Comparative study on labour provisions in ftas vietnam’s and thailand’s perspective

Development: the rise of FTAs and insertion of labour provisions in trade agreements

The post-war era marked a significant increase in trade and globalization, leading to concerns over the unequal distribution of benefits from economic liberalization To address the potential adverse effects on social conditions, various solutions have been proposed One effective approach is to connect trade policies with social standards, ensuring that trade liberalization is accompanied by decent labor conditions.

In the early 1990s, the connection between labor standards and trade emerged at the multilateral level, as the United States and other developed nations advocated for the inclusion of labor provisions within the World Trade Organization (WTO) legal framework.

An argument in support of such linkage consists of the need to set up minimum labour standards to compensate for the potential negative consequences of trade liberalization and

18 Franz C Ebert and Anne Posthuma, Labour provisions in trade arrangements: current trends and perspectives, Geneva: ILO, 2011, Lars Engen, Labour Provisions in Asia Pacific Free Trade Agreements, op.cit., 2017, ILO,

Handbook on assessment of labour provisions in trade and investment arrangements, op.cit., 2017

19 James Harrison, "The Labour Rights Agenda in Free Trade Agreements", Journal of World Investment and

Globalization and trade liberalization have heightened international competition, prompting countries to potentially lower their labor standards To combat this "race to the bottom," establishing a minimum set of labor standards at the multilateral level is essential for protecting workers' rights By including labor provisions in trade agreements, we can create a level playing field that discourages nations from undermining domestic labor regulations for competitive gain Additionally, linking international labor standards with trade can improve compliance, especially in light of the ILO's limited enforcement capabilities regarding its conventions.

Developing countries have opposed the linkage between labor standards and trade, perceiving it as a protectionist tactic that threatens their competitive edge due to lower labor costs Imposing external labor standards can raise labor costs and diminish the comparative advantage of these nations Additionally, trade sanctions for non-compliance with labor provisions may inadvertently harm workers in the affected sectors instead of offering protection Therefore, enhancing labor standards should stem from trade liberalization and economic growth rather than external mandates.

The 1996 Singapore Ministerial Declaration highlighted the failure to integrate labor standards into the WTO's multilateral framework, asserting that the International Labour Organization (ILO) is the appropriate authority for establishing and addressing these standards Furthermore, the Declaration explicitly dismissed the use of labor standards as a means of protectionism and emphasized the importance of preserving the comparative advantage of low-wage developing countries.

20 Anita Chan and Robert J S Ross, "Racing to the bottom: international trade without a social clause", Third

In "Exploring the Externalities of the Global ‘race-to-the-bottom’ in Labour Standards," Harman Shergill examines the detrimental effects of competitive deregulation in labor standards driven by free trade The article highlights how this race to the bottom compromises workers' rights and welfare, urging a shift towards fair trade practices Shergill advocates for policies that prioritize ethical labor standards to combat the negative externalities associated with globalization and ensure equitable treatment for workers worldwide.

4, 7, 45-59, Lars Engen, Labour Provisions in Asia Pacific Free Trade Agreements, op.cit., 2017, 5

22 Florence Arestoff-Izzo, Remi Bazillier, Damien Cremaschi, et al., The Use, Scope and Effectiveness of

Labour and Social Provisions and Sustainable Development Aspects in Bilateral and Regional Free Trade Agreements, 2008

24 Singapore Ministerial Declaration, adopted on 13 December 1996, WT/MIN(96)/DEC, 18 December 1996

Singapore Ministerial Declaration adopted on 13 December 1996

We reaffirm our commitment to internationally recognized core labor standards, with the International Labour Organization (ILO) as the authoritative body responsible for their establishment and promotion We believe that economic growth and development, driven by increased trade and trade liberalization, enhance these standards We reject the misuse of labor standards for protectionist motives and emphasize that the comparative advantage of countries, especially low-wage developing nations, should remain unquestioned Furthermore, we acknowledge the ongoing collaboration between the WTO and ILO Secretariats to support these objectives.

Although labor provisions have not been successfully integrated into a multilateral framework, developed nations, particularly the United States and the European Union, have unilaterally and through trade agreements connected trade to social conditionality.

Developed countries have integrated labor standards into their unilateral preference schemes, such as the Generalized System of Preferences (GSPs) These trade concessions granted to developing nations come with conditions related to human rights and labor standards Since 1984, the United States has mandated labor conditionality in its GSP, requiring candidate countries to demonstrate compliance with these standards to qualify for eligibility.

25 Lars Engen, Labour Provisions in Asia Pacific Free Trade Agreements, op.cit., 2017, 16

Since 1995, the EU has incorporated labor provisions into its Generalized Scheme of Preferences (GSP), allowing for the withdrawal of trade preferences in cases of serious violations of specified ILO Conventions Transitioning from a purely sanctions-based strategy, the EU adopted a "carrot and stick" approach in 1998, introducing special incentives through the GSP+ As of 2005, the ratification and effective implementation of the ILO Declaration on Fundamental Principles and Rights at Work and all fundamental ILO Conventions have become mandatory for eligible countries.

