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This contribution focuses on a specific phrase that is often found within these labour disciplines, expressly linking labour standards (or their violation) to trade.

The meaning of ‘in a manner affecting trade’ has been the subject of much discussion recently, particularly following the decision by a panel rejecting the United States’ complaint brought against
Guatemala. Relying on a relatively narrow interpretation of the relevant phrase – ‘in a manner affecting trade’ – the Panel concluded that the United States had failed to demonstrate the required link between Guatemala’s failure to enforce its labour standards effectively and trade between the CAFTA-DR parties (USGuatemala Panel Report 2017). Was the US-Guatemala panel correct in its interpretation of the specific language on trade linkages in Article 16.2.1(a) of CAFTA-DR? As many labour obligations in RTAs adopt similar language, answering this question has become crucial in order to assess the strength of labour obligations in trade agreements (Claussen 2020: 32).

The EU has, for one thing, used the same language in its recent FTAs, not only with regard to so-called non-enforcement clauses (such as the one in Article 16.2.1(a) CAFTA-DR), but also with regard to non-derogation clauses (Bronckers and Gruni 2019; Hallak 2021).

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Trade and labour linkages and the US–Guatemala panel report-Critical assessment and future impact_2021.pdf