Pregnancy discrimination in Latin America: the exclusion of "employment discrimination" from the definition of "labor laws" in the Central American Free Trade Agreement.

• Author: Faber, Emily Miyamoto

Regional trading blocs and bilateral trade agreements have become increasingly important within the western hemisphere. The North American Free Trade Agreement (NAFTA), the U.S.-Chile Free Trade Agreement, and the Central America Free Trade Agreement (CAFTA) have all been passed in the last fifteen years. This Article will focus principally on the labor provisions in NAFTA and CAFTA. (1) Additionally, with the Andean Trade Preference Act set to expire in 2006, the United States initiated negotiations with three Andean countries in May 2004: Peru, Colombia, and Ecuador. The United States Trade Representative (USTR) signed the United States-Peru Trade Promotion Agreement in April 2006, concluded negotiations with Colombia in February 2006, and is participating in ongoing discussions with Ecuador. (2) Furthermore, the Administration announced in 2003 that it intends to launch negotiations for a separate agreement with Panama, and the Senate recently approved a resolution of advice and consent for a United States-Uruguay Bilateral Investment Treaty in September 2006. (3) All of these bilateral and regional agreements represent a "building block" (4) in the attempt to secure a Free Trade Area of the Americas despite its current dim prospects. (5)

Free Trade Areas/Agreements (FTAs) are cross-border arrangements in which the trade barriers--both tariff and non-tariff barriers--among participating nations are reduced, sector-by-sector over time, and often eventually abolished. Unlike a customs union or a common market, each member country of the FTA remains free to determine its own external trade barrier against non-FTA members. For businesses operating within the FTA, the market expands because consumers in member states can purchase their products for a lower price than before the FTA was established, and usually also at a lower price than goods originating outside of the member countries. (6) At the same time, businesses are subjected to increased competition.

While labor rights provisions are now standard in American FTAs, (7) their incorporation has not been without controversy. The movement to incorporate labor rights into FTAs is driven by a number of interests, including labor interests in the United States, international labor rights movements, and human rights activism. The incorporation of labor rights in FTAs, however, is often resisted on two main grounds: (1) as an attempt to lower the less-developed countries' comparative advantage of lower wages, and/or (2) as an infringement on the less-developed countries' sovereignty. (8)

The integration of trade and labor has been incremental. For example, the original NAFTA agreement did not include labor protections; instead, the labor agreement was negotiated separately from, and subsequent to, the passage of NAFTA. (9) More recently, CAFTA explicitly incorporated labor rights into the core text, indicating acceptance of the idea that labor rights and trade should be addressed simultaneously. When one compares the two labor agreements, however, the North American Agreement on Labor Cooperation (NAALC) used an eleven-part definition of "labor laws" that included "elimination of employment discrimination ...," (10) while CAFTA reduced the definition to five labor rights, and excluded "employment discrimination" from its definition of labor law. (11)

In relation to labor protections, pregnancy discrimination is an issue of growing importance in U.S.-Latin America FTAs. Pregnancy discrimination is considered a form of sex discrimination, as it is based on a condition unique to women. (12) This issue first emerged in the NAFTA context following the publication of a 1996 Human Rights Watch report that exposed pervasive pregnancy discrimination in maquiladoras in Mexico. (13) In 2004, Human Rights Watch released a report confirming that pregnancy-based discrimination was pervasive in the Dominican Republic's free trade zone. (14) Women in both of these countries were, and continue to be, routinely required to undergo pregnancy tests or answer intrusive questions regarding their possible pregnant status as a condition of being hired or maintaining employment. (15)

The growth of women in the workforce, particularly in the maquiladora-type industries that are so common in Mexico, the Dominican Republic, and Central America, makes this issue especially salient for U.S.-Latin America FTAs. This Article considers the exclusion of "employment discrimination" from the definition of "labor laws" in the Central America Free Trade Agreement and proposes measures that seek to adequately protect women from pregnancy discrimination. First, this Article provides background on pregnancy discrimination. Part I focuses on NAFTA, both its formation and the ensuing pregnancy discrimination in Mexican maquiladoras. To situate this issue in the broader context, Part II focuses on the current treatment of labor discrimination by examining the International Labour Organization (ILO), as well as pregnancy discrimination protection in the United States and non-U.S, trade blocs. This Part demonstrates that such protection against pregnancy discrimination, both pre- and post-hire, is in line with both U.S. and foreign public policy. Part III focuses on the inclusion of labor rights in U.S. free trade agreements.

