This second phase of an arbitration procedure under the EU-Korea trade agreement is being triggered after formal government consultations held in January 2019 and more recent efforts failed to provide a satisfactory solution.
In the EU-Korea trade agreement, in place since 2011, both sides committed to respect international standards as regards workers’ rights. The commitments included the ratification and effective implementation of a number of fundamental conventions of the International Labour Organization (ILO), as well as setting domestic legal guarantees on the freedom of association and the right to collective bargaining. The EU considers that the actions taken by Korea to implement this part of the agreement remain insufficient.
Commissioner for Trade Cecilia Malmström said: “The EU-Korea trade agreement has produced large economic gains for both sides. Trade needs however to go hand in hand with workers’ rights. We agreed on that when we put the agreement in place in 2011. Despite some steps in the right direction, nine years later Korea has still not delivered on its commitments. Therefore, at this stage, we see no alternative than to ask for a panel, while of course remaining open to further dialogue to find a mutually agreed solution. This move shows the importance that the EU attaches to sustainable development in our trade agreements.”
The Commission recognises the efforts by Korea to pursue ratification of the four fundamental ILO conventions. That includes the recent announcement by the government of Korea to submit three out of four outstanding fundamental ILO Conventions for ratification in the National Assembly and to seek the adoption the necessary labour reforms in autumn this year. The EU continues to encourage the government of Korea to find the necessary domestic consensus to adapt Korean standards to the required international norms.
Since the outcome of the efforts by the Korean government remain uncertain, the Commission finds it appropriate to convene a panel of experts to examine the matters that have not been satisfactory addressed through government consultations. During panel proceedings, the Commission will remain open to continue looking for a mutually agreed solution to the dispute. If Korea does not comply with its commitments in a timely manner, the panel of experts will deliver a public report with recommendations on achieving compliance. The implementation of the recommendations of the panel report will then be monitored by the Trade and Sustainable Development Committee created under the terms of the EU-Korea trade agreement.
The European Commission closely monitors the implementation of trade commitments by EU partners and takes action, as necessary, to ensure that these commitments are respected.
Following discussions on implementation of the trade and sustainable development chapters in trade agreements, the EU has recently reinforced its monitoring efforts, as outlined in its revamped approach set out in the “15-Point Action Plan” on trade and sustainable development from February 2018.
The EU-Republic of Korea trade agreement, in place since 2011, was the first of the ‘new generation’ comprehensive trade agreements to include a trade and sustainable development chapter, with a number of labour and environmental commitments based on multilateral standards and agreements.
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