Office of the U.S. Trade Representative announces Section 301 investigation of Nicaragua

The United States Trade Representative (USTR) announced an investigation under Section 301 of the Trade Act of 1974 into Nicaragua’s conduct, policies, and practices regarding labor rights, human rights, and the rule of law. This is the first Section 301 investigation involving policies and possible violations of labor and human rights.

301 background

Section 301 of the Trade Act of 1974 is designed to address unfair foreign practices that affect U.S. commerce. It gives the U.S. Trade Representative a range of powers to investigate unfair trade practices and enforce U.S. rights under trade agreements.

Under Section 301, the U.S. government may impose trade sanctions on foreign countries that engage in conduct that burdens U.S. commerce or violates trade agreements.

The law does not limit the scope of the investigation, but it does mention several categories of activity that may be subject to Section 301 actions, including:

(1) Illegal conduct that infringes upon the rights of the United States under trade agreements

(2) “Unreasonable” conduct “burdens or restricts U.S. commerce”

(3) “Unreasonable” or “discriminatory” behavior that “aggravates or restricts” U.S. commerce.

“Business” is defined to include goods, services and investments.

Examples of previous Section 301 investigations include investigations into China’s technology transfer practices, Vietnam’s currency manipulation, and various countries’ digital service taxes.

Nicaragua Survey

The investigation into Nicaraguan conduct follows numerous credible reports that the Ortega-Murillo regime violated human and labor rights and undermined the rule of law. Activities cited by USTR include:

• Politically motivated arrests and imprisonment
• Repression against members of religious groups and NGOs
• extrajudicial killing
• Cruel, inhuman or degrading treatment
• Restrictions on freedom of expression and movement
• Violence against members of marginalized groups
• Suppression of freedom of association and collective bargaining
• Forced labour, human trafficking, elimination of legislation and judicial independence
• False seizures of property, arbitrary fines and awards, and other harmful conduct

The Nicaraguan government has not responded to concerns raised by the United States or other countries, according to the Office of the U.S. Trade Representative. The stated goal of the investigation is to address these issues to ensure that American companies and workers are treated fairly and with equal respect under the rule of law.

The Office of the U.S. Trade Representative is seeking public comment on this matter until January 8, 2025. The agency will also hold a public hearing on January 16, 2025.

Diaz Trade Law has extensive expertise in Section 301 matters. If you have questions about the Section 301 investigation or would like to participate in this investigation, please contact info@diaztradelaw.com.

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