The connection between labor standards and trade has been strengthened through free trade agreements, particularly as progress in the Doha round negotiations under the WTO has stalled This impasse has resulted in an increase in bilateral (BTAs) and regional trade agreements (RTAs), with 568 agreements notified to the WTO and 350 currently in effect as of October 2021.

26 Franz C Ebert and Anne Posthuma, Labour provisions in trade arrangements: current trends and perspectives, op.cit., 2011, 7

Tonia Novitz explores the relationship between the European Union and the International Labour Organization in her work, highlighting the dynamics of their dialogue This interaction is framed within the broader context of labour rights as fundamental human rights, as discussed in the edited volume by Phillip Alston, published by Oxford University Press.

28 ILO, Assessment of labour provisions in trade and investment arrangements, Geneva: ILO, 2016, 20

29 WTO, "Figures on Regional Trade Agreements notified to the GATT/WTO and in force"(online), 12 October

2021, http://rtais.wto.org/UI/publicsummarytable.aspx

Figure 1 Regional Trade Agreements notified and in force

In the WTO multilateral forum, developing countries can collectively challenge developed nations' attempts to connect labor standards with trade However, in bilateral or regional negotiations, developed countries hold a stronger position to demand the inclusion of labor provisions in trade agreements in exchange for trade benefits or concessions.

The 1994 North American Free Trade Agreement (NAFTA), concluded between the

The North American Free Trade Agreement (NAFTA) was the first trade agreement among the US, Canada, and Mexico to incorporate labor standards through its labor supplement, the North American Agreement on Labor Cooperation (NALLC) Since its inception, there has been a notable rise in free trade agreements (FTAs) that include labor provisions, either within the main agreement or as a supplementary agreement Initially, only four trade agreements featured labor provisions, highlighting the growing emphasis on labor rights in international trade.

Since 1995, the number of trade agreements with labor provisions has significantly risen, reaching 21 in 2005 and expanding to 77 agreements covering 136 economies by 2016 Notably, around two-thirds of these agreements were established post-2008, indicating that the global financial crisis underscored the necessity for improved redistribution in globalization.

30 United States Department of Labor, "North American Agreement on Labor Cooperation: A Guide"(online), October 2005, 12 October 2021, https://www.dol.gov/agencies/ilab/trade/agreements/naalcgd

31 ILO, Assessment of labour provisions in trade and investment arrangements, op.cit., 2016, 1, ILO, Handbook on assessment of labour provisions in trade and investment arrangements, op.cit., 2017, 2

Structure of trade-related labour provisions

The ILO defines “labour provisions” as “any standard which addresses labour relations or minimum working terms or conditions, mechanisms for monitoring or promoting compliance, and/or a framework for cooperation” 33

Trade-related labour provisions are diverse but generally focus on three key elements: establishing standards for minimum working conditions, including occupational safety, hours of work, and minimum wages; outlining mechanisms to promote compliance with these standards; and creating a framework for cooperation, dialogue, and monitoring.

1.2.1 Substantive labour provisions: labour standards and commitments

Labour provisions generally refer to three main sets of standards which are 1) international labour standards 2) mutually-agreed labour standards and 3) domestic labour laws 35

Most labor provisions in trade agreements are aligned with international labor standards established by the International Labour Organization (ILO) Key references include the 1998 ILO Declaration on fundamental principles and rights at work and the 2006 United Nations ECOSOC Ministerial Declaration, which emphasizes the importance of generating full and productive employment and ensuring decent work for all.

32 ILO, Handbook on assessment of labour provisions in trade and investment arrangements, op.cit., 2017, 12

35 Lars Engen, Labour Provisions in Asia Pacific Free Trade Agreements, op.cit., 2017, 18-21

36 ILO Declaration on fundamental principles and rights at work and its follow-up, adopted by the International Labour Conference at its 86 th Session, Geneva, 18 June 1998, (Annex revised 15 June 2010)

37 United Nations ECOSOC Ministerial declaration on generating full and productive employment and decent work for all, adopted in Geneva, 5 July 2006

18 and the 2008 ILO Declaration on social justice for a fair globalization 38 (hereinafter 2008 ILO Declaration)

The 1998 ILO Declaration on fundamental principles and rights at work is a key reference for trade-related labor provisions, mandating all ILO member countries to uphold essential rights known as Core Labour Standards (CLS) These CLS include: (1) the freedom of association and the recognition of collective bargaining rights; (2) the elimination of forced or compulsory labor; (3) the effective abolition of child labor; and (4) the eradication of discrimination in employment and occupation.

The Core Labor Standards (CLS) are established in eight fundamental International Labour Organization (ILO) Conventions, which include: 1) the right to freedom of association and collective bargaining (ILO Conventions No 87 and No 98), and 2) the eradication of all forms of forced or compulsory labor (ILO Conventions No 29 and No 105).

3) the effective abolition of child labour (ILO Convention No.138 and No.182) 4) the elimination of discrimination in respect of employment and occupation (ILO Convention No.100 and No.111)

The main contribution of the 1998 ILO Declaration is that it obliges the ILO members

It is essential to uphold, advocate for, and effectively implement the principles of fundamental rights outlined in the ILO core Conventions, in good faith and in alignment with the Constitution, regardless of whether those Conventions have been ratified.

