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The Trade Policy Template: A Summary

The trade policy template addresses the three core flaws that Human Rights Watch has identified in the labor chapters of all free trade agreements negotiated under the 2002 Bipartisan Trade Promotion Authority (TPA).³ First, these recently negotiated free trade agreements only require that countries effectively enforce their own labor laws, no matter how weak and regardless of whether they adequately protect workers’ rights. There is no requirement that those laws uphold fundamental international labor rights. Second, the accords negotiated under TPA fail to protect workers against employment discrimination in law or practice. Countries could, for example, ignore their own laws against racial bias or allow practices such as mandatory pregnancy testing and still be in full compliance with the trade agreements. Finally, there is no “enforcement parity” for workers’ rights and commercial obligations under these trade agreements; the mechanisms for enforcing labor rights provisions are different from and inferior to those available to enforce commercial provisions. For example, the accords cap the fine amounts that can be imposed for labor-rights-related violations and reduce the punitive impact of those fines by channeling them back into, rather than out of, the violating country.

Both the USTR and congressional summaries of the template suggest that there is clear consensus around ensuring enforcement parity for labor and commercial requirements and incorporating provisions to prohibit workplace and employment discrimination in free trade accords. Both summaries state that if countries violate free trade agreements’ labor obligations through a “sustained or recurring course of action or inaction” in a “manner affecting trade or investment between the parties,” they will be subject to the same dispute settlement procedures and remedies

available for enforcing commercial provisions.⁴ Both summaries also agree that countries must be required to enforce their laws governing the “elimination of discrimination in respect of employment and obligation.”⁵ 

The ambiguity arises around the obligations that the template envisions with respect to countries’ national labor laws. The USTR’s summary of the template states that parties shall be required to “adopt and maintain in their [federal] laws and practice” the “five basic internationally-recognized labor principles, as stated in the 1998 ILO Declaration on Fundamental Principles and Rights at Work,” while the congressional leadership’s summary refers to the “five basic internationally-recognized labor standards, as stated in the ILO Declaration.”⁶ Both template summaries also add a clarifying note stating that the obligation “refers only to the 1998 ILO Declaration on Fundamental Principles and Rights at Work.”⁷

Although on its face the use of vague and slightly different terms (like “standards” versus “principles”) may seem inconsequential and the clarifying note relatively benign, both are important. They generate confusion that, if not resolved with an eye to protecting workers’ basic rights, could significantly reduce the positive labor rights impact of the template.