Free Trade Agreements (FTAs) between countries facilitate the movement of goods and services by eliminating tariffs, reducing non-tariff barriers, and providing the parties with increased access to financial and service sectors. One important trend for U.S. employers is the U.S. government’s willingness to enter into FTAs that incorporate certain obligations with regard to labor and employment issues. On Oct. 5, 2015, the United States entered into just such an FTA. Among other commonly addressed trade issues, the TPP includes a specific chapter on “Labour” that potentially creates new labor obligations on the state parties.
The Trans-Pacific Partnership (TPP) is a multilateral free trade agreement among 12 countries: Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, United States, and Vietnam. The TPP mandates, among other things, certain fundamental rights for workers in each state, which are articulated under the standards of the International Labor Organization (ILO), a United Nations agency dedicated to promoting decency in labor and work. It requires each party to ensure acceptable conditions of work for its work force. It further creates an extra-judicial complaint mechanism that would allow private entities—such as unions—to complain that a state party is not in compliance because it is allowing employers within that state to violate workers’ rights, which are protected under the TPP.
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