The 1998 ILO Declaration, similar to the WTO 1996 Ministerial Declaration, underscores that labor standards must not serve as a tool for protectionist trade practices Furthermore, it clarifies that the Declaration and its subsequent actions should not challenge the comparative advantage of any nation.

The 2006 United Nations ECOSOC Ministerial declaration emphasizes the UN's dedication to achieving full and productive employment, as well as decent work for all, aligning these objectives with the Millennium Development Goals.

38 ILO Declaration on Social Justice for a Fair Globalization, adopted by the International Labour Conference at its 97 th Session, Geneva, 10 June 2008

39 Article 2, ILO Declaration on fundamental principles and rights at work and its follow-up, adopted by the International Labour Conference at its 86th Session, Geneva, 18 June 1998, (Annex revised 15 June 2010)

40 Article 5, ILO Declaration on fundamental principles and rights at work and its follow-up, adopted by the International Labour Conference at its 86th Session, Geneva, 18 June 1998, (Annex revised 15 June 2010)

The 2006 ECOSOC Declaration emphasizes the fundamental principles and rights at work outlined in the 1998 ILO Declaration, while urging the ratification and comprehensive implementation of both core and supplementary ILO Conventions.

The 2008 ILO Declaration on Social Justice for Fair Globalization builds on the Philadelphia Declaration of 1944 and the 1998 Declaration on Fundamental Principles and Rights at Work, emphasizing the universality of the Decent Work Agenda It mandates all ILO members to implement policies centered on four strategic objectives: promoting employment, enhancing social protection measures, fostering social dialogue and tripartism, and upholding the fundamental principles and rights at work.

The EU-South Korea Free Trade Agreement goes beyond traditional core labor standards by requiring parties to ratify and implement all International Labour Organization (ILO) conventions deemed current.

Labour provisions establish commitments related to labour standards by outlining the responsibilities of involved parties These commitments may include aligning domestic labour laws with established standards, progressively enhancing the protection offered by national labour laws, enforcing existing regulations, and ensuring that current labour standards are not diminished to attract trade and investment.

Labour provisions can address trade-related labour issues between trading partners, but they may also encompass all labour matters within and between the parties, regardless of their connection to trade.

41 Article 5, United Nations ECOSOC Ministerial declaration on generating full and productive employment and decent work for all, adopted in Geneva, 5 July 2006

42 Scope and principles, A, ILO Declaration on Social Justice for a Fair Globalization, adopted by the

International Labour Conference at its 97 th Session, Geneva, 10 June 2008

43 Article 13.4, EU- South Korea Free Trade Agreement

Labour provisions can differ significantly in how commitments are established In certain instances, these provisions may only reaffirm existing commitments and obligations outlined in international instruments like ILO Conventions or Declarations, without imposing additional legal responsibilities on the parties involved Conversely, there are situations where labour provisions create legally binding commitments that reference international labour standards, thereby obligating the parties to adhere to these standards.

“best endeavours” approach, parties to the agreements are required to “strive to ensure” compliance with the standard Another approach is more demanding and oblige the parties to

“provide for” i.e., to comply with labour standards as set out in international labour standards 45

It is important to note that the legal implication of commitments is also influenced by the mechanism chosen to ensure/promote compliance with the labour standards

Trade agreements sometimes refer to mutually agreed labour standards instead of international labour standards, despite their potential overlap This approach is typically taken in specific situations: when agreements were made before the 1998 ILO Declaration, when one party is not an ILO member (like Taiwan), when certain core labour standards are intentionally excluded, or when additional protections, such as those for migrant workers, are desired.

Trade-related labour provisions often focus on the enforcement of existing domestic labour laws, which may not necessarily enhance labour standards in line with international norms Typically, these provisions reference domestic laws while also incorporating international or mutually agreed-upon labour standards, resulting in a dual approach to labour regulation.

45 Ibid., 20, Jordi Agustí-Panareda, Franz Christian Ebert and Desirée LeClercq, Labour Provisions in Free

Trade Agreements: Fostering their Consistency with the ILO Standards System, Geneva: ILO, 2014, 11

1.2.2 Mechanism to ensure/promote compliance with labour provisions

Impacts of labour provisions on the improvement of labour conditions

Research on the impacts of labor provisions in Free Trade Agreements (FTAs) presents varying conclusions Some experts argue that the inclusion of labor rights, such as freedom of association and collective bargaining, has not led to improvements and may even have worsened conditions Conversely, others suggest that these provisions positively influence the labor market, particularly increasing women's participation due to enhanced decent working standards and anti-discrimination measures However, some experts view the effects of labor provisions as limited, considering them a minor addition to trade agreements Significant changes in working conditions are infrequent, as the process involves multiple complex steps, including the ratification of ILO conventions, the internalization of labor standards, capacity building, implementation, and ultimately, the enhancement of labor rights and working conditions.

