Features of the Agreement
The NAALC, which is complementary
to the NAFTA, may be seen as what
is commonly called a "social clause"
in agreements to liberalize international
trade: it deals with workers'
rights, not for workers directly
but in correlation with the establishment
of the North American Free Trade
area (Preamble). It was an innovation
for the three countries in question,
and even in a much wider context.
The implementation of the Agreement
in its early years must therefore
be assessed in light of the fact
that initially it was a new departure
both for its signatories and for
areas affected by it.
Having said that, there are
three aspects or features of the
Agreement which merit particular
attention, on account of the significant
influence they may have on its
implementation.
First, both as to the substance
of the law and its application,
the approach is trinational and
not supranational (Article 49).
As one writer aptly put it, the
Agreement "places governments
not in a vertical relationship
to an international body but in
a horizontal relationship to each
other."1
In other words, as has also been
remarked, "Instead of yielding
sovereignty over the content of
their labor laws and standards,
the NAFTA countries shaped the
NAALC to open themselves up to
trinational scrutiny of their
enforcement regimes."2
However, that does not prevent
relatively precise procedural
standards being created by the
Agreement itself governing the
application of labor law in each
of the three countries; these
are requirements which each of
the Parties must comply with in
the operation of its administrative
and judicial systems, though they
are formulated by an external
source. Moreover, as we shall
see, the Agreement provides for
the intervention of independent
third parties, evaluation committees
of experts (Article 23) and Arbitral
Panels (Article 29), to deal with
various problems involving "technical
labor standards." This adds another
supranational aspect to an Agreement,
which is in general still trinational
in other respects.
Second, the Parties indicated
their desire to use cooperation
and mutual consultation to ensure
that the Agreement is given full
effect. Article 20 requires such
a cooperative approach in general
terms: "The Parties shall at all
times endeavor to agree on the
interpretation and application
of this Agreement, and shall make
every attempt through cooperation
and consultations to resolve any
matter that might affect its operation."
Third, implementation of the
NAALC rests with the Parties themselves.
This applies to cooperative activities
(Article 11), cooperative consultations
and evaluations (Part IV), as
well as the resolution of disputes
(Part V). The opportunity offered
to members of the public, individuals
or groups, whether union, employer
or otherwise, to submit to the
various NAOs for their consideration
communications on questions dealing
with labor legislation is thus
a significant derogation from
the otherwise public- or government-driven
implementation of the Agreement.
The detailed consideration of
the processing of such public
communications made during the
period in question (Section III,
infra) will show how important
this window to the public is.
A certain degree of confusion
appears to emerge from reading
the Agreement as a whole. Thus,
as already indicated, as the Agreement
is in the nature of a "social
clause," it is not concerned with
workers' rights in themselves,
but with the mutual relations
they may have with the liberalization
of trade between the three countries.
To illustrate, the NAALC opens
the way to third-party intervention
(Articles 23 and 29), and thus
in some cases to a method of compensation,
only to the extent that persistent
practices relating to technical
labor standards are "trade-related."
Although in the aforementioned
list of its objectives the Agreement
speaks of "improving working conditions
and living standards in each Party's
territory" (Article 1(a)) and
"promoting to the maximum extent
possible the labor principles
set out in Annex I" (Article 1(b)),
it also recognizes the right of
each Party "to establish its own
domestic labor standards, and
to adopt or modify accordingly
its labor laws and regulations,"
as it is the duty of each Party
to "provide for high labor standards"
(Article 2). Similarly, the Agreement
requires each Party to "promote
compliance with ... its labor
law" (Article 3(1)), while at
the same time it affirms "full
respect for each Party's constitution"
(Article 2) and makes allowance
for various manifestations of
"a reasonable exercise" of discretionary
governmental authority (Article
49).
Finally, as we have seen, the
Agreement is in general framed
in terms of cooperation between
the Parties and, in particular,
contemplates the development of
a wide range of cooperative activities
between them (Article 11); that
does not preclude drawing up a
detailed and compulsory method
for resolving disputes (Part V).
All this may result in a large
number of special pleas and may
even contribute to a certain overall
balance; nonetheless, the very
structure of the Agreement is
not devoid of potential areas
of conflict. Only subsequent analysis
of the first years in which it
was in effect (Sections II and
III, infra) will indicate to what
extent these areas of uncertainty
have in fact become apparent.
Institutional Aspects
Implementation of the Agreement
depends on certain institutions
for which it provides, some permanent
in nature, others temporary or
ad hoc institutions.
