The Guatemalan government has agreed to enforce its labour laws - finally resolving a complaint filed in 2008 by the US government under the Dominican Republic-Central America Free Trade Agreement (DR-CAFTA).

The "robust enforcement plan" announced earlier this week is designed to put an end to ongoing concerns over labour rights violations.

The 18-point plan includes concrete actions with specific timeframes that Guatemala will implement within six months to improve labour law enforcement.

The "landmark agreement" will see the Guatemalan government set aside additional resources for labour inspections, and there will be new mechanisms to indicate impending and sudden factory closures and ensure that workers are paid what they are owed when factories close.

There will also be improved monitoring and enforcement of labour court orders and new efforts to ensure export companies comply with labour laws.

This is the first labour case that the US has brought to dispute settlement under a trade agreement.

"Its full and timely implementation over the coming months will yield demonstrable improvements in Guatemalan labour law enforcement that will be a real victory for workers," noted Acting Secretary of Labor, Seth Harris.

US apparel retailers and brands sourcing in Guatemala have long been concerned at the Guatemalan government's failure to enforce its labour laws.

A letter sent a year ago to President Otto Perez Molina by Adidas, American Eagle Outfitters, Gap Inc, Liz Claiborne, Nike, PVH Corp, Under Armour and VF Corporation, urged change to "establish Guatemala's reputation as a country where socially-responsible companies may do business with confidence."