It should be noted that assessing the impact of labour provisions on the improvement of labour rights and working conditions in the member countries is not without complication

62 Axel Marx and Jadir Soares, Does integrating labour provisions in free trade agreements make a difference?

An exploratory analysis of freedom of association and collective bargaining rights in 13 EU trade partners, in

Global governance through trade, EU policies and approaches Jan Wouters, Axel Marx, Dylan Geraets, et al.,

63 ILO, Assessment of labour provisions in trade and investment arrangements, op.cit., 2016, 5

64 Martin Myant, Impacts of trade and investment on decent work and sustainable development, Brussels: ETUI aisbl, 2017, 57

The relationship between the integration of labor provisions in Free Trade Agreements (FTAs) and the enhancement of labor rights and working conditions is intricate, influenced by various factors beyond just the provisions themselves, including domestic labor laws, market dynamics, management choices, cultural aspects, technological capabilities, and political priorities Additionally, the effects of labor provisions on working conditions tend to manifest indirectly and require a significant amount of time to become evident Research by Axel Marx and Jadis Soares highlights a notable discrepancy between the labor rights enshrined in law and their actual implementation across 13 EU trade partners, revealing that legal protections are often more stringent on paper than in practice This gap can be attributed to several factors: the inability of states to effectively manage and monitor these provisions, inadequate implementation mechanisms in certain countries, and the realization that labor rights protection relies on a combination of legal frameworks, political regimes, trade policies, and governmental roles.

Experts find it challenging to evaluate the effects of labor provisions in Free Trade Agreements (FTAs) due to several factors: the impacts often take time to manifest, these provisions are only one of numerous factors influencing working conditions, and their overall effects may be relatively minor.

Incorporating labor standards into trade agreements may not fully resolve issues related to labor rights, but it establishes a foundational level of standards that can empower workers and civil society organizations to advocate for improvements in developing countries Although labor provisions in free trade agreements (FTAs) may be minimal and yield only slight positive effects, they represent a significant step towards enhancing labor rights protection Despite criticism from Axel Marx and Jadir Soares regarding the disparity between legal protections and actual conditions, the inclusion of these provisions is still a commendable advancement.

65 ILO, Assessment of labour provisions in trade and investment arrangements, op.cit., 2016, 72-76

Global governance through trade, EU policies and approaches, 172-177; Martin Myant, Impacts of trade and investment on decent work and sustainable development, op.cit., 2017, 57

The correlation between legal protection and practical protection shows a consistent trend, with both demonstrating similar patterns in direction and strength This indicates that improvements in legal protections lead to corresponding advancements in practical protections, despite existing gaps.

Global governance through trade, EU policies and approaches, 174

Labour provisions in the CPTPP

Following the U.S withdrawal from the Trans-Pacific Partnership (TPP), the remaining eleven member countries chose to proceed with cooperation under the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) They agreed to eliminate certain contentious intellectual property provisions initially sought by the U.S., while maintaining the essential components of the agreement, including the Labour Chapter.

The TPP agreement served as a key geopolitical strategy for the US in the Asia Pacific, highlighting America's significant influence in shaping its rules An analysis of the TPP texts reveals that they closely mirror previous trade agreements established by TPP member countries, particularly those involving the US Notably, the TPP Labour chapter replicates 51% of the text found in the USA-South Korea trade agreements.

The initial labor provisions in U.S trade agreements were introduced through a labor side agreement that accompanied the North American Free Trade Agreement (NAFTA) established in 1994 with Canada and Mexico This approach was subsequently adopted in Free Trade Agreements (FTAs) with countries such as Australia, Bahrain, Central America/Dominican Republic, Chile, Jordan, Morocco, and Oman.

68 Todd Allee and Andrew Lugg, "Who wrote the rules for the Trans-Pacific Partnership?", Research and

Singapore's first-generation labor provisions emphasized the importance of enforcing domestic labor laws to avoid impacting trade between parties During this period, US trade agreements referenced the 1998 ILO Declaration but adopted a non-binding approach The North American Labor Law Conference (NALLC), part of the NAFTA framework, required parties to uphold their domestic labor laws, yet its enforcement mechanisms proved to be ineffective.

The May 10th agreement, adopted by Congress in 2007, marked a significant shift in US trade-related labor protection policy by implementing stricter second-generation labor provisions These provisions mandate that US trade partners incorporate the fundamental labor standards outlined in the 1998 ILO Declaration into their domestic laws and refrain from weakening regulations that uphold international labor standards Additionally, the agreement ensures that labor disputes are addressed through the same settlement procedures as trade disputes, meaning violations of labor provisions could result in trade sanctions This framework was integrated into US trade agreements with Colombia, Korea, Panama, and Peru.

To address concerns from Trade Unions and NGOs regarding potential negative impacts of trade liberalization on working conditions and labor rights, the TPP includes a comprehensive Labour Chapter (Chapter 19) The US Trade Representative (USTR) has described this chapter as providing “the strongest protections for workers of any trade agreement in history.” It represents an “enhanced second generation” of labor provisions compared to previous US FTAs, aiming to promote and enforce internationally recognized labor standards within the domestic legal frameworks of member countries, in alignment with their obligations as ILO member parties.

