The United States Trade Representative (USTR) announced the investigation regarding Nicaragua's acts, policies, and practices related to labor rights, human rights, and the rule of law under Section 301 of the Trade Act of 1974. This is the first 301 investigation involving policies and practices that may violate labor rights and human rights.
301 Background
Section 301 of the Trade Act of 1974 is designed to address unfair foreign practices affecting U.S. commerce. It grants USTR a range of authorities to investigate unfair trade practices and to enforce U.S. rights under trade agreements.
Under 301, the U.S. government may impose trade sanctions on foreign countries that engage in acts that are burdensome to U.S. commerce or that violate trade agreements.
The law does not limit the scope of investigations, but it does mention several categories of activities that are subject to 301 action, including:
(1) a violation that denies U.S. rights under a trade agreement
(2) an "unjustifiable" action that "burdens or restricts" U.S. commerce
(3) an "unreasonable" or "discriminatory" action that "burdens or restricts" U.S. commerce.
"Commerce" is defined to include goods, services, and investment.
Previous examples of 301 investigations include investigations into China's technology transfer practices, Vietnam's currency manipulation, and Digital Services Taxes in various countries.
Nicaragua Investigation
The investigation into Nicaragua's acts follows numerous credible reports that the Ortega-Murillo regime engages in human rights and labor rights violations and dismantling the rule of law. Activities cited by USTR include:
- Politically-motivated arrests and imprisonments
- Repression of members of religious groups and non-governmental organizations
- Extrajudicial killings
- Cruel, inhuman or degrading treatment
- Restrictions on freedom of expression and movement
- Violence against members of marginalized groups
- Repression of freedom of association and collective bargaining
- Forced labor, human trafficking, eliminating legislative and judicial independence
- Spurious seizures of property, arbitrary fines and rulings, and other harmful acts
According to USTR, the Government of Nicaragua has not responded to concerns raised by the United States or others. The stated goal of the investigation is to address and resolve these concerns to ensure U.S. companies and workers are treated fairly and with equal respect under a rule of law system.
USTR is seeking public comments on this matter, which are due January 8, 2025. The agency will also hold a public hearing on January 16, 2025.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