1. Permanent Institutions
The permanent institutional
framework created by the Agreement
is an original combination of
a central body, the Commission
for Labor Cooperation, and national
institutions.
a. The Commission for Labor
Cooperation
The Commission consists of a
Ministerial Council and a Secretariat.
The Council, comprising labor
ministers of the Parties, is the
governing body of the Commission
(Article 10). Among its duties
is the promotion of a wide range
of cooperative activities between
the Parties (Article 11; Section
II, infra, will deal with this
aspect). It must also be seen
as responsible for the effective
operation of cooperation, evaluation
and dispute resolution machinery
on account of its manifold interventions
in those areas (see to this effect
Articles 26, 28, 29, 30, 39 and
40). It has made its own rules
and procedures (Article 9(2))
and has also created detailed
rules and procedures for the ECEs
(Article 24); similar rules are
also being developed for arbitral
groups (Article 33). The Council
has not yet had to intervene in
the proceedings of experts or
arbitral panels (as will be seen
in Section III, infra) but this
is a situation that could change
in years to come. The Council
has regularly held annual meetings
(Article 9(3)(a)); however, there
have been no extraordinary sessions.
At the same time, as will be seen
(Section III, infra), the processing
of public communications has given
rise to separate Ministerial Consultations.
The important point is that,
whenever the highest labor authorities
of the three countries met or
otherwise consulted together,
the Agreement was an opportunity
for the creation of a trinational
ministerial forum that would probably
not otherwise have existed, at
least judging from the experience
of the years preceding its implementation.
This impact is of the first importance
since the most essential objective
is to ensure a healthy relationship
between the liberalizing of trade
between the three countries and
the working conditions and labor
relations within them.
The Secretariat, which also
forms part of the Commission,
is responsible for assisting the
Council in exercising its functions
(Article 13). On a day-to-day
basis, it may be regarded as the
Commission's working arm. However,
it should be noted that, unlike
the Secretariat of the Commission
for Environmental Cooperation,
this Secretariat does not receive
public communications containing
allegations that the applicable
national law of one or other of
the three countries is not being
implemented. This solution of
nonintervention by the Secretariat
in such contentious situations
has the advantage of enhancing
long-term independent research
activities for which the Secretariat
is responsible under the Agreement
(Article 14). So far as its own
organization is concerned, the
Secretariat, starting from zero,
has been able in these initial
years to build a capacity for
handling requirements corresponding
to the initial phase of implementation
of the Agreement. This is true
both as to its staff, the composition
of which is balanced in terms
of scientific and national origin,
and its physical organization,
an aspect that is indicated by
the creation of a modest documentation
center.
It may be doubted, however,
whether with limited staff (Article
12(3)) and physical resources
at their present level, the Secretariat
will be able to provide adequately
for the development of the various
forms of action included in its
mission in the coming years, in
view of the size of the labor
market in question and its trilingual
nature. We are thinking here in
particular of the requirement
(discussed in Section II, infra)
that it provides a significant
amount of basic comparative research
of an empirical, legal and institutional
nature. This should not be a simple
question of coordinating national
inputs but, to a much greater
extent, of centralized and independent
work which should be done by the
Secretariat itself, assuming of
course that it has the resources
to do this work.
b. National Institutions
The national institutions in
question are first of all the
National Administrative Offices
(NAOs). The three NAOs form part
of the departmental organization
of each of the states in question.
In each case it appears that they
have the resources to adequately
carry out their duties, at least
at the present level of activity.
Sections II and III, infra, will
discuss respectively in each case
the accomplishments of the NAO
in the field of cooperative activities
and its involvement in the handling
of public communications. We will
also see to what extent the NAOs
have worked together during the
period in question on these two
types of activity, as well as
with the Secretariat, as provided
in the Agreement. The governmental
nature of the NAOs calls for one
immediate comment, as regards
the handling of public communications,
a field of activity which has
had a quite decisive effect on
a gradual acceptance of the Agreement
in labor circles, as will be indicated
in Section III, infra. If this
procedure of public communications
being reviewed by the NAOs is
to be objective and seen to be
so, it must be subject in general,
including the preliminary stage
of deciding whether to accept
communications, to rules of procedure
which are both clear and accessible
to the public. Each of the three
Parties has in fact set up its
own rules. In each case these
rules naturally bear the imprint
of a distinct quasi-judicial and
national administrative tradition.
