USTR has posted Guatemala's first written submission in the labor complaint the U.S. brought against Guatemala. (Thanks to Ryan Rainey of Inside US Trade for the tip). There are some interesting issues in there. I'll mention a couple.
Role of precedent from other areas of international law:
63. The Panel may also seek guidance from the case law developed in other fora. This may be particularly helpful considering that this is only the second case to be decided under the CAFTA-DR State-to-State dispute settlement mechanism. The case law developed by adjudicatory bodies in other fora, although not binding, may be illustrative. Indeed, the Panel can find guidance in solutions offered in other legal proceedings without disregarding the relevant texts and more generally the applicable law.
64. Relying on prior case law for guidance is common in the majority of the rules-based system of adjudication and the “cross-fertilization” among international adjudicatory bodies is a growing phenomenon. The dispute settlement mechanism under the CAFTA-DR should not be the exception.
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70. In the light of the above, Guatemala invites this Panel to consider the case law of other fora to the extent that it is relevant for legal questions that will arise in the present dispute. While that case law would not have a “binding” character, it may be illustrative and should have persuasive authority.
Which parts of the government are covered:
116. Article 16.2.1(a) reads:
A Party shall not fail to effectively enforce its labor laws, through a sustained or recurring course of action or inaction, in a manner affecting trade between the Parties, after the date of the entry into force of this Agreement.
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128. Therefore, when read together with the definitions provided in Article 16.8, Article 16.2.1(a) must be understood as referring to enforcement of labor laws by the Executive Body. According to Guatemala’s Constitution, the Executive is headed by the President and also includes the VicePresident, Ministers, Vice-Ministers and other dependent officials.94 Consequently, in the particular case of Guatemala, Article 16.2.1(a) covers enforcement of labor laws by the President, Vice-President, Ministers, Vice-Minister and other dependent officials.
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180. The United States’ first claim is that Guatemala has failed to effectively enforce Labor Code Articles 10, 62(c), 209, 223, 379 and 380. The United States’ claim is based exclusively on the following two allegations of inaction: (i) the allegation that Guatemala’s Public Ministry did not pursue a criminal penalty against companies that allegedly failed to reinstate employees or pay benefits owed to them; and (ii) the allegation that Guatemala’s labor courts did not increase penalties against companies that failed to reinstate employees or pay benefits owed to them or refer the matter to the Public Ministry. 114
181. Before proceeding to the factual basis of the United States’ allegation, Guatemala considers that the United States’ claim must be rejected by the Panel as a matter of law. Guatemala explained in Section VI that Article 16.2.1(a) of the CAFTA-DR covers action or inaction by the Executive branch of government only. Action or inaction of entities that do not belong to the Executive branch fall outside of the scope of Article 16.2.1(a). As explained below, the Guatemalan labor courts and the Public Ministry do not belong to the Executive branch and therefore their alleged inaction cannot provide a basis for a violation of Article 16.2.1(a).
Has trade been affected:
461. Furthermore, as explained earlier, the third clause of Article 16.2.1(a), which reads “in a manner affecting trade between the Parties” is linked back to the preceding clauses through the terms “in a manner”. The third clause of Article 16.2.1(a) sets out an additional condition that concerns the intended consequence of the Party’s “course of action or inaction”. The intended consequence is to “affect[] trade between the Parties”. The term “affect” means to “[h]ave an effect on” and was included in present continuous. This, in turn, means that there must be an existing and continuous relationship of cause and effect between the “course of action or inaction” and the alleged trade effects.
462. The United States has not only failed to identify any trade effects, it has also failed to establish that such effects are caused by the alleged failure of Guatemala to effectively enforce its labor laws. The United States’ arguments relating to the third clause of Article 16.2.1(a) are based on unfounded assertions and generalizations.
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471. The fact is that any link between the United States’ allegations and trade between the Parties of CAFTA-DR is negligible at best. As Guatemala underscored earlier, none of the 16 Guatemalan companies targeted in the United States’ complaint exports to the other CAFTA-DR Parties, except one. The exports of this one company to CAFTA-DR Parties in 2014 amounted to less than US$13,000.