[WTO and International Trade Case Review Series No. 42] Korea – Labor Commitments: Impact of labor clauses in the free trade agreement

The place for discussion regarding the relationship between trade and labor is gradually shifting from the World Trade Organization (WTO) to free trade agreements (FTAs). Different from the previous theoretical discussions under the WTO, recent discussions in FTAs entail concrete disputes. Among those disputes, Korea – Labor Commitments is a landmark case. The Panel of Experts found that some provisions in the Korea’s trade union law infringed the provision (Article 13.4 EU-Korea FTA) that requires parties to respect the principles of the International Labour Organization (ILO). On the other hand, the Panel rejected the complaint that Korea is not showing sufficient effort to ratify the core ILO Conventions. The case was prominent in that the issues discussed in the dispute had tenuous relationship with trade. The success in bringing the case into FTA dispute settlement mechanism may enhance the possibility that similar “domestic” labor issues will be addressed in FTA mechanisms. In addition, the case was also notable in the sense of excellent implementation of panel’s recommendation. Nevertheless, the EU is reinforcing the implementation power of labor clauses in new FTAs. Korea – Labor Commitments is an essential case in considering the development of labor clauses in trade agreements.

* The series name has been changed from [WTO Case Review Series] to [WTO and International Trade Case Review Series]