The EU-Korea Panel Ruling and the Evolution of Sustainability Clauses in EU Trade Agreements

What the paper says

More than four years after the European Union (EU)-Korea panel ruling, this article explores the meaning of the case for the design and follow-up of sustainability clauses in EU trade agreements. It analyses the case in the perspective of the recent history of EU Trade and Sustainable Development (TSD) policy. It is argued that the application of a ‘developmental’ approach to sustainability provisions in EU trade agreements constitutes the main innovation brought by the EU-Korea panel ruling. This ‘developmental’ approach entails that TSD provisions – social and environmental clauses – enable the re-embedding of the market into a form of development that is more sustainable. The article will focus on the labour component of TSD provisions. The developmental approach explored entails that social rules contained in EU trade agreements are perceived as productive factors paving the way for sustainable growth and competitiveness that is not solely based on cost factors. In doing so, the panel ruling questions the thirty-year dominance of the World Trade Organization (WTO) Singapore Ministerial Declaration (1996), which considered the trade-labour nexus as two separate pillars. By offering this new paradigmatic approach, the panel ruling has paved the way for a normative intertwining of trade and social issues. In the aftermath of the panel ruling, the European Commission has swiftly built on the opportunities – and the limits – provided by the ruling to strengthen its sustainability provisions, essentially through the amendment of the compliance and ‘essential elements’ clauses. However, the evolution of TSD provisions continues to be controversial. This article will outline options for future TSD provisions and conclude that the structural evolution suggested by the developmental approach promoted in the EU-Korea panel ruling should further strengthen the sustainable policy space.