Concerning the substance of labour provisions, the TPP-CPTPP Labour Chapter requires all participating countries to “adopt and maintain the rights as set out in the 1998 ILO

70 Steve Charnovitz, An Appraisal of the Labor Chapter of the Trans-Pacific Partnership: Remarks Submitted to the Committee on Ways and Means Democrats, January 2016, 1

71 Álvaro Santos, The Lessons of TPP and the Future of Labor Chapters in Trade Agreements, in

Megaregulation Contested: Global Economic Ordering After TPP Benedict Kingsbury, David M Malone,

72 Steve Charnovitz, An Appraisal of the Labor Chapter of the Trans-Pacific Partnership, op.cit., January 2016

73 Office of the Trade Representative of the United States (USTR), "TPP Chapter Summary Labour"(online), n.d., 26 october 2021, https://ustr.gov/sites/default/files/TPP-Chapter-Summary-Labour-1.pdf

74 Steve Charnovitz, An Appraisal of the Labor Chapter of the Trans-Pacific Partnership, op.cit., January 2016,

The Declaration on Fundamental Principles and Rights at Work emphasizes four key rights: the freedom of association and collective bargaining, the elimination of forced or compulsory labor, the effective abolition of child labor, and the elimination of discrimination in employment and occupation The CPTPP references the ILO’s 1998 Declaration rather than the eight core ILO Conventions that detail these fundamental rights While CPTPP members can choose to ratify ILO Conventions, they are obligated to uphold the principles outlined in the Fundamental Conventions.

The CPTPP Labour Chapter contains new substantive commitments, in comparison with previous labour provisions of the US, including

1) the obligation of the parties to adopt and maintain laws concerning acceptable conditions of work concerning minimum wages, hours of work and occupational safety and health 76

2) the obligation not to waive or derogate from minimum wages, hours of work, or occupational health and safety standards in special trade or customs areas such as export processing zones or foreign trade zones 77

3) the obligation to discourage importation of goods or goods containing inputs made by forced or compulsory labour, regardless of country of origin 78

4) the endeavour to encourage enterprises to voluntarily adopt corporate social responsibility initiatives 79

The CPTPP mandates that member countries must adopt and uphold laws related to acceptable working conditions, including minimum wages, working hours, and occupational safety and health, rather than merely enforcing existing regulations This emphasizes the importance of precise obligations regarding labor standards within the agreement.

The obligation to adhere to certain standards is confined to levels agreed upon by the parties involved This allows for the possibility of adopting lower standards to meet requirements However, the commitment to uphold minimum wage, working hours, and occupational health and safety standards is restricted to specific trade areas, such as export processing zones or foreign trade zones, leaving a significant number of workers outside these zones without protection.

The CPTPP members are committed to strengthening cooperation and consultation on labor issues, as outlined in the Labour Chapter This chapter establishes a Labour Council, consisting of representatives from each member country, tasked with addressing matters related to labor, promoting public participation, and ensuring effective implementation of the chapter's provisions.

The Labour Chapter features two mechanisms for resolving conflicts between member parties regarding labor issues The first mechanism is a cooperative labor dialogue, which allows one party to formally request a discussion with another party on any relevant matter This dialogue is expected to begin within 30 days of the request Potential outcomes of the dialogue may include the creation and execution of an action plan, independent verification of compliance by a mutually agreed-upon entity, or collaborative programs aimed at enhancing the capacity of the parties to effectively address labor concerns.

The second option involves utilizing the general dispute settlement chapter, starting with a labor consultation mechanism between the parties If the issue remains unresolved after consultations, the requesting party may seek the establishment of a panel within 60 days of their initial request This panel, operating under the Agreement’s dispute settlement procedures, has the authority to impose trade sanctions if it confirms that the other party is non-compliant.

The obligation outlined in Footnote 5 to Article 19.3.2 of the CPTPP emphasizes that each Party must define acceptable working conditions within its own statutes, regulations, and practices.

81 Álvaro Santos, The Lessons of TPP and the Future of Labor Chapters in Trade Agreements, in

Megaregulation Contested: Global Economic Ordering After TPP, 13-14

In addition to the TPP-CPTPP Labour Chapter, the United States established bilateral Labour Consistency Plans with Brunei and Malaysia, as well as a Plan for the Enhancement of Trade and Labour Relations with Viet Nam While these agreements are bilateral, they impose obligations primarily on the US trade partners The Labour Consistency Plans mandate that these countries implement domestic legal reforms before the TPP Agreement takes effect or within a specified timeline Furthermore, these plans are subject to the dispute settlement mechanism outlined in the TPP Agreement.

Labour provisions in the EU FTA model

Following the unsuccessful effort to connect trade and labor standards at the multilateral level, the EU has increasingly relied on unilateral Generalized System of Preferences and trade agreements as key mechanisms to enhance labor standards.

In its 2002 Communication “Towards a Global Partnership for Sustainable Development,” the European Commission emphasized the importance of integrating sustainable policies into the EU's external relations The EU is committed to ensuring that globalization supports sustainable development through targeted actions.

Strengthening the sustainability aspect of bilateral and regional agreements is essential by incorporating a commitment to sustainable development and facilitating dialogue for the exchange of best practices Since the Treaty of Lisbon, there has been a focus on promoting sustainable economic and social growth.

