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Free trade gives way to labor protectionists

At a press roundtable today, Deputy U.S. Trade Representative John Veroneau said that the U.S. would be renegotiating three completed Latin American free trade agreements to add more labor provisions before submitting them to Congress.

The FTAs with Peru, Colombia, and Panama already include extensive labor and environmental provisions that were mandated by the Trade Promotion Authority Act of 2002. However, Democratic leaders — flush with their Congressional victories in late November — had written the USTR saying that more stringent labor provisions needed to be included in trade pacts before they would consider approving them.

Here's an earlier post by me commenting on that threat:

What's ironic is that the Colombian FTA includes in the body of the text a complete chapter on labor that includes 11 pages of provisions upholding the principles of the International Labor Organization, providing access for tribunals to ensure enforcement of labor laws, setting up a labor affairs council, and providing funding for “labor capacity building” projects.

Veroneau also said in his Q & A: “TPA provided a template for labor and environmental provisions. Now we need to find a new template.”

The “new template” is likely to be written by U.S. labor unions that have campaigned non-stop against more open trade — and now have some receptive ears in Congress. Unfortunately, developing countries that stand to gain from trade may find that more U.S.-style environmental and labor mandates may undermine those potential gains. (See again why those linkages aren't a good idea.)