the office’s CAFTA point man.

But organized labor in the CAFTA countries and the United States discount the pact’s labor provisions as inadequate to protect workers. CAFTA would require its signatories to enforce their own labor laws, but does not stipulate what should be included in legal codes.

“CAFTA says to these countries with woefully inadequate laws and practices, just ‘enforce your own laws.’ This is a double standard not accepted in any other area of international trade, including CAFTA itself,” said Rep. Sander Levin, Michigan Democrat. Weak labor standards suppress wages in Central America and the United States, he said.

The fight over labor issues is one of the main obstacles to congressional approval of the Central American Free Trade Agreement. Unions consistently have opposed free-trade pacts — including deals with Australia, Morocco, Chile and Singapore — but now appear to have won new allies in Congress.

Congressmen with strong ties to unions, as well as those representing districts where textiles are manufactured and where sugar is farmed and processed, constitute the core opposition to the pact.

Labor opponents found new ammunition yesterday to bolster their claim that CAFTA does too little to protect workers.

Mr. Levin made public a Labor Department-funded study by the International Labor Rights Fund, a Washington-based nonprofit group. It concluded that Central American labor laws are not sufficient to deter employers from violations, and penalties for violations of the law are weak or nonexistent.

The Labor Department distanced itself from the report, saying the ILRF is “sharply partisan,” its reporting is flawed and the group betrays a “militant anti-CAFTA-DR position.” The agreement is often referred to with “DR” added to its initials to signify the inclusion of the Dominican Republic.

Mr. Levin disagreed. “These reports underscore that these countries do not have the basic legal framework in place to protect the basic rights of working people,”he said. For example, workers are fired if they attempt to organize, he said.

The Bush administration is exasperated by labor-related claims, while the Central American governments acknowledge shortcomings, but say CAFTA will help them improve working conditions.

“The unions have frankly no strategy to improve labor rights in Central America,” Mr. Padilla said. “Whereas we have a comprehensive strategy that combines the helping hand of capacity-building with the real teeth of meaningful enforcement provisions backed by fines.”

The fines would go to a specially created fund that would help resolve violations identified in the labor-related complaint.

CAFTA critics contend that because all participating governments violate some labor laws, none will try to invoke the fines.

“We think [the fines] will never be applied … because the governments have to activate this mechanism,” said Gilberto Garcia, vice president of the Center for Labor Studies and Support, a Salvadoran labor-rights group.

The capacity-building includes $20 million from the U.S. federal budget to help the countries better enforce labor and environment laws. The six governments plan to ask for more, either from the United States or other donors, such as the Inter-American Development Bank.

The IDB and six governments last month outlined a strategy to improve worker protections.

“We are determined that this report will not gather dust, but rather will sweep away any remaining doubts about the deep importance that we attach to assuring dignity and respect for fundamental rights in our workplaces,” Norman Garcia, industry and commerce minister for Honduras, said at the time.

It is still not clear which side will prevail in Congress.

U.S. lawmakers can vote yes or no, but cannot amend the pact.

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