Office of the United States Trade Representative Bipartisan Agreement on Trade Policy May Bipartisan Trade Deal. Labor

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1 Office f the United States Trade Representative Bipartisan Agreement n Trade Plicy May 2007 Trade Facts Bipartisan Trade Deal We have seized an histric pprtunity t restre the bipartisan cnsensus n trade with a clear and reasnable path frward fr cngressinal cnsideratin f Free Trade Agreements with Peru, Clmbia, Panama and Krea. The new trade plicy template als pens the way fr bipartisan wrk n Trade Prmtin Authrity. This will ensure the creatin f new ecnmic pprtunities fr American farmers, ranchers, manufacturers, service prviders, mre chices fr cnsumers, and help guarantee that the benefits f trade extend t all peple. Ambassadr Susan C. Schwab Labr Internatinally-recgnized labr principles incrprated int trade agreements Enfrceable reciprcal bligatin fr the cuntries t adpt and maintain in their laws and practice the five basic internatinally-recgnized labr principles, as stated in the ILO Declaratin n Fundamental Principles and Rights at Wrk. Freedm f assciatin; The effective recgnitin f the right t cllective bargaining; The eliminatin f all frms f frced r cmpulsry labr; The effective ablitin f child labr and a prhibitin n the wrst frms f child labr; and The eliminatin f discriminatin in respect f emplyment and ccupatin. The bligatin refers nly t the ILO Declaratin n Fundamental Principles and Rights at Wrk. A vilatin must ccur in a manner affecting trade r investment between the parties. Enfrceable bligatin t effectively enfrce labr laws; five basic internatinally-recgnized labr principles frm the 1998 Declaratin, plus acceptable cnditins f wrk. Vilatin requires shwing that nn-enfrcement f labr bligatins ccurred thrugh a sustained r recurring curse f actin r inactin A vilatin must ccur in a manner affecting trade r investment between the parties. The agreement des nt change the current definitin f labr laws in ur FTAS and thus applies nly t federal labr laws.

2 2 Only a gvernment can invke dispute settlement against the ther gvernment fr a labr vilatin under an FTA. Labr bligatins subject t the same dispute settlement prcedures and remedies as cmmercial bligatins. Available remedies are fines and trade sanctins, based n amunt f trade injury. As with cmmercial prvisins, panel decisins are nt self-executing. That is, they wuld nt alter U.S. law. United States Cmpliance with the ILO Declaratin The United States recgnizes, and is cmmitted t, the fundamental principle f freedm f assciatin and the effective recgnitin f the right t cllective bargaining. This principle is assured by the First, Fifth, and Furteenth Amendments f the United States Cnstitutin, supplemented by legislatin.... Annual Reprt fr 1999 f the United States f America The principle f the eliminatin f all frms f frced r cmpulsry labr is clearly recgnized in the United States. Annual Reprt fr 1999 f the United States f America The United States recgnizes the principle f the effective ablitin f child labr. Annual Reprt fr 1999 f the United States f America The Gvernment f The United States recgnizes and is cmmitted t the fundamental principle f the eliminatin f discriminatin in respect f emplyment and ccupatin and as it relates t equal remuneratin fr men and wmen wrkers fr equal wrk thrugh existing United States cnstitutinal law. Annual Reprt fr 1999 f the United States f America Envirnment The Administratin and Cngress have agreed t incrprate a specific list f multilateral envirnmental agreements (MEAs) in ur FTAs. The list includes (with abbreviated titles) the Cnventin n Internatinal Trade in Endangered Species (CITES), Mntreal Prtcl n Ozne Depleting Substances, Cnventin n Marine Pllutin, Inter- American Trpical Tuna Cnventin (IATTC), Ramsar Cnventin n Wetlands, Internatinal Whaling Cnventin (IWC), and Cnventin n Cnservatin f Antarctic Marine Living Resurces (CCAMLR). The United States is a signatry t all f these agreements. The United States takes seriusly its bligatins under these MEAs. We have nthing t fear frm taking n FTA cmmitments fr these agreements as well and subjecting thse cmmitments t the FTA dispute settlement prcess where trade r investment are affected. We have als agreed t alter the nn-dergatin bligatin fr envirnmental laws frm a strive t t a shall bligatin, with allwance fr waivers permitted under law as lng as it des nt vilate the MEA. Fr the United States, this bligatin is limited t federal laws and shuld nt affect ur implementatin f these laws. Finally, we have agreed that all f ur FTA envirnmental bligatins will be enfrced n the same basis as the cmmercial prvisins f ur agreements same remedies, prcedures, and sanctins. Previusly, ur

