The panel report is now available. I'll put it on WorldTradeLaw.net soon, but for now you can read it here. This is from the conclusion:
594. The United States has proven that at eight worksites and with respect to 74 workers Guatemala failed to effectively enforce its labor laws by failing to secure compliance with court orders, but not that these instances constitute a course of inaction that was in a manner affecting trade. The United States has not proven sufficient failures to adequately conduct labor inspections to constitute a course of action or inaction. The Panel has no jurisdiction over the other claims advanced by the United States in these proceedings, as they were not included in the panel request. We therefore conclude that the United States has not proven that Guatemala failed to conform to its obligations under Article 16.2.1(a) of the CAFTA-DR.
And here's a key part of the reasoning:
165. One disputing Party contends that a course of action or inaction is “in a manner affecting trade” if it modifies conditions of competition, while the other contends that it is “in a manner affecting trade” only if it causes a change in prices of or trade flows in particular goods or services.
...
190. In sum, we find that a failure to effectively enforce a Party’s labor laws through a sustained or recurring course of action or inaction is “in a manner affecting trade between the Parties” if it confers some competitive advantage on an employer or employers engaged in trade between the Parties. ...
191. We turn now to the question of what must be shown by a complaining Party to establish that such a failure to effectively enforce confers a competitive advantage on a participant or participants in trade between the Parties and thus is in a manner affecting trade.
...
196, ... our enquiry into whether a failure to enforce labor laws is such as to confer a competitive advantage in trade between the CAFTA-DR Parties focused principally on (1) whether the enterprise or enterprises in question export to CAFTA-DR Parties in competitive markets or compete with imports from CAFTA-DR Parties; (2) identifying the effects of a failure to enforce; and (3) whether these effects are sufficient to confer some competitive advantage on such an enterprise or such enterprises.
And here's a sampling how they applied the law to the facts:
505. In sum, the facts as we have found them fail to establish a breach of Article 16.2.1(a), because whichever way they are viewed, one of the prongs of an Article 16.2.1(a) claim has not been met. When Guatemala’s law enforcement failures are looked at collectively, they show (on an arguendo basis) a sustained or recurring course of action or inaction, but not conduct in a manner affecting trade. When the one law enforcement failure that we found to be in a manner affecting trade is looked at by itself, there is no sustained or recurring course of action or inaction. Under these circumstances, given the cumulative nature of the elements of Article 16.2.1(a), we are unable to find that provision to have been breached based on the factual matrix before us.
I'll give it a thorough read at some point, but maybe not right away. In the meantime, there are some important political questions. How will Democrats in Congress and labor groups react, in particular in terms of their demands for upcoming U.S. trade negotiations such as NAFTA? Will they insist on further strengthening the labor provisions of U.S. trade agreements, so as to make them easier to enforce? And if so, will the Trump administration be receptive to their demands?