However, greater uniformity in
these three sets of rules would
be desirable, as each NAO is responsible
for considering matters arising
in the territory of another Party,
and moreover often at the instance
of submitters that include organizations
originating in the country of
that Party (as will be seen in
Section III, infra). For example,
with respect to holding a public
hearing, the Mexican rules allude
to the possibility of organizing
"sesiones informativas" (Article
7); the Canadian rules state different
possible formats for the examination,
including "public meetings or
consultations" (Article 5(a)),
whereas the American rules indicate
that the NAO Secretary "shall
hold promptly a hearing on the
submission, unless [he/she] determines
that a hearing would not be a
suitable method for carrying out
the Office's responsibilities"
(Article H 3). Allowing for different
perceptions derived from distinct
national traditions and culture,
such an explicit relative presumption
in favor of a public hearing,
in itself, appears a salutary
countervailing element to an otherwise
discretionary governmental process.
It will help establish public
confidence in the process.
The governmental nature of the
NAO finally contributes all its
importance in each case to the
possible input of the National
Advisory Committee (Article 17).
All three countries have set up
such committees. The composition
of the committee must include
nationals of the country in question
and representatives of its labor
and business organizations. It
should adequately reflect the
plurality of views and interests
prevailing from time to time in
these circles. As to a Governmental
Committee, which each party may
convene (Article 18), only Mexico
and Canada have up to now availed
themselves of this possibility,
and the U.S.A. should do likewise.
2. Ad Hoc Institutions
Ad hoc institutions are created
from time to time solely in each
case to inquire into a particular
question; they refer to Evaluation
Committees of Experts (ECEs, Article
23) and Arbitral Panels (Article
29). Neither type has been formed
during the period in question.
However, ECEs should be dealt
with on account of the importance
of the part that they might one
day have to play in implementing
the NAALC.
Evaluation Committees of
Experts
The Evaluation Committees of
Experts -- the same is true of
Arbitral Panels -- are designed
to make possible an independent
analysis of patterns of practice
by the Parties in the application
of their technical labor standards.
Their activity thus occurs at
a completely different level from
the NAOs, as well as that of Ministerial
Consultations; unlike these procedures,
it brings a broader perspective
to the situations under consideration.
So far as these two supranational
procedures themselves are concerned,
the intervention of the ECE, though
it is a necessary stage before
proceeding to the arbitral stage,
in the few cases which allow it
(Articles 27 and 29), it occurs
in a quite separate process from
that corresponding to arbitral
intervention, which is itself
contentious in nature. Intervention
by the ECE, which is "nonadversarial"
(Article 23), is an example of
the "cooperative consultations
and evaluations" dealt with by
the Agreement in a separate part
(Part IV) from that reserved for
the resolution of disputes (Part
V). In this respect the intervention
of the ECE appears to correspond
more closely to the general desire
for consultation and cooperation,
which as we have seen should generally
characterize the implementation
of the Agreement.
Two factors could explain the
absence of any ECE action during
the period in question, despite
the inherent advantages of the
procedure. To begin with, the
first three Labor Principles --
freedom of association and protection
of the right to organize, the
right to collective bargaining,
and the right to strike -- do
not offer any basis for ECE intervention.
As we shall see in Section III,
infra, these are principles that
accounted for a really overwhelming
proportion of the activity by
NAOs and Ministerial Consultations
on public communications during
the four years in question. In
the light of experience gained
from this period of implementation,
it would appear that the Parties
should examine the advisability
of maintaining an exclusion of
such practical importance in light
of the experience gained from
these four years, especially as
there seems to be no compelling
logical explanation in support
of it.
Second, this absence of ECE
intervention up to now with respect
to matters presently covered could
perhaps result from the existing
practice of Ministerial Consultations.
Such Ministerial Consultations
are indeed a prerequisite to intervention
by an ECE (Article 23). Ministerial
Consultations have in fact only
taken place following NAO recommendations,
themselves the result of certain
public communications; they have
only been, as one might say, "reactive."
Nonetheless, the present wording
of Article 22 of the Agreement
is broad and allows plenty of
scope for Ministerial Consultations
that may be characterized as "proactive,"
that is, consultations regarded
as desirable by the ministers
though there has been no previous
review of a public communication
by an NAO.
There should also be more exchange
of information outside the communication
process, which is usually limited
to a single exchange. If such
a "proactive" approach were adopted
in the appropriate circumstances,
patterns of practices by any Party
could subsequently be more fully
scrutinized by independent experts
within the framework and procedures
established by the Agreement itself.
As such, the intervention of an
ECE is not to be considered equivalent
to independent expert advice that
may generally be sought by the
Council under Article 9(5) (a).
