Recent news suggests that the Obama administration is once again buckling to the pressure of labor unions, this time by pursuing trade sanctions against Guatemala. Yes, Guatemala. Forget that this is the big guy beating up on the little guy, or the rich guy beating up on the poor guy, Guatemala has signed a free trade agreement with us, in the form of the Central American Free Trade Agreement, making them our trade partner. The New York Times writes that this is “the first time Washington has pursued such a case against a free-trade partner.” This is not suppose to happen.
Why are they doing this? U.S. Trade Representative Ron Kirk says it is because of the labor abuses in the country. While there are serious labor issues in Guatemala, is the WTO really the best place to address these types of issues? (answer: no). The long, slow, and expensive process of WTO court will likely have no effect for years to come, if ever. Furthermore, I would imagine Guatemala has very little experience in this area and can scarcely afford it. Two problems the U.S. does not have. This act is nothing more than political pandering to the American labor unions and anti-trade crowd.
The question is, will this be one step backwards in anticipation of taking two (or three) steps forward by signing the South Korean FTA, or is this simply a step backwards with no forward momentum? This has yet to be seen.
Coming up on two years and the United States STILL does NOT have a trade policy. (sigh).
