Labor Standards, Sovereignty and Trade Deals

By April 19, 2007Trade

Important developments on trade here today as NAM President John Engler expressed the willingness of manufacturers to consider adding labor standards to trade agreements, but stating the NAM’s firm opposition to surrendering U.S. legal authority to the control of the United Nations’ International Labor Organization (ILO). In a letter to Rep. Charles Rangel (D-NY), chairman of the House Ways and Means Committee, Engler outlined the rationale for a new openness to labor standards — and this is a notable policy shift — while making it clear that full adoption of ILO standards would mark an unacceptable abdication of U.S. control over its own laws.

With an agreement that can be broadly endorsed, including by the business community, the long-held desire to include foreign labor standards in trade agreements is within reach. However, we believe that this possibility will be at serious risk if, as part of the deal, the United States would be required to adhere to ILO standards as well.

Many of our labor laws, though of very high quality, do not follow ILO standards. Trade agreements that applied an ILO standard to U.S. labor laws would allow trading partners to challenge our laws through bilateral dispute settlement proceedings. We believe that our nation’s labor laws must not be put at risk as efforts are made to improve our trade opportunities through additional free trade agreements. The Tripartite Committee representing U.S. government, labor and business that has been reviewing the core ILO conventions over the past 20 years has consistently shared this concern regarding the protection of American labor laws.

Thing is, full-scale adoption of ILO standards could supersede state policy choices like right-to-work laws or a prohibition on public employees from striking. Sure, organized labor would like to use the monolithic, bureaucratic ILO to overturn these sorts of laws, but abandoning state and federal sovereignty to achieve that goal is just not acceptable.

Media coverage (like this Reuters story) will highlight the conflict between labor and business, which is a reasonable take on developments. But at the same time, we’d hope news accounts would acknowledge the NAM’s realism, our recognition of the congressional majority’s desire to tie labor standards to trade agreements. There’s a willingness to work here. We hope others share it.