I. Provisions on Basic Labor Standards
II. Provisions on Environment and Global Warming
III. Provisions on Patents/IPR and Access to Medicines
IV. Provision on Government Procurement
V. Provision on Port Security
VI. Provision on Investment
VII. Strategic Worker Assistance and Training (SWAT) Initiative
The Korea FTA raises additional major issues that the Administration will have to address. In particular, the problem of Korea’s systemic barriers in the automotive, manufactured, agricultural and services markets will have to be addressed. A Bipartisan Congressional Proposal was provided to the Administration on March 1 to open Korea’s automotive market. The Administration has suggested a proposal that would, like earlier efforts in 1995 and 1998, fail to open the Korean market.
May 10, 2007
Dear Ambassador Schwab:
We have reached an agreement on the terms of the FTA for Peru and Panama, and those same terms must be incorporated into the Colombia FTA.
Colombia has special problems and considerations not presented in the context of the Peru and Panama FTAs, including the systemic, persistent violence against trade unionists and other human rights defenders, the related problem of impunity, and the role of the paramilitaries in perpetuating these crimes. Congress and the Administration must work with the Government of Colombia on these serious problems to determine what additional steps can be taken to allow for consideration of the FTA. Examples include a massive strengthening of the Attorney-General’s Office to prosecute crimes against trade unionists and others, and to prosecute crimes by paramilitaries.
We are working to assess concrete proposals and undoubtedly will visit Colombia for first hand observations, as we explore a timely and effective solution.
Charles B. Rangel, Chairman, Committee on Ways & Means
Sander M. Levin, Chairman, Subcommittee on Trade
I. Provisions on Basic Labor Standards
A. Enforceable Obligation as to ILO Standards
Countries would be required to adopt, maintain and enforce in their own laws and in practice the five basic internationally-recognized labor standards, as stated in the 1998 ILO Declaration:
1. Freedom of association;
2. The effective recognition of the right to collective bargaining;
3. The elimination of all forms of forced or compulsory labor;
4. The effective abolition of child labor and a prohibition on the worst forms of child labor; and
5. The elimination of discrimination in respect of employment and occupation.
The obligations of this agreement, as they relate to the ILO, refer only to the 1998 ILO Declaration on the Fundamental Principles and Rights at Work.
B. Enforcement of Law
A decision a Party makes on the distribution of enforcement resources shall not be a reason for not complying with the provisions of this Chapter. Each Party retains the right to the reasonable exercise of discretion and to bona fide decisions with regard to the allocation of resources between labor enforcement activities among the internationally recognized labor rights, provided the exercise of such discretion and such decisions are not inconsistent with the obligations of this Chapter.
There would be a requirement to show that nonenforcement of law occurred “in a manner affecting trade or investment between the parties” and “through a sustained or recurring course of action or inaction.”
C. Enforceable Non-Derogation Provision
Parties cannot derogate from this obligation in a manner affecting trade or investment.
D. Full Parity in Dispute Settlement
Labor obligations subject to same dispute settlement, same enforcement mechanisms (remedies), and same criteria for selection of enforcement mechanisms (remedies) as all other FTA obligations.
II. Provisions on Environment and Global Warming
A. Enforcement of Multilateral Environmental Agreements
1. The Parties must adopt, implement, and effectively enforce laws, regulations and all other measures to fulfill the Parties’ obligations under each of the following MEAs, to which they are both parties, subject to existing and future reservations to the MEAs:
Convention on International Trade in Endangered Species
Montreal Protocol on Ozone Depleting Substances
Convention on Marine Pollution
Inter-American Tropical Tuna Convention
Ramsar Convention on the Wetlands
International Convention for the Regulation of Whaling
Convention on Conservation of Antarctic Marine Living Resources
The MEAs listed include current and future mutually-agreed protocols, amendments, annexes, or adjustments to the listed MEAs to which the Parties have agreed.
2. The obligation in (1) is subject to the FTA dispute settlement chapter, and there shall be an inconsistency if the failure to uphold the obligation affects trade or investment.
3. The Parties may agree in writing to modify the list in (1) to include any other environmental or conservation agreement to which they are full parties.
