Trade Win No. 7
Trade agreements have helped prohibit forced labor
Coordinated forced labor bans have reaped palpable rewards for workers in the supply chain, as illustrated by the well-known Malaysian Rubber Gloves case. Efforts there led to new recruitment protections and housing for migrant workers, as well as a multi-million dollar fund for victims. The US-Mexico-Canada Agreement (USMCA) shows how trade agreements can provide a platform for government officials to coordinate such forced labor efforts. It also shows how such commitments can be extended to other countries. After concluding the USMCA, Canada negotiated the 2023 Canada-Ukraine Free Trade Agreement, which copies the USMCA’s forced labor provisions, requiring Ukraine to prevent the import of goods produced entirely or partly by forced or compulsory labor.
Despite global efforts, approximately 27.6 million children, women, and men across countries and economic sectors work in conditions of forced labor. National governments have struggled to establish effective methods for identifying goods produced under forced labor conditions before those goods enter their borders. Recent efforts to tackle forced labor through commitments and coordination under trade agreements show significant promise in promoting forced labor prohibitions across borders.
In the United States, efforts to identify and prohibit the importation of goods made by forced labor began in earnest in 2015, when Congress amended Section 307 of the Tariff Act to remove a “consumptive demand” requirement. That requirement had limited enforcement to goods in which domestic production could not meet American consumer demand. Since then, the U.S. Customs and Border Protection (CBP) has increasingly pursued Section 307 enforcement to detain shipments that contain goods or inputs made with forced labor before they can enter the United States.
Generally, CBP’s administrative procedures are praised for incorporating input from other U.S. federal agencies and for streamlining the collection and processing of evidence and reports of forced labor. Its success follows the lessons it has learned through fits and starts, when CBP grappled with unfamiliar evidentiary burdens and administrative processes.
Despite CBP’s enforcement actions, until recently, goods made in whole or in part by forced labor were sometimes diverted into neighboring Mexico and Canada and then sent through intermediaries into the United States. In 2020, the USMCA committed the Parties to eliminating all forms of forced or compulsory labor, including through import bans. They agreed to “establish cooperation for the identification and movement of goods produced by forced labor,” a process that helped them synthesize inter-governmental forced labor administration.
Shortly after concluding the USMCA, Canada amended its Customs Tariff Act to prohibit the importation of goods made by forced labor and is currently debating additional amendments to strengthen enforcement and broaden the ban’s scope. In 2023, Mexico similarly published an administrative regulation prohibiting the importation of goods produced using forced labor. Both countries are continuing to adapt customs procedures adopted in the United States to align with their national circumstances.
Coordinating efforts across countries to ban forced labor, including sharing lessons learned, can ensure that workers are not forced into facilitating trade against their will.
