Conference Agenda

Free Trade Agreements (FTAs) may not have the most outstanding reputation as a vehicle to promote labour rights. The removal of trade barriers between countries and the resulting increased competitive pressure for companies has traditionally been associated with risks of a race to the bottom in terms of protective standards. Legal routes to enabling the protection of such standards have usually taken the form of an exception to the rule: a state’s one-sided decision to implement trade restrictions may be considered legal based on a test of necessity (see notably Article XX GATT in the WTO framework). The EU as one of the internationally most advanced free trade areas has started from a similar model. Yet, over the decades, more and more aspects of ESG – including labour rights – have been made subject to certain common minimum standards, the implementation of which is mandatory and enforceable for all EU Member States.

The EU-Korea FTA is the first of a “new generation” of FTAs, in which the EU aims to implement the common minimum standards approach also in its international trade policy. As such, it contains a “sustainability clause”, which can be enforced via proceedings before a Panel of Experts. In 2018, this FTA also became the first under which proceedings of this kind were brought by the EU – in respect of a number of claimed violations of fundamental labour rights by South Korea. In January 2021, these claims were partly confirmed by a Panel of Experts. In other words, for the first time in history, a state was found in breach of a bilateral Free Trade Agreement for reasons of a failure to protect international labour standards.

What can be learned from this case and its aftermath about the potential of FTAs as an enforcement tool for labour rights? This question will be discussed by four researchers and practitioners of labour law in the EU and South Korea. The Special Session will feature:

• an introduction by Christina Hießl, professor at KU Leuven (Belgium) and invited professor of Yonsei University (Seoul);

• an evaluation to the topic from the Korean experience by Aelim Yun & Yeonmin Cho, researchers at the Institute of Workers’ Rights of the Korean Confederation of Trade Unions Legal Centre; and

• comments from an EU perspective by Elena Gramano (Ph.D.), Assistant Professor of Labour law at Bocconi University, Milan.

The EU is not the first international player to have sought to use FTAs to exert influence on trade partners’ domestic legislation. Yet, the EU-FTA case set the first precedent of a country being found guilty of violating a trade agreement because of its failure to protect labour rights, with no need to prove a particular relation to trade interests.

This introductory presentation will analyse the EU-Korea FTA decision i.a. by comparing it to “less successful” precedents such as the US/Guatemala case under the CAFTA-DR. Departing from such precedents as well as an overview of currently applicable sustainability clauses in FTAs, it will explore the role of such clauses’ formulation and scope, systematic integration in the agreement, procedures for examining claims of breaches, the legal value of rulings and sanctions. On this basis, it will draw tentative conclusions on the potential of FTAs for the protection of labour rights globally.

In the Korean society, the Korea-EU FTA has been a controversial issue. After the late 1990s, the ROK Government pushed ahead with neo-liberal policies, including joining the WTO regime and concluding FTAs. Ironically, the Korea-EU FTA has been recognised by Korean trade unions as an opportunity to demand the ratification of ILO Conventions C.87 and C.98, and indeed the Panel of Experts Report had a positive impact on Korea’s ratification of core conventions.

This presentation will discuss how the “fundamental labour rights and principles (FLRP)” which are incorporated into FTAs should be interpreted; who has authority on that and why; whether sustainability clauses would effectively improve FLRP mutually in parties of FTAs, and what conditions would be necessary for that; and most importantly, in what way trade unions and civil society organisations have a role in realising FLRP in the framework established by FTAs.

The EU-Korea FTA case represents a good chance to look at labour standards in the European Union and to verify the level of compliance with international labour standards. The questions emerging from the case concern the enforcement of collective rights, including particularly the rights of self-employed workers. In the EU, a large number of workers are still considered as “undertakings” for the purpose of the application of Article 101 TFEU, and such an interpretation, strongly supported by the CJEU, prevents them from exercising collective rights. And while the EU has not itself ratified the core conventions which are binding for all of its members, sustainability clauses in its FTAs commit also the EU to those very standards. The presentation accordingly aims to draw some conclusions on the possible impact of sustainability clauses in FTAs not only on the EU’s trade partners, but also on EU law and its interpretation.