Recommendation: To reflect the evolving U.S. experience with FTAs and better ensure progress in achieving stated U.S. objectives related to labor and the environment, USTR, should, in cooperation with other agencies, as appropriate, prepare updated plans to implement, enforce, monitor, and report on compliance with and progress under the FTAs' labor and environmental provisions. To facilitate oversight and input, these plans should reflect ongoing trade developments, be provided to Congress, and summarized in USTR's annual trade agreements report.

Agency Affected: Executive Office of the President: Office of the U.S. Trade Representative

Status: Open

Comments: In an interview in December 2010, USTR officials described a number of steps they have taken, or were in the process of taking, to address parts of the recommendation that focused on monitoring, implementation, and enforcement. The officials told us that the regularly scheduled bilateral meetings between the United States and its FTA partners, which review FTA implementation generally, now routinely include discussion of both labor and environmental issues. In 2009 and 2010, USTR held meetings to oversee implementation of the agreements' labor provisions with some partner countries for the first time. USTR and associated agencies (primarily Labor and State) have begun to more systematically consider which FTA partners and which FTA-related labor and environmental issues require more attention (e.g., monitoring and cooperative projects) from the United States. With respect to labor, USTR obtained input from relevant embassies, in response to a December 2009 State cable to all posts of partner nations whose FTAs included labor provisions, that helped establish a baseline assessment of FTA partner nations' labor rights and the status of compliance with FTA labor chapters. USTR officials told us in May 2011 that the interagency group had developed a working list of priorities for engagement with FTA partners on labor issues that will become a basis for making U.S. resource decisions in the future. With respect to the environment, in 2009, USTR formed a subcommittee of the Trade Policy Staff Committee to focus on monitoring of implementation and compliance under the FTA environment chapters. USTR officials said they are focusing attention primarily on the Peru FTA, which they perceive as having the most serious environmental implementation issues. USTR and State officials reported that the increased U.S. emphasis on implementing the labor and environment provisions of the FTAs has resulted in greater openness by some partner governments to holding consultations with the private and nongovernmental sectors on these topics. For example, USTR said that in Bahrain and Peru the governments made first steps toward such outreach by holding meetings with businesses and nongovernmental groups concerning the labor and environment provisions, respectively, of their FTAs. Also, in Jordan, steps have been taken to provide regular monitoring at all factories under a project sponsored by the International Labour Organization that covers 60 percent of factory workers in the export garment industry. To address the part of the recommendation that USTR report on compliance with and progress under the FTAs' labor and environmental provisions, an October 2009 letter from USTR said that USTR would include a summary of current activities and plans in its Annual Report. USTR's 2009 and 2010 Annual reports both contained summaries of activities and plans with regard to labor and environment matters. USTR continues to take steps in this area, and we will update the status as their efforts are completed.

Recommendation: The Secretary of Labor should direct the Bureau of International Labor Affairs (ILAB), in consultation with other agencies as appropriate, to reinvigorate its implementation and cooperation responsibilities under the FTAs by initiating regular contact with all FTA partners' ministries of labor to review implementation of FTA labor provisions and to develop ongoing priorities and plans for technical cooperation on labor matters, as guided by the labor cooperation annexes and the partners' common interests and needs. The Department of Labor should consider, identify, and if necessary request appropriate resources such as new funding to undertake such contact and cooperation, including by coordinating with other agencies that can facilitate or assist these efforts.

Agency Affected: Department of Labor

Status: Open

Comments: DOL agreed with GAO's recommendation, and ILAB has taken several steps to become more proactive in fulfilling its FTA implementation and cooperation responsibilities. To improve contact with FTA partners, ILAB created a supervisory position to oversee ongoing communication and engagement by ILAB staff with partners' ministries of labor. To develop priorities and plans for cooperation and assistance, ILAB undertook strategic planning for its activities (feeding into DOL's FY 2011-16 Strategic Plan) that considered key labor-related opportunities and challenges for each FTA partner. To help improve monitoring of country performance on labor issues, ILAB is developing performance measures and establishing baselines for FTA partners and other countries. To support these activities, DOL requested and received additional funding and staff for ILAB in FY 2010 specifically to improve its ability to monitor labor issues in FTA countries, strengthen the enforcement of trade agreements, develop cooperative activities with FTA partners, and research facts relating to labor situations and public submissions claiming labor violations under FTAs and other trade programs. The increase in ILAB's budget was maintained in FY 2011. In addition, the Office of the U.S. Trade Representative (USTR) stated that the U.S. interagency group (of which DOL is a member) that is involved in overseeing the labor provisions of FTAs has increased its monitoring and enforcement efforts in response to GAO's report and that the interagency group had developed a working list of priorities for engagement with FTA partners on labor issues that will become a basis for making U.S. resource decisions in the future. DOL continues to take steps in this area, and we will update the status as their efforts are completed.

Recommendation: The Secretary of State should direct the Oceans and International Environmental and Scientific Affairs Bureau (OES) to work with other agencies to develop a more structured approach to manage and monitor the implementation of environmental cooperation mechanisms and projects. This should enable State to more readily track progress and include information such as number and nature of activities, source and amount of funding, and, to the extent practical, performance indicators and benchmarks to measure appropriately the progress made in accomplishing or otherwise furthering the goals and objectives of such programs, projects, and activities and public reporting of that progress.

Agency Affected: Department of State

Status: Closed - Implemented

Comments: In response to our recommendation, State reported in July 2010 that it had recently developed a more structured approach to manage and monitor the implementation of environmental projects. Specifically, OES implemented a spreadsheet-based tracking system to monitor implementation of the Environmental Cooperation Mechanism (ECM) Work Programs and Plans of Action. Through this system, they track for each activity in the work plan, the amount of funding (if any), the funding source, the primary implementer, the primary U.S. Government agencies involved, relevant FTA-partner country agencies, and progress on implementation. OES reported that this tracking system complements other ongoing processes for ensuring robust implementation of ECMs, including negotiating comprehensive Work Programs with FTA countries and conducting extensive oversight of OES-funded grantees or technical agency partners. In December 2010, GAO followed up with State on the implementation of the spreadsheet tracking system and determined that the OES effort has led to a more standardized and systematic approach to track progress, in response to the GAO recommendation. Also in response to our recommendation that State work with other agencies to develop this structured approach, in December 2010, OES reported that interagency cooperation on providing information about the results that they are achieving with their environmental projects has improved. OES holds interagency meetings every few months and works very closely with other agencies.

Recommendation: The Secretary of State should direct OES to use this information to publicly report to Congress on cooperative activities and projects with FTA partners and their outcomes, as well as their role in furthering U.S. trade policy goals and FTA and FTA-related cooperation objectives.

Agency Affected: Department of State

Status: Closed - Implemented

Comments: In a December 2010 interview to discuss State's actions to respond to the recommendation, OES officials indicated that they had provided a briefing to staff of the House Ways and Means Committee in the summer of 2010 and also held a general OES briefing for other Congressional staff. They also briefed staff of the Senate Foreign Relations Committee, and planned future briefings. A State official said that USTR's Congressional Affairs office was continuing to reach out to interested Congressional representatives. OES officials said they are also using public venues to provide information about environmental progress through FTAs. For example, a meeting of the United States-Central America-Dominican Republic Free Trade Agreement (CAFTA-DR) Environmental Affairs Council on January 27, 2011, included a session with the public to discuss the environmental achievements resulting from cooperation under the FTA.