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ABSTRACT
Labour rights protection has been an important issue in international trade law, and its significance has gained momentum in recent times. Historically, countries from the Global North and the Global South have advocated opposing positions on a trade-labour linkage in the World Trade Organization system. Despite this long debate, one can observe a rise of labour clauses in bilateral and regional trade agreements. Previous literature has primarily focused on the United States (US) and the European Union (EU) perspectives, neglecting the practices and policies of Asia-Pacific countries. With the emergence of New Asian Regionalism, it is crucial to investigate how Asia-Pacific economies are promoting labour rights through free trade agreements (FTAs). This paper first presents an empirical study of labour clauses in Asia-Pacific FTAs, analysing their number, trend, concentration, and distribution. It finds that there is an increasing number of Asia-Pacific FTAs where labour clauses are inserted and that these provisions have presented a great diversity. However, in terms of substance, the latest legal framework of labour protection in Asia-Pacific FTAs is heavily influenced by the labour policies of the EU, while intra-Asia-Pacific trade agreements display inconsistent practices. This paper also identifies potential complaints that Asia-Pacific countries may face while enforcing labour commitments in FTAs, illustrated by the recent EU-Korea dispute. Overall, this paper provides a comprehensive understanding of the current state of labour rights protection in Asia-Pacific FTAs and highlights the need for further research to investigate the practices and policies of individual countries in the region.
Acknowledgements
An earlier version of this paper was presented at the SMU-Asia Pacific Law Review Workshop on Trade and Investment Integration: Shaping the Future of Asia Pacific in October 2022 and at the CCCL Young Scholar Forum organized by the City University of Hong Kong Centre for Chinese and Comparative Law in March 2023. The author expresses gratitude to the speakers and participants at both events for their feedback. Special thanks are extended to Prof. Michelle Limenta, Prof. Pasha Hsieh, Prof. Julien Chaisse, as well as two anonymous reviewers, for their insightful comments. The author also thanks Prof. Sin Chit Martin Lai, Ms. Yi Tang, and Ms. Yizhi Wang for engaging in fruitful discussions with me on this topic.
Disclosure statement
No potential conflict of interest was reported by the author(s).
Notes
1 See World Trade Organization, Mainstreaming Trade to Attain the Sustainable Development Goals (WTO 2018) <www.wto-ilibrary.org/content/books/9789287042736> accessed 11 September 2022.
2 ibid 2.
3 For a general discussion on this development, see e.g. Desirée LeClercq, ‘Invisible Workers’ (2022) 116 AJIL Unbound 107; Lorenzo Cotula and Liliane Mouan, ‘Labour Rights in Special Economic Zones: Between Unilateralism and Transnational Law Diffusion’ (2021) 24 Journal of International Economic Law 341; Kathleen Claussen, ‘Reimagining Trade-Plus Compliance: The Labor Story’ (2020) 23 Journal of International Economic Law 25; James Harrison and others, ‘Labour Standards Provisions in EU Free Trade Agreements: Reflections on the European Commission’s Reform Agenda’ (2019) 18 World Trade Review 635.
4 European Commission, ‘Trade for All: Towards a More Responsible Trade and Investment Policy’ (European Union 2014) <https://trade.ec.europa.eu/doclib/docs/2015/october/tradoc_153846.pdf>; Kevin Kolben, ‘A Development Approach to Trade and Labor Regimes’ (2010) 45 Wake Forest Law Review 355, 356–7.
5 Virginia A Leary, ‘WTO and the Social Clause: Post-Singapore’ (1997) 8 European Journal of International Law 118, 119–20.
6 Kofi Addo, ‘The Correlation Between Labour Standards and International Trade: Which Way Forward?’ (2002) 36 Journal of World Trade 285, 286.
7 See Anita Chan and Robert JS Ross, ‘Racing to the Bottom: International Trade without a Social Clause’ (2003) 24 Third World Quarterly 1011; Kolben (n 4) 356–7.