84 Communication COM(2002)82 of 13 February 2002 "Towards a global partnership for sustainable development"

The EU's external policy objectives include 32 environmental figures, emphasizing the integration of sustainability into trade practices The 2015 Trade for All Communication underscored the importance of leveraging the trade agenda to advance the social and environmental dimensions of sustainable development.

The CARIFORUM Economic Partnership Agreement (EPA), finalized in 2008, represents a significant advancement in the EU's strategy to enhance labor standards through trade This agreement encompasses a broader range of social policy norms and core labor standards, facilitating the resolution of social disputes by independent experts and establishing a civil society mechanism.

The EU-Korea FTA, which has been provisionally applied since 2011 and ratified in 2015, marked a significant milestone in the trade-labour linkage within EU Free Trade Agreements (FTAs) As the first of the "new generation FTAs," it introduced a Trade and Sustainable Development (TSD) Chapter that addresses both labor and environmental issues Following this precedent, subsequent EU FTAs consistently include a TSD chapter aimed at promoting sustainable development and maximizing the benefits of increased trade and investment for decent work and environmental protection.

The TSD Chapter in EU trade agreements includes essential provisions that address both substantive labor standards and procedural mechanisms for resolving labor disputes, ensuring effective adaptation and compliance.

The TSD Chapter mandates that the parties adhere to the core labor standards outlined in the 1998 ILO Declaration and actively promote the decent work agenda Specifically, they are required to "respect, promote, and realize" fundamental labor rights, including the freedom of association and the right to organize.

85 Article 21 Treaty of the European Union (TEU)

86 Communication COM(2015)497 of 14 October 2015 "Trade for All: Towards a more responsible trade and investment policy"

87 James Harrison, Mirela Barbu, Liam Campling, et al., "Governing Labour Standards through Free Trade Agreements: Limits of the European Union’s Trade and Sustainable Development Chapters", Journal of

88 https://ec.europa.eu/trade/policy/countries-and-regions/countries/south-korea/

89 European Commission, The EU-Korea Free Trade Agreement in practice, Luxembourg: Publications Office of the European Union, 2011

90 Communication COM(2015)497 of 14 October 2015 "Trade for All: Towards a more responsible trade and investment policy", p.16

33 collective bargaining 2) the elimination of all forms of forced or compulsory labour 3) the effective abolition of child labour 4) the elimination of discrimination in respect of employment and occupation

The Parties are dedicated to the effective implementation of the ILO Conventions they have ratified and are committed to making ongoing efforts to ratify the fundamental ILO Conventions and other Conventions deemed 'up-to-date' by the ILO.

The TSD Chapter emphasizes the importance of not using labor standards for disguised protectionism, ensuring the protection of labor rights, and maintaining domestic laws without weakening or waiving them to promote trade and investment.

The TSD Chapter of the EU-Mercosur FTA advances beyond prior EU FTAs by emphasizing the necessity for the ratification and effective implementation of the 2014 Protocol to the Forced Labour Convention It also promotes decent work in line with the 2008 Declaration on Social Justice for a Fair Globalization, addressing critical issues such as occupational safety and health, compensation for work-related injuries or illnesses, fair wages, and equitable working conditions, including non-discrimination for migrant workers.

The TSD Chapter outlines procedural commitments that facilitate dialogue and cooperation between the EU and its trading partners, along with mechanisms for monitoring the sustainability impact of agreements It establishes three main institutions, including the Committee on Trade and Sustainable Development, which comprises representatives from both parties and is responsible for overseeing the implementation of the TSD Chapter Additionally, the chapter mandates the creation of Domestic Advisory Groups (DAGs) by each party, incorporating input from businesses, trade unions, and NGOs to enhance civil society participation.

91 Article 13.4 EU-Korea FTA, Multilateral labour standards and agreements, Official Journal of the European Union, L 127, 14 May 2011

92 The text of the Agreement published for information purposes following the agreement announced in June

2019 and susceptible further modifications, European Commission, "EU-Mercosur trade agreement: The

Agreement in Principle and its texts"(online), July 2021, 2 January 2022, http://trade.ec.europa.eu/doclib/html/158166.htm

93 James Harrison, et al., "Governing Labour Standards through Free Trade Agreements: Limits of the European Union’s Trade and Sustainable Development Chapters", 260–277, 261

The DAGs are allowed to submit their views and recommendations regarding the implementation of the TSD Chapter to their respective parties Additionally, the Committee on Trade and Sustainable Development is responsible for establishing a Panel of independent experts in labor and environmental law This Panel is tasked with investigating complaints related to social issues raised by the parties and providing recommendations.

The EU Free Trade Agreements (FTAs) address labor disputes separately from general dispute settlement procedures, adopting a soft approach that encourages collaboration through government consultations In the event of a conflict, the Trade and Sustainable Development (TSD) Chapter enables parties to seek resolution from the Committee on Trade and Sustainable Development If a satisfactory resolution is not reached within a specified timeframe, a party can request a Panel of Experts to investigate the issue and provide a report Following this, the parties engage in discussions to determine appropriate actions based on the Panel's recommendations, with the Committee on Trade and Sustainable Development overseeing the implementation process and allowing Domestic Advisory Groups (DAGs) to submit observations.

