On the face of it, the National Labor Relations Board’s effort to block a new Boeing plant slated for the right-to-work state of South Carolina seems like a futile exercise. After all, we live in a global economy, and that means U.S. producers who can’t access a competitive labor market at home can go abroad.

That is unless Big Labor manages to impose its stifling regulatory model beyond American borders. In that case, costs could be pushed up strategically elsewhere, and companies that might otherwise try to escape U.S. regulation would have nowhere to run.

The effort is already under way in Latin America, where countries that have signed free-trade agreements are being increasingly bullied by the Obama administration. The administration claims it is defending worker rights, but it seems more likely that it wants to use labor regulation as a back door to increase protectionism at the behest of U.S Big Labor.

Take the U.S. Trade Representative’s announcement last month that it intends to take Guatemala to an arbitral panel for “apparent systematic failures” in enforcing Guatemalan labor laws under the Central American-Dominican Republic Free Trade Agreement (CAFTA-DR). The action, according to the USTR, was born of an AFL-CIO petition—filed with six Guatemalan workers groups—which makes the same allegation. USTR says it, along with the Departments of Labor and State, analyzed the AFL-CIO claim and decided to pursue it because it “appeared” to be correct.

When I spoke with Guatemalan economy minister Luis Velásquez last week by telephone in Guatemala City, he told me that through a series of consultations, the two parties had reached agreement on 14 of 17 points that the U.S. had raised. There is a standoff on the remaining three and, as importantly, on how the two parties ought to proceed.

Mr. Velásquez points out that under CAFTA-DR rules an unresolved dispute goes first to a commission—representing the seven countries—that administers the treaty. It is only if there is no resolution there that it goes to an arbitration panel. “We don’t understand why the U.S. does not want to respect the proper procedure contained in the treaty. We asked the USTR and we got no response,” he told me. I also asked the USTR and got no response.

Mr. Velásquez says he doesn’t know the motives of the U.S. and doesn’t want to speculate. But as an observer it occurs to me that it’s fear that the other CAFTA-DR trading partners may not side with the U.S. They are not likely to be sympathetic to what the AFL-CIO wants to do to their neighbor because they know they could be next.

One of the U.S. demands is to add 100 labor inspectors to the government payroll immediately. Mr. Velásquez says that while Guatemala is willing to comply with the increase, the estimated cost, in the millions of dollars, is not in the current budget. Guatemala has said it will add the inspectors next year but that’s not good enough for Uncle Sam.

A second demand is to force all exporters to indemnify their workers against a company failure by buying a bond. Mr. Velásquez says that Guatemala’s constitutional court has said no to this because singling out exporters would be discriminatory. He also notes that U.S. exporters are under no such obligation.

Finally, and perhaps most egregiously, the U.S. wants Guatemala to give labor inspectors the authority to close a plant deemed to be in violation of the labor code. The trouble is, Mr. Velásquez points out, inspectors are not judges and the accused has the right to have the case heard in a court of law. Otherwise, he says, “we would turn our inspectors into emperors.” It is passing strange that the U.S. is trying to undermine Guatemala’s frail democracy in favor of the kinds of practices that occur in dictatorships.

More broadly, the AFL-CIO-inspired demands would raise costs for Guatemalan exporters and even drive them out of business. Would any improvement in labor conditions generally be worth that price? Probably it would not, judging from a recent working paper on the subject by economists J.R. Clark of the University of Tennessee at Chattanooga and Ben Powell of Suffolk University in Boston.

They surveyed workers at two Guatemalan firms that were designated as “harmful sweatshops” by the nonprofit watchdog National Labor Committee. The authors note that, since these two firms were singled out by the NLC, it is reasonable to conclude that they were among the worst “sweatshops.” Yet they found that “wages and working conditions [were] superior to the workers’ prior employment.” They also found that “the mix of compensation between wages and working conditions reflect[ed] employee preferences” and that “employees found their conditions less satisfactory when a firm capitulated to activist demands.”

Messrs. Clark and Powell do not argue that working conditions in Guatemala are equal to the U.S. But their survey shows that among the options Guatemalans have, export industries are attractive, and if they go out of business, Guatemalans are worse off.

So who is the Obama administration out to “help?” I’m guessing it isn’t the Guatemalan worker.