The United States (US) has launched an investigation into the Philippines and 59 other major trading partners over allegations that they have failed to effectively ban the importation of goods produced through forced labor.

In a statement, the Office of the US Trade Representative (USTR) said it is initiating a wide-ranging Section 301 (b) investigation into the acts, policies, and practices of 60 economies.

Under this law, the USTR is authorized to launch investigations to determine whether a foreign country’s trade policies are unreasonable or discriminatory, which could restrict US commerce.

Ending forced labor is a major priority for the US, with recent negotiations involving reciprocal tariff agreements invoking the initiative as a mandatory provision.

The USTR, however, noted that none of the 60 identified economies have yet to adopt or effectively enforce a forced labor import prohibition.

“Although a majority of countries prohibit forced labor as a matter of law within their jurisdiction, such prohibitions are insufficient to prevent firms from profiting from forced labor,” the agency said.

“In the absence of a forced labor import prohibition that is effectively enforced, firms can continue to source, use, and profit from

imported products produced with forced labor, even if the use of forced labor is prohibited domestically,” it added.

The USTR said this practice may negatively affect American commerce, as it essentially forces local businesses to compete with companies that have an artificial cost advantage due to forced labor inputs.

Citing estimates from the International Labor Organization (ILO), the USTR said profits from forced labor in the global private economy amount to roughly $63.9 billion annually.

It estimated annual profits per victim at $2,113 in the agriculture sector and $4,994 in the industry sector—the highest among sectors in the private economy.

For the Philippines, Trade Undersecretary Ceferino Rodolfo said the country welcomes the USTR investigation, saying it would help clarify the country’s policies on the importation of products manufactured through forced labor.

“I'm very confident that if we're given the opportunity to provide more information and greater interaction and engagement with the US side, we will be able to fully explain why we should not be part of the investigations,” he told reporters.

On the domestic production front, Rodolfo said the country remains in line with labor policies curbing the practice of forced labor, citing compliance with the US-Philippines Trade and Investment Framework Agreement (TIFA).

Under TIFA, both countries pledged to recognize the significance of “working toward the observance and promotion of mutually recognized workers’ rights” for their respective economic welfare.

Rodolfo also noted that the country remains exempt from the USTR’s investigation involving structural excess capacity and production in manufacturing sectors.

“Please note further that most of our neighbors—Cambodia, Indonesia, Malaysia, Thailand, and Vietnam—are part of the investigations for both forced labor and excess capacity,” he said.

Following the USTR’s initiation of an investigation into imports made with forced labor, the agency will now seek consultations with the economies whose acts, policies, or practices are under review.

The USTR has requested consultations with the governments of these economies in connection with the probe, with public hearings on the matter set to begin on April 28.