CRS Says U.S.-Peru FTA Has Stronger Dispute Settlement than Earlier FTAs
The Congressional Research Service has issued a report (RS22752), providing an overview of dispute settlement under the U.S.-Peru Trade Promotion Agreement (PTPA).
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In May 2007, Congress and the Bush Administration agreed to subject free trade agreements' (FTAs) labor and environmental obligations to the same general dispute settlement provisions, enforcement mechanisms, and remedies for non-compliance as the agreement’s commercial obligations. This approach to labor and environmental disputes is also found in U.S. free trade agreements with Colombia, Korea, and Panama, which await Congressional approval.
According to the report, the PTPA State-State dispute settlement mechanism, for disputes between Parties to the PTPA, differs from earlier U.S. FTAs. Instead of only applying to domestic labor and environmental obligations as in earlier FTAs, the PTPA also applies to the labor obligations stated in the 1998 International Labor Organization (ILO) Declaration on Fundamental Principles and Rights at Work and to obligations under multilateral environmental agreements (MEAs). Additionally, in the event a Party is found to be in breach of one of these obligations and has not complied in the dispute, the prevailing Party may impose trade sanctions instead of, as under earlier agreements, being limited to requesting that a fine be imposed on the non-complying Party. CRS notes that there have not yet been any disputes brought under the PTPA dispute settlement mechanism.
(See ITT's Online Archives or 12/17/07 news, 07121715, for BP summary of President Bush signing the PTPA into law.)