The argument section begins in Part IV with a discussion of the prevailing labor conditions and labor laws in Central American countries and the Dominican Republic. It then focuses on the definition of "labor laws" under CAFTA and the effect of excluding "employment discrimination" from the definition. It argues that the exclusion of "employment discrimination" from CAFTA's definition of "labor laws" was not the result of legislative ignorance. The Executive and Legislative branches were aware of the inadequate protections for labor, as well as pervasive gender and, more specifically, pregnancy discrimination in the Dominican Republic and Central America. After exploring potential explanations, this Article advances a variation on the traditional economic theory that less-developed countries seek to attract foreign direct investment (FDI) by lowering their labor standards. As a result of the restrictive definition of "labor laws," countries are effectively exempted from enforcing any of their own antidiscrimination legislation, as sanctions cannot be imposed for failure to do so. (16) Arguably, this omission was done in large part to acknowledge labor rights without requiring antidiscrimination action by the governments and businesses seeking to benefit from CAFTA. This argument should be considered in the context of the shifting of FDI traditionally invested in Latin American maquiladora-type industries to China and other Asian countries. Part IV demonstrates that Congress was aware of this omission at the time of CAFTA's passage.

Finally, Part V discusses hypotheses as to why Congress excluded "employment discrimination." The Article concludes with suggestions of remedial measures, offering three main suggestions. First, by defining "labor laws" according to the ILO's Core Labor Standards, free trade agreements would automatically include "employment discrimination" under "labor laws." Second, a provision specifically addressing the prohibition of pre-hire and post-hire pregnancy discrimination, along with an enforcement mechanism, would further discourage this practice. Third, in order to maintain their public image, corporate actors should be encouraged to act responsibly and not perpetuate these practices. None of these solutions are mutually-exclusive; in conjunction, they would strive to provide adequate protection against pregnancy-based discrimination. Given women's increasing role in the workplace, it is imperative to take steps to adequately protect them from pregnancy discrimination. Trade agreements provide a key mechanism by which to improve labor rights and provide basic standards for the workplace.

1. NORTH AMERICAN FREE TRADE AGREEMENT

   1. Formation

      The North American Free Trade Agreement (NAFTA), an agreement among the United States, Mexico, and Canada, went into effect on January 1, 1994. (17) Labor was not addressed in the core document; instead, labor provisions were addressed in a side agreement after NAFTA's effect on domestic (un)employment became a salient issue in the 1992 presidential race. (18) That side agreement, the NAALC, was signed in 1993. (19) In general, the NAALC strives to eliminate employment discrimination by "promot[ing] compliance with and effective enforcement by each Party of its domestic labor laws." (20) While the agreement purports to address the needs and desires of each country, it primarily was drafted "to satisfy concerns about the Mexican government's failure to enforce its labor laws and to protect workers' rights." (21)

      The NAALC sets forth eleven guiding labor principles which Mexico, the United States, and Canada commit themselves "to promote, subject to each Party's domestic law." (22) These eleven principles specifically include the elimination of employment discrimination. (23) The NAALC explicitly provides that the non-discrimination principle applies to women, as it supports the elimination of discrimination "on such grounds as race, religion, sex or other grounds." (24) The term "labor laws," under NAFTA, is defined in "subject matter terms equivalent to these eleven principles." (25)

      The NAALC requires the three signatory governments to comply with and enforce their own labor law through governmental action, and ensure that persons with a "legally recognized interest ... have appropriate access to administrative, quasi-judicial, judicial, or labor tribunals for the enforcement of the Party's labor law." (26) In addition, the NAALC established a new forum for transnational justice, the Commission for Labor Cooperation, (27) and, most importantly, required each of the three signatory countries to establish a...