8 See Magdalena Bernaciak, ‘Social Dumping: Political Catchphrase or Threat to Labour Standards?’ (European Trade Union Institute 2012) Working Paper 2012.16 <http://www.ssrn.com/abstract=2208393> accessed 12 September 2022.
9 Lars Engen, ‘Labour Provisions in Asia-Pacific Free Trade Agreements’ (Economic and Social Commission for Asia and the Pacific 2017) Background Paper No.1/2017 5 <www.unescap.org/sites/default/files/Background%20Material%20-%20Labour%20provisions%20in%20Asia-Pacific%20PTAs.pdf> accessed 11 September 2022. A different viewpoint is also surfaced that the dispute resolution mechanism in trade agreements is problematic in terms of enforcing the embedded labour provisions and does not really promote global labour standards as effectively as expected. See Thomas Payne, ‘Retooling the ILO: How a New Enforcement Wing Can Help the ILO Reach Its Goal Through Regional Free Trade Agreements’ (2017) 24 Indiana Journal of Global Legal Studies 597, 601–2.
10 Ferdi De Ville, Jan Orbie, and Lore Van den Putte, ‘TTIP and Labour Standards’ (European Parliament’s Committee on Employment and Social Affairs 2016) IP/A/EMPL/2015-7 49.
11 Engen (n 9) 5–6.
12 Notably, the EU’s initial proposal for a trade-labour nexus in the WTO system also concerned ‘the universal nature of labour standards as human rights’ over a race to the bottom worry. But this human rights emphasis did not ultimately succeed because of ‘the initial lack of consensus among the EU members … and the low priority of the linkage issue in its multilateral agenda’. See Montserrat González Garibay, ‘The Trade-Labour Linkage from the Eyes of the Developing Countries: A Euphemism for Protectionist Practices?’ (2009) 14 European Foreign Affairs Review 763, 769. Lately, the EU has reaffirmed the importance of prioritizing human rights and high labour standards in trade policy through its ‘Trade for All’ policy, which was launched in 2015 and remains the cornerstone of the EU’s trade strategy. The policy has guided the EU’s recent trade negotiations and reinforces the EU’s commitment to promoting sustainable and inclusive economic growth. See European Commission, ‘Trade for All: Towards a More Responsible Trade and Investment Policy’ (European Union 2014) 22–6 <https://trade.ec.europa.eu/doclib/docs/2015/october/tradoc_153846.pdf>.
13 Leary (n 5) 119–20.
14 Engen (n 9) 6.
15 ‘Singapore WTO Ministerial 1996: Ministerial Declaration, WT/MIN(96)/DEC’ (World Trade Organization, 13 December 1996) <www.wto.org/english/thewto_e/minist_e/min96_e/wtodec_e.htm> accessed 1 May 2022.
16 The ILO has started their observations on labour provisions in trade agreements since the beginning of the 21st century and has published a series of documents reporting development of labour rights in FTAs and analysing their features and effectiveness. See e.g. International Labour Organization, ‘Handbook on Assessment of Labour Provisions in Trade and Investment Arrangements’ (International Labour Office (Geneva) 2017) <www.ilo.org/global/publications/books/WCMS_564702/lang--en/index.htm>; International Labour Organization, ‘Labour Provisions in G7 Trade Agreements: A Comparative Perspective’ (International Labour Office (Geneva) 2019) <www.ilo.org/global/publications/books/WCMS_719226/lang--en/index.htm> accessed 10 October 2022.
17 See e.g. Billy Melo Araujo, ‘Labour Provisions in EU and US Mega-Regional Trade Agreements: Rhetoric and Reality’ (2018) 67 International & Comparative Law Quarterly 233; Marco Bronckers and Giovanni Gruni, ‘Retooling the Sustainability Standards in EU Free Trade Agreements’ (2021) 24 Journal of International Economic Law 25.
18 For a detailed discussion of New Asian Regionalism, see the Introductory Chapter of this Special Issue: Julien Chaisse and Pasha Hsieh, ‘Rethinking Asia-Pacific Regionalism and New Economic Agreements’ (2023) 32 Asia Pacific Law Review. See also Pasha L Hsieh, New Asian Regionalism in International Economic Law (Cambridge University Press 2021) 4, 12–15.
