The inter-linkage of labour standards and trade rules has been a contentious one. Many FTAs already have provisions relating to labour standards in them.
I have blogged about it here, here and here.
However, disputes relating to labour standards have been few and far between even in the context of bilateral FTAs.
However, that is set to change. Two disputes have made a beginning.
The first one is a US-Guatemala labour dispute under the Dominican Republic-Central America-United States Free Trade Agreement (CAFTA-DR). The US formally launched the case in 2010 and alleged that treatment of Guatemalan workers was in violation of their labour rights, while also putting American workers at an unfair competitive disadvantage. The panel is this case decided in favour of Guatemala finding that the alleged failure of Guatemala to enforce labour legislation was not done in "a manner affecting trade".
The second dispute, a more recent one in 2019, is a panel request under the EU-Korea FTA this time is from the European Union against the Republic of Korea concerning certain measures, including provisions of the Korean Trade Union Act, which are alleged to be inconsistent with Korea’s obligations related to multilateral labour standards and agreements under the EU-Korea FTA. Further, non-ratification of ILO conventions have also been alleged to constitute a breach of Korea's obligations under the FTA.
While labour standards have been finding their way in trade rules for some time now, disputes regarding their implementation had not seen the light of day. While the two disputes are very different in character, it indicates how local labour law and enforcement can become the subject of some serious international adjudication.
Will these two disputes accelerate or hinder the proliferation of labour standards in future trade agreements is a debatable question.
I have blogged about it here, here and here.
However, disputes relating to labour standards have been few and far between even in the context of bilateral FTAs.
However, that is set to change. Two disputes have made a beginning.
The first one is a US-Guatemala labour dispute under the Dominican Republic-Central America-United States Free Trade Agreement (CAFTA-DR). The US formally launched the case in 2010 and alleged that treatment of Guatemalan workers was in violation of their labour rights, while also putting American workers at an unfair competitive disadvantage. The panel is this case decided in favour of Guatemala finding that the alleged failure of Guatemala to enforce labour legislation was not done in "a manner affecting trade".
The second dispute, a more recent one in 2019, is a panel request under the EU-Korea FTA this time is from the European Union against the Republic of Korea concerning certain measures, including provisions of the Korean Trade Union Act, which are alleged to be inconsistent with Korea’s obligations related to multilateral labour standards and agreements under the EU-Korea FTA. Further, non-ratification of ILO conventions have also been alleged to constitute a breach of Korea's obligations under the FTA.
While labour standards have been finding their way in trade rules for some time now, disputes regarding their implementation had not seen the light of day. While the two disputes are very different in character, it indicates how local labour law and enforcement can become the subject of some serious international adjudication.
Will these two disputes accelerate or hinder the proliferation of labour standards in future trade agreements is a debatable question.
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