4. In the event of any inconsistency between the FTA and the obligations set out in any MEA listed in (1) a Party shall seek to balance obligations under both agreements, but this shall not preclude a Party from taking a particular measure to comply with its MEA obligations, as long as the measure’s primary purpose is not as a disguised restriction on trade. For greater certainty, this is without prejudice to non-covered MEAs.
1. (a) The FTA Parties cannot waive or otherwise derogate from, or offer to waive or otherwise derogate from, their respective environmental laws in a manner that weakens or reduces the protections afforded in those laws in a manner affecting trade or investment.
(b) A Party is in compliance with its obligations under (a) where such waiver or derogation is allowed under its environmental laws and such waiver or derogation is not inconsistent with a covered MEA.
2. Sub-paragraph (b) does not apply to waivers or derogations with respect to Peru’s forest sector laws.
C. Dispute Settlement
1. All FTA environmental obligations will be subject to same dispute settlement, same enforcement mechanisms (remedies), and same criteria for selection of enforcement mechanisms (remedies) as all other FTA obligations.
2. In applying the MEA obligation, dispute settlement panels convened under the FTA shall:
(a) follow (i.e., defer to) all interpretative guidance under the relevant MEA; and
(b) given all interpretative guidance, where an MEA obligation is open to more than one permissible interpretation, and an FTA Party has chosen one of those permissible interpretations, accept that interpretation as being in conformity with the MEA obligation. This specific guidance shall prevail over any other guidance.
3. FTA to establish mechanism for the FTA’s Environmental Affairs Council (EAC) to coordinate interaction with the relevant MEA body on questions arising with respect to MEA obligations. The mechanism will establish procedures for the following:
(a) Where the EAC or an FTA panel considers matters related to adoption, implementation, or effective enforcement of laws, regulations and other measures necessary to fulfill obligations under a covered MEA, the EAC or FTA panel shall consult fully with the relevant MEA body(s).
(b) In such consultations, the EAC or FTA panel shall accept views of the relevant MEA body(s), including whether laws, regulations and other measures by an FTA Party are in accordance with the MEA.
4. FTA Parties shall endeavor to first address issues related to MEA obligations through mechanisms established in the relevant MEA. This shall not preclude an FTA Party from raising any matter related to MEA obligations through the EAC or from raising an alleged inconsistency with the obligation to adopt, implement and effectively enforce laws, regulations and all other measures to fulfill a covered MEA obligation, under the dispute settlement chapter, where recourse to the MEA mechanism could result in unreasonable delay, including
where the MEA mechanism requires consensus.
D. Logging (Peru)
1. USTR to conclude an Annex to the FTA covering forest sector governance and operations in Peru. Annex shall:
(a) Provide for coordination of capacity building activities in Peru under the Environmental Cooperation Agreement (ECA) [this can also be through an MOU];
(b) Provide for cooperation between the respective customs authorities and law enforcement authorities in regard to enforcement of forest sector laws;
(c) (I) Provide for steps strengthening Peru’s forest sector laws, regulations and other measures in the areas of: (I) forestry sector governance; (II) concession management; (III) related trade activities; and (IV) regulation of harvesting, transport and export of CITES listed tree species;
(ii) Provide for a reasonable transition for Peru to implement the listed steps; and
(iii) Ensure that implementation of outlined steps is actionable and fully enforceable under the FTA dispute settlement chapter.
(d) Establish a fully enforceable obligation for Peru to conduct periodic audits of producers/exporters of CITES listed tree species (audits may be conducted by an agreed third party);
(e) Establish a fully enforceable right for the USG to request special audits and for verification procedures by U.S. Customs and the Fish and Wildlife Service for CITES listed tree species (audits may be conducted by an agreed third party);
(f) (i) Provide for restriction on U.S. imports of CITES tree listed species where Peruvian or U.S. verification shows that claim that the CITES listed species was legally harvested is insufficient or the producer/exporter provided incorrect information.
 This obligation is in addition to the existing obligations to effectively enforce environmental laws, as defined in each agreement (see e.g., Peru Art. 18.2).