19 Hsieh (n 18) 67–99.
20 In this paper, Asia-Pacific FTAs stand for trade agreements where at least one trade partner is from the region of Asia and the Pacific.
21 The LP Hub builds on the WTO’s Regional Trade Agreements Information System of trade agreements notified to the WTO since 1948 and provides a comprehensive compilation of trade agreements with or without labour provisions. For more information regarding this Hub, see ‘About the Labour Provisions in Trade Agreements Hub’ International Labour Organization <www.ilo.org/LPhub/#about> accessed 13 September 2022.
22 See ‘ILO Labour Provisions in Trade Agreements Hub (LP Hub)’ (International Labour Organization, 2022) <www.ilo.org/LPhub/> accessed 13 September 2022.
23 As a clarification, the terms of FTA and RTA are interchangeable throughout this paper.
24 Marva Corley-Coulibaly, Ira Postolachi, and Netsanet Tesfay, ‘A Multi-Faceted Typology of Labour Provisions in Trade Agreements: Overview, Methodology and Trends’ International Labour Organization, 2–3 <www.ilo.org/global/research/projects/trade-decent-work/publications/WCMS_829644/lang--en/index.htm>.
25 For a detailed presentation of the typology in the ILO’s LP Hub, see Corley-Coulibaly, Postolachi, and Tesfay (n 24). Having presented a literature review of labour provisions’ mapping and typologies in their paper, Corley-Coulibaly, Postolachi, and Tesfay show that a range of classification methods has been employed in the existing scholarship: Araujo (n 17) has advanced the typologies of (1) labour-related obligations, (2) required reforms to domestic regulatory systems, (3) institutional mechanisms, and (4) dispute settlement. Raess and Sari (2018) have additionally put ‘aspirational statements relating to labour provisions in preamble and objectives of the agreement’ as a separate category. While in their subsequent research, Raess and Sari (2020) separate ‘cooperation’ and ‘institutions overseeing labour commitments’ into two types and have additionally identified the category of ‘substance-related labour provisions in relation to investment’. See generally Araujo (n 17); Damian Raess and Dora Sari, ‘Labor Provisions in Trade Agreements (LABPTA): Introducing a New Dataset’ (2018) 9 Global Policy 451; Damian Raess and Dora Sari, ‘Labor Market Regulations’ in Aaditya Mattoo, Nadia Rocha and Michele Ruta (eds), Handbook of Deep Trade Agreements (World Bank 2020).
26 Art.9.6, Chile-Indonesia Comprehensive Economic Partnership Agreement.
27 Arts.16.10-16.14, Korea-Colombia FTA.
28 Chapter 12, Section D, EU-Singapore FTA.
29 Art.11.6, Chile-Thailand FTA.
30 Art.18.4, Peru-Australia FTA.
31 Art.13.4, United Kingdom-Vietnam FTA.
32 Art.16.3, EU-Japan Economic Partnership Agreement.
33 Aspirational statements relating to labour issues inserted in the preamble of a trade agreement are also excluded from discussions in this paper.
34 Singapore is one of the two countries (the other country is Australia) in Asia Pacific who signed trade agreements with the US between 2003 and 2006. According to the ILO, these US FTAs ‘all fall within the third-generation model’ which includes the trade objectives of promoting core labour standards. The Singapore-US FTA became effective in 2004 while the Australia-US FTA (where similar labour provisions are included) entered into force in 2005. See International Labour Organization, ‘Assessment of Labour Provisions in Trade and Investment Arrangements: Studies on Growth with Equity’ (International Labour Office 2016) 44 <www.ilo.org/wcmsp5/groups/public/---dgreports/---inst/documents/publication/wcms_498944.pdf> accessed 7 December 2022.