The CPTPP Labour Chapter and the EU FTAs’ TSD Chapters in comparison

The CPTPP and EU FTA are advanced free trade agreements that establish elevated trade standards and tackle non-trade issues, exceeding the commitments made in the multilateral framework They encompass critical areas such as intellectual property, public procurement, competition law, labor standards, and environmental protection, positioning these agreements as "WTO-plus" initiatives.

This research analyzes the labor provisions outlined in the CPTPP Labour Chapter and the Trade and Sustainable Development (TSD) Chapter of EU Free Trade Agreements (FTAs), specifically examining the EU-Korea FTA, EU-Singapore FTA, and EU-Vietnam FTA.

94 James Harrison, "The Labour Rights Agenda in Free Trade Agreements", 705-725

95 James Harrison, et al., "Governing Labour Standards through Free Trade Agreements: Limits of the European Union’s Trade and Sustainable Development Chapters", 260–277, 262

96 James Harrison, "The Labour Rights Agenda in Free Trade Agreements", 705-725, Areg Navasartian, "EU-Vietnam Free Trade Agreement: Insights on the Substantial and Procedural Guarantees for Labour Protection in Vietnam", 561-571, 568-569

Aforementioned labour provisions are classified into two main categories: 1) Substantive labour provisions; 2) Procedural and institutional labour provisions which also include dispute settlement mechanisms

Substantive labour provisions focus on the essential labour standards and commitments of the Parties, while procedural and institutional provisions ensure the effective implementation of these standards These procedural elements include obligations related to transparency, monitoring, cooperation, and dispute resolution mechanisms A comparative analysis of their labour provisions is presented in the table below.

Table 1 Comparison of the labour provisions in the CPTPP Labour Chapter and the EU FTAs’ TSD Chapter

CPTPP LABOUR CHAPTER EU FTA’S TSD CHAPTER SUBSTANTIVE LABOUR PROVISIONS

Reaffirm obligations as members of the ILO 97

Labour standards should not be used for protectionist trade purposes 98

Reaffirm commitment to contribute to sustainable development in promotion of trades 99

Violation of fundamental principles and rights at work cannot be invoked or used as a legitimate comparative advantage

Labour standards should not be used for protectionist trade purposes 100

Obligation to adopt and maintain in domestic laws and practices the four fundamental rights as stated

Obligation to respect, promote and implement in the laws and practices the principles

97 Article 19.2 of the CPTPP (Statement of Shared Commitment)

98 Article 19.2 of the CPTPP (Statement of Shared Commitment)

99 Article 13.1.1 EU-Korea FTA, Article 12.1 EU-Singapore FTA, Article 13.1.2 EU-Vietnam FTA

CPTPP LABOUR CHAPTER EU FTA’S TSD CHAPTER in the 1998 ILO Declaration on

Fundamental Principles and Rights at Work and its Follow-up

(a) freedom of association and the effective recognition of the right to collective bargaining;

(b) the elimination of all forms of forced or compulsory labour;

(c) the effective abolition of child labour and, a prohibition on the worst forms of child labour; and

(d) the elimination of discrimination in respect of employment and occupation

Adopt and maintain laws governing acceptable conditions of work with respect to minimum wages, hours of work, and occupational safety and health, in export processing zones (EPZ) 101

Discourage the importation of goods produced by forced or compulsory labour, including forced or compulsory child labour 102 concerning the fundamental rights as stated in the 1998 ILO

Declaration on Fundamental Principles and Rights at Work and its Follow-up

(a) the freedom of association and the effective recognition of the right to collective bargaining;

(b) the elimination of all forms of forced or compulsory labour;

(c) the effective abolition of child labour; and

(d) the elimination of discrimination in respect of employment and occupation 103

101 Article 19.3.2 and 19.4.b of the CPTPP (Labour Rights and Non Derogation)

102 Article 19.6 of the CPTPP (Forced or Compulsory Labour)

103 Article 13.4 EU-Korea FTA, Article 12.3 EU-Singapore FTA, Article 13.4 EU-Vietnam FTA

CPTPP LABOUR CHAPTER EU FTA’S TSD CHAPTER

None Make continued and sustained efforts towards

- Effectively implementing the ratified ILO conventions

- Ratifying the ILO fundamental Conventions 104

Upholding the level of labour protection

Not fail to effectively enforce labour laws through a sustained or recurring course of action or inaction in a manner affecting trade or investment between the parties 105

Not to encourage trade or investment by weakening or reducing the protections afforded in each party’s labour laws 106

To ensure fair trade and investment between parties, it is crucial to consistently and effectively enforce labor laws A lack of enforcement resources cannot be used as an excuse for inaction in this regard.

To promote trade and investment between the Parties, it is crucial not to weaken or diminish domestic labor protections This includes refraining from waiving, offering to waive, or derogating from existing laws, regulations, or standards that could impact trade or investment.

The EU-Korea Free Trade Agreement (FTA) mandates both parties to consistently strive for the ratification of essential International Labour Organization (ILO) Conventions, including those deemed 'up-to-date' by the ILO, as outlined in Article 13.4.3.

