Inspection Rather than Deposits for Maquilas

Guatemala is preparing a plan to inspect factories in order to avoid a possible arbitration, forced by the US, for non-compliance of labor standards under CAFTA.

Tuesday, April 17, 2012

The Labour Ministry is preparing a program to inspect working conditions in the textile factories which could take six months to complete. The plan must conform to the standards set by enterprises under the 29-89 scheme (Law on Promotion of Export Activity and Maquilas).

The records of the Ministry of Economy (Mineco) list about 1,200 companies registered under the scheme, but reported only 884 as being active, informed elPeriodico.com.

The initiative seeks to convince the U.S. to desist from taking Guatemala to an arbitration panel in an action brought by the American Federation of Labor - Congress of Industrial Organizations (AFL-CIO,) and 6 Guatemalan trade union organizations under Chapter 16 of the Free Trade Agreement of the U.S., Central America and the Dominican Republic (DR-CAFTA).

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More on this topic

Guatemala to Reform 'Textile Factory Development Act'

June 2011

The government has made a committment to the E.U. to submit a reform bill and its regulations within 60 days, so as not to adversely affect the labor market.

The U.S. has complained since 2010 that the Guatemalan government has not ensured acceptable working conditions and rights of association for its workers.

U.S. Denounces Labor Conditions in Guatemala

May 2011

The U.S. government believes that Guatemala has not taken sufficient measures to resolve problems with labour conditions.

In 2010 the U.S. censured the Guatemalan government for not ensuring acceptable work conditions nor rights of association for its workers.

According to an article in cnn review.com.gt, Ron Kirk, a representative of U.S.

Guatemala Agrees to Compliance with Labor Laws

April 2013

The U.S. is withdrawing from suing the Guatemalan State for breach of labor rules before an international tribunal provided by the DR-CAFTA.

"In order to prevent the creation of an international panel that could lead to Guatemala paying a penalty of up to $15 million for violating labor laws, the Government has agreed with the United States to abide by a commitment to a plan to implement policies respecting these rules ", reported Prensalibre.com.

U.S. Presses Guatemala Over Labor Rights

December 2011

The Office of U.S. Trade Representatives (USTR) has given Guatemala 6 months to meet two commitments on labor issues.

Failure to comply with these provisions, included in the Free Trade Agreement, would mean the matter would proceed to arbitration.

Of the 17 commitments required by the U.S.

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