Panel of experts confirms Korea is in breach of labour commitments under our trade agreement

This article is brought to you in association with the European Commission.

The panel report published today confirms the EU’s concerns that Korea has not acted consistently with its trade and sustainable development obligations under the EU-Korea trade agreement. The independent panel concluded that Korea needs to adjust its labour laws and practices and to continue swiftly the process of ratifying four fundamental International Labour Organization (ILO) Conventions in order to comply with the agreement.

Executive Vice-President and Commissioner for Trade, Valdis Dombrovskis, said: “This panel ruling shows the effectiveness of our cooperation-based approach to trade and sustainable development. We have closely engaged with our Korean partners for some years, and the panel of experts process led to concrete actions by Korea. We will be working closely with Korea to ensure it effectively implements commitments on workers’ rights.”

Findings of the panel

The panel of experts appointed by Korea and the EU established that Korea needs to adjust its labour laws and practices to comply with the principle of freedom of association.

The experts also agreed that the commitment to take steps towards the ratification of fundamental ILO Conventions requires ongoing and substantial efforts.

Finally, the panel confirmed the EU’s arguments that the two commitments at issue are legally binding and have to be respected regardless of their effect on trade.

Background of the panel

The dispute settlement procedure under the Trade and Sustainable Development Chapter of the EU-Korea trade agreement was initiated after previous efforts failed to provide a satisfactory solution.

In the EU-Korea trade agreement, both sides committed to respect international core labour rights and standards. This includes setting domestic legal guarantees to comply with the principles of the core labour standards as defined by the ILO, including the freedom of association. Commitments also include taking continued and sustained efforts towards ratifying the ILO fundamental conventions.

The EU considered that, since the entry into force of the agreement, the actions taken by Korea to implement these provisions remained insufficient. As a consequence, the EU requested a panel of experts to examine the matters that have not been satisfactorily addressed through government consultations.

The EU’s policy on trade and sustainable development

The EU has been stepping up its efforts to ensure that its trading partners fulfil the trade and sustainable development commitments included their trade agreements with the EU. This objective was also set out in the Commission’s 15-Point TSD Action Plan and has continued with the appointment of the Chief Trade Enforcement Officer and the announcement of the Single Entry Point where stakeholders can raise concerns as to implementation of these chapters.

The EU-Korea trade agreement is the EU’s first ‘new generation’ comprehensive trade agreement that includes a trade and sustainable development chapter, with a number of legally binding commitments on labour and environmental governance. Since then, all EU trade agreements contain such commitments, including the agreements in place with Canada, Japan, Singapore and Vietnam and the recently concluded negotiations with Mexico, Mercosur and the United Kingdom, as well as the investment deal with China.