USA: White House, Democrats reach deal on FTAs

published 18 June 2007 updated 18 June 2007

The Bush administration and senior Democratic lawmakers have agreed to a deal to include environmental and labour protections in any new bilateral free trade agreements (FTAs) the country signs.

The agreement requires Washington to ensure its FTAs include the enforcement of some International Labour Organization (ILO) standards as well as several multilateral environmental agreements (MEAs). It will also change intellectual property rights rules in FTAs with the goal of making it easier for developing countries to expand access to generic copies of patented drugs.

U.S. Trade Representative Susan Schwab said that the Bush administration and Congress had "seized an historic opportunity to restore the bipartisan consensus on trade". She added that "the new trade policy template also opens the way for bipartisan work on trade promotion authority (TPA)".

The White House’s TPA mandate means it can "fast-track" trade legislation through Congress, allowing votes only for or against a trade agreement without the possibility of amendment. The Bush administrations fast-track authority expires at the end of June, making it difficult for the U.S. to finalize a WTO agreement.

Under the bipartisan agreement, FTAs must require countries to respect and enforce worker protections set out in the ILO’s 1998 Declaration of Fundamental Principles and Rights at Work, including freedom of association, the right to organize, and prohibitions on child labour. Countries will also have to implement seven MEAs, including the Montreal Protocol on Ozone Depleting Substances, the Convention on International Trade in Endangered Species (CITES), the Convention on Marine Pollution, and the Ramsar Convention on Wetlands.

Both the labour and environmental obligations would become subject to the same dispute settlement procedures as other measures in the agreements.

Some critics of the deal, however, say the environmental and labour provisions are limited because they only become subject to dispute settlement if it can be demonstrated that they “affect” trade and investment. This appears to have calmed fears among some Republicans that protections for workers in FTAs would be used to force changes in domestic labour legislation.