35 An exception is the ASEAN-Australia-New Zealand trade agreement where two parties – Australia and New Zealand – have concluded a memorandum of agreement on labour cooperation. It is worth mentioning that the ASEAN Economic Community Blueprint 2025 recognizes the importance of facilitating a seamless movement of skilled labour. See ‘ASEAN Economic Community Blueprint 2025’ 10–11 <https://asean.org/wp-content/uploads/2021/08/AECBP_2025r_FINAL.pdf> accessed 7 December 2022.
36 In the Australia-Chile FTA (2009), Peru-China FTA (2010), and the Iceland-China FTA (2014), no provisions of obligations were found but there exist provisions of monitoring and cooperation.
37 Four exceptions are the Japan-Philippines Economic Partnership Agreement (2008), Japan-Switzerland Free Trade and Economic Partnership Agreement (2009), Japan-Mongolia trade agreement (2016), and the Pacific Agreement on Closer Economic Relations Plus (RACEP Plus) (2020).
38 Corley-Coulibaly, Postolachi, and Tesfay (n 24) 11.
39 ibid 16.
40 Art.16.12, EU-Japan FTA (2019).
41 Art.16.13(3), UK-Vietnam FTA (2021).
42 Peru-Korea (2011), Annex 18A-Cooperation.
43 US-Singapore (2004), Annex 17-A United States-Singapore Labour Cooperation Mechanism.
44 Corley-Coulibaly, Postolachi, and Tesfay (n 24) 16.
45 For instance, in the Korea-US FTA, a state party is required to first seek to resolve the dispute in accordance with procedures established in the labour chapter before having recourse to the traditional dispute settlement mechanisms. See Art.19.7 (5), Korea-US FTA.
46 See e.g., Chile-Indonesia FTA and Peru-Australia FTA. Strictly speaking, this type of trade agreements should not be regarded as containing dispute resolution mechanisms as the relevant clause is not to provide, but to exclude from using any dispute resolution options.
47 Art.13.16, UK-Vietnam FTA (2021).
48 See generally Kathleen Claussen, ‘Trade’s Experimental Compliance Mechanisms’ in Manfred Elsig, Rodrigo Polanco, and Peter van de Bossche (eds), International Economic Dispute Settlement: Demise or Transformation? (Cambridge University Press 2021); Maria Anna Corvaglia, ‘Labour Rights Protection and Its Enforcement under the USMCA: Insights from a Comparative Legal Analysis’ (2021) 20 World Trade Review 648.
49 EU’s approach to labour clauses is also adopted in the China-EU Comprehensive Agreement on Investment (CAI), though with slight differences. For a detailed study of the labour provisions in the China-EU CAI, see e.g. Katia Fach Gómez, ‘EU-China Negotiations on Investor State Dispute Settlement within the CAI Framework: Are We on the Right Track?’ (2021) 55 Revista General de Derecho Europe 55 48; Kari Otteburn and Axel Marx, ‘A Glass Half-Empty or Half-Full? An Assessment of the Labour Provisions in the CAI from Chinese and European Perspectives’ (2022) 23 Journal of World Investment & Trade 601; Yueming Yan, ‘A New Chapter in China’s Stance on Labour Protection? An Assessment of the China–EU CAI’ (2022) 25 Journal of International Economic Law 464.
50 In fact, the US has used this policy in the USMCA. But it is so far unreported if the US has employed this ‘pre-ratification’ policy with Asian countries. See Álvaro Santos, ‘Reimagining Trade Agreements for Workers: Lessons from the USMCA’ (2019) 113 AJIL Unbound 407.
51 ‘Report from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions on the Implementation of the EU Trade Agreements (1 January 2019–31 December 2019)’ (2020) COM (2020) 705 29 <https://ec.europa.eu/transparency/documents-register/detail?ref=COM(2020)705&lang=en> accessed 7 October 2021.
52 Yan (n 49).
53 Engen (n 9) 1.
54 Araujo (n 17).
55 James Harrison, ‘The Labour Rights Agenda in Free Trade Agreements’ (2019) 20 The Journal of World Investment & Trade 705, 708.
