GUATEMALA: Makers "undisturbed" by US labour complaint
Textile and apparel producers in Guatemala are seeking to reassure retailers, importers and suppliers that US concerns over labour rights violations will not disrupt the industry or its eligibility for duty-free benefits under a central American free trade pact.
The response comes after the US on Friday (30 July) said it had requested consultations with the Guatemalan government over apparent labour rights violations under the Dominican Republic-Central America-United States Free Trade Agreement (DR-CAFTA).
This is the first time the US has requested consultations under the labour chapter of a US free trade agreement.
“While we are confident that there will be a speedy resolution to this dispute...we want you to know that the textile and apparel producers in Guatemala are working to resolve any problems, and that our partnerships and commercial commitments will continue undisturbed,” said Carlos Arias, president of the Guatemala textile and apparel manufacturing association Vestex.
In a letter to customers and suppliers, a copy of which was also sent to just-style, Arias said he was confident “this dispute between our two governments will not disrupt the industry.” He added: “Textile and apparel producers in Guatemala take very seriously our commitment to corporate social responsibility and to maintain the highest levels of compliance in all production facilities.”
The US government criticism focuses on the way the Guatemalan government enforces its labour laws and the resources committed to respond to labour concerns. It is not a reflection of bad labour practices in the Guatemala apparel manufacturing sector, Arias stressed.
“When there have been concerns about practices in the factories, Vestex works...to ensure that there is swift action to resolve any problems. This commitment to compliance remains strong.”
It is also important to note that the CAFTA labour case does not jeopardise the CAFTA duty-free benefits for Guatemala production, he said.
“Even in the worst case that a dispute goes forward, the penalty that would be assessed against Guatemala Government is a monetary one. It will not affect the trade.”
The US move comes as the Obama administration is trying to revive its trade agenda with a view to doubling US exports by 2015.
“We are sending a strong message that the Obama Administration will vigorously enforce labour obligations under US free trade agreements,” said US Secretary of Labor Hilda Solis. “We are committed to ensuring that US businesses and workers compete on a level playing field and that labour rights are respected in our trading partner countries."
By launching labour consultations with Guatemala and formally putting the issue on track for possible dispute settlement, the US government says it hopes to see the problems effectively resolved.
The two parties now embark on 90 days of talks to try to yield a resolution. If this fails and an arbitration panel rules in favour of the US, Guatemala could be subject to penalties of up to $15m a year.
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