3 3 envirnmental dispute settlement prcedures fcused n the use f fines, as ppsed t trade sanctins, and were limited t the bligatin t effectively enfrce envirnmental laws. In cnnectin with the Peru FTA, we have agreed t wrk with the Gvernment f Peru n cmprehensive steps t address illegal lgging, including f endangered mahgany, and t restrict imprts f prducts that are harvested and traded in vilatin f CITES. Intellectual Prperty The Administratin s agreement with the Cngressinal leadership preserves a strng verall level f prtectin fr intellectual prperty in develping cuntry free trade agreements, including thse mst recently ntified t the Cngress. Within this verall framewrk f strng intellectual prperty prtectin, the agreement reached with the Cngressinal leadership aims t incrprate certain flexibilities. These mdificatins are aimed at further ensuring that develping cuntry free trade agreement partners are able t achieve an apprpriate balance between fstering innvatin in, and prmting access t, life-saving medicines. The results are fully in line with this Administratin s lng-standing trade plicy bjectives in the area f intellectual prperty. In particular, the agreement with the Cngressinal leadership entails the fllwing elements related t intellectual prperty, medicines, and health: Clarificatin that the perid f prtectin fr test data fr pharmaceuticals by develping cuntry FTA partners will generally nt extend beynd the perid that such prtectin is available fr the same prduct in the United States, cupled with a prvisin that will encurage ur partners t prcess marketing apprval applicatins fr innvative drugs in a timely manner. Clarificatin that develping cuntry FTA partners may implement exceptins t nrmal rules fr prtecting test data if necessary t prtect public health. A mre flexible apprach, fr develping cuntry partners, t restring patent terms t cmpensate fr prcessing delays. This flexibility is accmpanied by new prvisins stipulating that trading partners will make best effrts t prcess patent and marketing apprval applicatins expeditiusly. Mre flexibility in terms f the types f prcedures that develping cuntry partners may implement t prevent the marketing f patent-infringing prducts. Integratin within the intellectual prperty chapter f a recgnitin that nthing in the chapter affects the ability f ur FTA partners t take necessary measures t prtect public health by prmting access t medicines fr all, and a statement affirming mutual cmmitment t the 2001 Dha Declaratin n the TRIPS Agreement and Public Health. While the agreement n pending FTAs with develping cuntries incrprates varius flexibilities with respect t pharmaceutical-related IPR prvisins, the intellectual prperty chapters f these agreements cntinue t represent an enhancement f IPR prtectin fr pharmaceutical prducts in thse markets, cmpared t the status qu situatin. In particular, these FTAs: Cntain prvisins prtecting against unfair cmmercial use f test and ther data submitted in cnnectin with prduct apprval. These prvisins, even as mdified by the Administratin- Cngress agreement, prvide assurances that ur develping cuntry FTA partners will satisfy their bligatins under the TRIPS Agreement.

4 4 Investment This preamble prvisin wuld recgnize that freign investrs in the United States will nt be accrded greater substantive rights with respect t investment prtectins than United States investrs in the United States. We have lng recgnized this principle as a principal negtiating bjective f ur FTA negtiatins. In particular, the Trade Act f 2002 describes this bjective as ensuring that freign investrs in the United States are nt accrded greater substantive rights with respect t investment prtectins than United States investrs in the United States. We believe that the fur pending FTAs (as well as the ther FTAs we have cncluded in the past five years) fully achieve this bjective f the Trade Act, in part by including innvatins such as a clarificatin f custmary internatinal law and guidance regarding indirect exprpriatin. Gvernment Prcurement This prvisin wuld clarify that FTA parties may insert requirements in their gvernment cntracts that suppliers must cmply with cre labr laws in the cuntry where the gd is prduced r the service is perfrmed. These may include laws setting ut labr cnditins such as ccupatinal safety and health requirements. Sme state gvernments have sught t ensure that their cntractrs bserve basic labr rights and labr laws, and the prpsed clarificatin makes clear that they can d s. Our FTAs include a similar prvisin clarifying that gvernment agencies can include prvisins in their prcurements t prmte envirnmental prtectin. Prt Security Sme in Cngress have wrried that FTAs may allw freign gvernment-wned cmpanies t perate U.S. prts even where there are legitimate security cncerns. A new FTA prvisin wuld clarify that the agreement s essential security exceptin, which can be invked t verride any FTA bligatin, including n prt services, is nt subject t challenge.

5 5 That means if a freign cmpany s plan t prvide services at a U.S. prt raises natinal security cncerns, we can be sure the FTA will nt stand in the way f any actin U.S. authrities take t address thse cncerns.