EU-Singapore FTA states that “the Parties will also consider the ratification and effective implementation of other ILO conventions, taking into account domestic circumstances” (Article 12.3.4)

EU-Vietnam FTA specifies that “Each Party shall make continued and sustained efforts towards ratifying the fundamental ILO Conventions” (Article 13.4.3)

105 Article 19.5 of the CPTPP (Enforcement of Labour Laws)

106 Article 19.4 of the CPTPP (Non Derogation)

107 Article 13.7.1 EU-Korea FTA, Article 12.12.2 EU-Singapore FTA, Article 13.3.3 EU-Vietnam FTA

108 Article 13.7.2 EU-Korea FTA, Article 12.12.1 EU-Singapore FTA, Article 13.3.2 EU-Vietnam FTA

Encourage enterprises to voluntarily adopt corporate social responsibility initiatives on labour issues 109

Facilitate and promote trade and investment contributing to sustainable development involving corporate social responsibility and accountability 110

Collaboration on labor and related issues involves various activities such as workshops, seminars, and dialogues, as well as study trips and research studies aimed at documenting policies and practices This cooperative approach includes collaborative research and development to identify best practices, along with specific exchanges of technical expertise and assistance.

Cooperation on trade-related labor policies is essential for fostering international dialogue and sharing best practices This includes promoting the ratification of ILO fundamental conventions and addressing the trade impact of labor regulations, norms, and standards within the framework of the ILO Decent Work Agenda Engaging in information exchange and collaborative efforts in international forums enhances the effectiveness of these initiatives.

Establishment of a Labour Council, composed of senior governmental representatives to consider matters related to the labour chapter, to establish priorities for cooperation and capacity building activities 112

Establishment of Committee on Trade and Sustainable Development, composed of senior officials of the parties, to oversee the implementation of the TSD Chapter

109 Article 19.7 of the CPTPP (Corporate Social Responsibility)

111 Article 19.10 of the CPTPP (Cooperation)

112 Article 19.12 of the CPTPP (Labour Council)

Establishment of Domestic Advisory Group (DAG) on sustainable development, comprising employers' and workers' organisations, and non- governmental organisations, to advise on the implementation of the TSD Chapter

The Monitoring Labour Council is responsible for setting and reviewing priorities to enhance labor cooperation and capacity-building initiatives It oversees and evaluates the overall work program and assesses reports from designated contact points.

Review of the implementation of the Labour Chapter during the 5 th year 113

Committee on Trade and Sustainable Development oversees the implementation of the TSD Chapter 114

Raising public awareness of labor laws is essential for fostering a fair workplace environment It is crucial to guarantee access to impartial and independent tribunals for the enforcement of these laws Additionally, ensuring that administrative and judicial proceedings are fair, equitable, and transparent is vital for upholding due process.

Ensure the development and administration of measures protecting labour conditions that may affect trade and investment between the parties, in a transparent manner and with due notice and opportunities for

113 Article 19.12 of the CPTPP (Labour Council)

114 Article 13.10, 13.12 EU-Korea FTA, Article 12.14,12.15 EU-Singapore FTA, Article 13.13, 13.15 EU-

The CPTPP Labour Chapter and the EU FTA’s TSD Chapter emphasize the importance of adhering to labor laws and ensuring effective remedies for any violations They guarantee the right to seek review or appeal, alongside the robust enforcement of final decisions, to uphold labor rights and standards.

Public submissions are encouraged through designated contact points, allowing individuals to submit written feedback regarding the labor chapter It is essential to consider these submissions carefully and provide timely responses to all interested parties who share their views.

Cooperative labor dialogue allows one party to formally request written discussions with another party to address labor-related issues This process can lead to various outcomes, such as the creation and execution of an action plan, independent verification of compliance by a mutually agreed-upon entity, or the establishment of cooperative programs aimed at capacity building to support the involved parties in their dialogue efforts.

Government consultations – possibility to request a consultation, to request the Committee on TSD to consider the differences, possibility to seek advice from the ILO 119

115 Article 19.8 of the CPTPP (Public Awareness and Procedural Guarantees)

116 Article 19.9 of the CPTPP (Public Submissions)

CPTPP LABOUR CHAPTER EU FTA’S TSD CHAPTER identify and address labour matters 118

Labour consultations and establishment of Panel under the general dispute settlement mechanism 120 – A Party may request labour consultations with another Party regarding any matter arising under this Chapter

If the consulting parties cannot reach an agreement, the requesting party may seek the formation of a panel under the Agreement’s dispute settlement procedures within 60 days of their initial consultation request This panel can impose trade sanctions if it determines that there has been a failure to comply with obligations outlined in the Chapter.

In the event of an unsuccessful consultation, parties have the option to submit their differences to a Panel of Experts, which will provide a report on the implementation of the Trade and Sustainable Development (TSD) Chapter The involved parties are encouraged to make every effort to adhere to the Panel's recommendations Additionally, the Committee on Trade and Sustainable Development is responsible for overseeing the implementation of the Panel's report and its recommendations.

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