56 International Labour Organization, ‘Handbook on Assessment of Labour Provisions in Trade and Investment Arrangements’ (n 16) 11.
57 Engen (n 9) 53.
58 Notably, in the ASEAN-Australia-New Zealand trade agreement, labour provisions occur only in the Memorandum of Agreement (MoA) on Labour Cooperation concluded by New Zealand and Philippines bilaterally.
59 For those where no labour clause is found, they were concluded all in or before 2005. They are the South Pacific Regional Trade and Economic Cooperation Agreement (SPARTECA), Australia-New Zealand Closer Economic Relations Trade Agreement (ANZCERTA), New Zealand-Singapore FTA, and the Thailand-New Zealand FTA.
60 From this point, some have regarded Korea as an accepter rather than promoter. See Engen (n 9) 57.
61 Out of Japan’s 18 signed FTAs, 7 have incorporated labour provisions, namely the UK-Japan FTA, EU-Japan, CPTPP, Japan-Mongolia FTA, Japan-Switzerland FTA, Japan-Philippines FTA, and the Chile-Japan FTA. Despite Australia and Peru actively including labour provisions in their trade agreements, the Japanese FTAs with these countries do not contain such provisions. Conversely, labour provisions are absent in FTAs with India, Vietnam, Brunei Darussalam, Indonesia, Thailand, Malaysia, Mexico, Singapore, and the ASEAN.
62 Similarly, among Australia’s 17 FTAs, 7 have included labour provisions: the Pacific Agreement on Closer Economic Relations Plus, CPTPP, Peru-Australia FTA, Korea-Australia FTA, Malaysia-Australia FTA, Australia-Chile FTA, and the US-Australia FTA. However, FTAs with Indonesia, Hong Kong, Japan, China, Thailand, Singapore, and Papua New Guinea do not include labour provisions.
63 Joint Standing Committee on Treaties of the Parliament of Australia, ‘Chapter 3 (Australia-Chile Free Trade Agreement), Report 95: Review into Treaties Tabled on 4 June, 17 June, 25 June and 26 August 2008’ (2008) 3.50 <www.aph.gov.au/Parliamentary_Business/Committees/Joint/Completed_Inquiries/jsct/4june2008/report1> accessed 10 April 2023.
64 Among 16 Malaysia FTAs, only three contains labour-related provisions effective upon Malaysia: the CPTPP, Malaysia-Australia FTA, and the New Zealand-Malaysia FTA.
65 Hsieh (n 18) 4.
66 Chapter 19, the CPTPP.
67 See e.g., Álvaro Santos, ‘The Lessons of TPP and the Future of Labor Chapters in Trade Agreements’ in Benedict Kingsbury and others (eds), Megaregulation Contested: Global Economic Ordering After TPP (Oxford University Press 2019); Joo-Cheong Tham and KD Ewing, ‘Labour Clauses in the TPP and TTIP: A Comparison without a Difference?’ (2016) 17 Melbourne Journal of International Law 1.
68 See generally Louise Malingrey and Yann Duval, ‘Mainstreaming Sustainable Development in Regional Trade Agreements: Comparative Analysis and Way Forward for RCEP’ (Asia-Pacific Research and Training Network on Trade (ARTNeT) 2022) ARTNeT Working Paper Series No. 213 <www.unescap.org/sites/default/d8files/knowledge-products/AWP213_3.pdf>.
69 Hsieh (n 18) 97.
70 Manjiao Chi, ‘RCEP, FDI and the 2030 Agenda: How the RCEP Investment Chapter Could Help Achieve the SDGs?’ (Economic and Social Commission for Asia and the Pacific 2022) Working Paper No. 3 <www.unescap.org/sites/default/d8files/knowledge-products/AWP-FDI-3-2022_Manjiao%20Chi_web.pdf>; Malingrey and Duval (n 68).
71 An institutional framework in the RCEP context is likely to be a starting point. See Hsieh (n 18) 97–9.
72 In the Matter of Guatemala - Issues Relating to Obligations Under Article 1621(a) of the CAFTA-DR, Final Report of the Panel.
