Labor Department Bureau’s Loss Will ‘Put American Workers Last,’ Trade Groups Say

The American Apparel & Footwear Association and the Fair Labor Association have once again come to the defense of the U.S. Department of Labor’s Bureau of International Labor Affairs, which suffered a body blow last week after the federal government axed nearly $580 million in grants meant to shore up workers’ rights and fight child and forced labor in global supply chains.

Their letter to Jamieson Greer, who was confirmed in late February as the 20th United States Trade Representative, is the trade group and multi-stakeholder organization’s second joint entreaty to “fully preserve and promote” the bureau commonly known as ILAB. The AAFA had also posted a “reaction” last Wednesday night expressing what it said was its alarm at the cancelation of contracts that “promote a fair global playing field for American workers and businesses” by educating workers about their rights and rooting out forced labor. Together, AAFA and FLA’s rosters include such brands as Gap Inc., J.Crew Group, H&M Group and Nike.

Writing to Geer on March 31, Steve Lamar, AAFA’s president and CEO, and Jeff Vockrodt, FLA’s president and CEO, appealed to the Trump redux administration’s protectionist trade policies, which it maintains can resuscitate “made in the U.S.A.” and reduce the nation’s dependence on imports. While 97 percent of all clothes, shoes and accessories sold in the United States originate from overseas, Lamar and Vockrodt said, the domestic fashion industry employs 3.5 million American workers—in design, R&D, compliance, marketing, logistics, retail and, indeed, manufacturing—who rely on ILAB’s “essential work” to further their interests.

“ILAB grants, technical assistance and support build institutions in countries around the world so that they can effectively protect their workers, raising labor standards and eliminating opportunities for less scrupulous foreign businesses to profit from labor abuses while American businesses and workers play by the rules,” they said. “ILAB does this by enforcing the worker rights commitments of America’s trading partners and employing technical assistance and support to combat forced labor, including child labor and human trafficking and other labor abuses.”

In their dispatch to Greer and, mere weeks before that, to Secretary of Labor Lori Chavez-DeRemer, who would later celebrate her department’s disendowment on X, Lamar and Vockrodt described ILAB as not just an organization that builds institutions so other countries can “effectively protect their workers,” but also a “critical funder and manager” of the International Labour Organization’s Better Work program, which “establishes strong labor enforcement and transparency in key countries around the world” and pushes back against unsavory trade. American workers and businesses, they said, should not have to face unfair competition, in a “race to the bottom,” from labor markets whose “profitability depends on forced labor or other labor abuses such as unsafe workplaces and blocking workers’ freedom of association.”

“I worry that the U.S. is also being pretty unstrategic in terms of ceding a lot of ground to China,” Shawna Bader-Blau, executive director of the Solidarity Center, a Washington, D.C.-based workers’ rights nonprofit that estimates it’s losing $78 million over multiple years because of the ILAB cuts, told Sourcing Journal. “This is one of the most bipartisan thing you can find: America and China’s roles in the global economy and how they fit together, and the extent to which ILAB programs were supporting the development of models of labor standards that were based on international standards.”

As things stand, maintaining those standards could face significant headwinds. The ILO, the United Nations’ workplace standards-setting body, was especially hit hard by the Department of Government Efficiency’s carve-outs. Of the active grants listed on a federal website, the agency was the beneficiary of some $215 million, or more than 40 percent, of the congressionally appropriated funds. The money was being used to combat human trafficking in Mexico, promote migrant workers’ rights in Jordan, support industrial relations reform in Malaysia and tackle child labor in West Africa. Together with aggressive cost-cutting measures that have rendered the U.S. Agency for International Development, or USAID, all but eliminated, the ILO estimates that 50 of its U.S-funded projects are now dead in the water, affecting nearly 190 staff at headquarters and in the field. 

With the United States as its second-largest voluntary funding contributor after the Netherlands, which is also tightening its foreign aid belt, in 2024, the ILO is “still assessing the full impact of this decision on the beneficiaries of these programs,” a spokesperson said. Better Work alone spans roughly a dozen countries, including Bangladesh, Haiti, Indonesia, Uzbekistan and Vietnam. Though the program has come under scrutiny in the past, including for failing to identify breaches of workers’ rights in Cambodia, it also contributed guardrails in a sector that is woefully bereft of them, preventing abusive practices, mitigating excessive overtime and closing the gender wage gap in participating factories.

“It’s important that brands continue to support the program, which is subsidized by ILO,” one former staffer said on the condition of anonymity because of the sensitive nature of the issue. “Factories and buyers pay Better Work but they don’t fully cover all the costs.” In Bangladesh, for instance, 50 percent of the Better Work program is covered by donors. The private sector, this person said, will have to step up, particularly in poorer countries like Haiti and Jordan where the factory monitoring platform is statutorily required under the HOPE II legislation and the Jordan-United States Free Trade Agreement, respectively.

Enforcing labor provisions in trade agreements has been ILAB’s driving force, AAFA and FLA agreed. The bureau’s work under the United States-Mexico-Canada Agreement, which President Donald Trump negotiated in his first term, and the Dominican Republic-Central America Free Trade Agreement help provide good jobs in their respective regions that discourage migration to the United States, Lamar and Vockrodt told Greer, hitting another one of the administration’s policy priorities.

The proof is in the numbers: A study in Honduras by Mark Anner, founding director of Pennsylvania State University’s Center for Global Workers Rights and lately of Rutgers University, found that workers covered by collective bargaining agreements in the workplace are 25 percent less likely to want to leave their country because they have access to decent work and fair wages.

“If ILAB and its programs are not funded, it will lead to more unfair trade for American businesses and American workers,” they added. “This will put American workers and American businesses last, leading to unfair competition with countries and foreign businesses that are not held to the same laws and standards for labor abuses, forced labor, human trafficking and child labor.”