73 Panel of Experts Proceeding Constituted under Article 1315 of the EU-Korea Free Trade Agreement, Report of the Panel of Experts.
74 In many US FTAs, only a particular type of labour obligations is subject to the state-state dispute settlement mechanism, namely the non-enforcement clause. This clause provides that parties ‘shall not fail to effectively enforce its labour laws, through a sustained or recurring course of action or inaction, in a manner affecting trade … ’. This clause has been the subject-matter in the labour dispute between the US and Guatemala under the Dominican Republic-Central America FTA (CAFTA-DR).
75 For EU’s policy on dispute settlement mechanisms for labour provisions, see e.g. Yan (n 49) 470–2; Axel Marx and others, Dispute Settlement in the Trade and Sustainable Development Chapters of EU Trade Agreements (Leuven Centre for Global Governance Studies 2017).
76 EU-Korea labour case, Report of the Panel of Experts (2021) (n 73) paras 54–60.
77 Art.13.4.3, EU-Korea FTA (2010).
78 EU-Korea labour case, Report of the Panel of Experts (2021) (n 73) paras 107–8.
79 ibid 127.
80 ibid 196–7, 208–9, 227–8, 257–8.
81 ibid 269.
82 ibid 288.
83 ibid 276, 288.
84 ibid 291.
85 ibid 291–3.
86 See ‘Ratification of Three Fundamental ILO Conventions Marked in Virtual Ceremony with ILO View’ (Ministry of Foreign Affairs, Republic of Korea, 21 April 2021) <www.mofa.go.kr/eng/brd/m_5676/view.do?seq=321641> accessed 10 December 2022.
87 It is worth mentioning that the US-Guatemala labour dispute has also exerted significant impact on the development of labour protection in the international trade law context. As Professor Kathleen Claussen provides this is the first-ever state-state case arising out of a labour clause in a trade agreement and has been regarded as a ‘test’ to examine the actual effects of labour provisions promoted by the US. See Claussen (n 3) 33–4.
88 Under the US FTAs with labour commitments, suspensions of trade benefits may be imposed if any panel established to address labour disputes has found non-fulfilment of labour clauses by trade partners.
89 EU-Korea labour case, Report of the Panel of Experts (2021) (n 73) para 127.
90 Lorenzo Cotula, ‘EU–China Comprehensive Agreement on Investment: An Appraisal of Its Sustainable Development Section’ (2021) 6 Business and Human Rights Journal 360, 364; Bronckers and Gruni (n 17) 26.
91 EU-Korea labour case, Report of the Panel of Experts (2021) (n 73) paras 268–9.
92 ibid 277. Arguably, it is advanced that the ‘best-efforts’ clause should be refined and reshaped into an obligation of result, thereby demanding trade partners to take more radical measures to comply with their obligations. See Julien Chaisse, ‘FDI and Sustainable Development in the EU-China Investment Treaty: Neither High nor Low, Just Realistic Expectations’ (2022) No. 323 Columbia FDI Perspectives 1, 2.
93 For a discussion on the effectiveness and enforcement of the panel report in the EU-Korea labour dispute, see e.g., Aleydis Nissen, ‘Not That Assertive: The EU’s Take on Enforcement of Labour Obligations in Its Free Trade Agreement with South Korea’ (2022) 33 European Journal of International Law 607; Chunlei Zhao, ‘Implementing and Enhancing Labour Standards Through FTAs? A Critical Analysis of the Panel Report in the EU-Korea Case’ (2022) 56 Journal of World Trade 939. More reflections on this case are available here: Laurence Boisson de Chazournes and Jaemin Lee, ‘The European Union–Korea Free Trade Agreement Sustainable Development Proceeding: Reflections on a Ground-Breaking Dispute’ (2022) 23 The Journal of World Investment & Trade 329.
94 See International Labour Organization, Conventions and Recommendations <www.ilo.org/global/standards/introduction-to-international-labour-standards/conventions-and-recommendations/lang--en/index.htm> accessed 10 April 2023.