hankyoreh

Pacta sunt servanda — the principle that agreements must be fulfilled in good faith is a cornerstone of the international, rules based order. In the field of trade this principle applies to commitment countries have taken as members of the World Trade Organization (WTO) but also to any bilateral trade agreements they enter into. These bilateral and plurilateral agreements have for the last years grown into the main drivers of trade integration. And as trade policy has developed over the last years, they have become broader, tackling issues that go beyond the traditional understanding of trade: tariffs and quotas, relatively straight-forward questions of market access.

Trade agreements today cover questions of regulatory cooperation, services, data flows and sustainability. Trade agreements are comprehensive documents that tackle modern challenges to free and fair trade.

The European Parliament (EP) has long been a champion of enlarging the scope of trade to questions of sustainability. Through the influence of the EP, labor rights and environmental standards have become an integral part of EU trade policy, a fact that has been underlined by a ruling by the European Court of Justice. Of course we do not want to impose European values on other parts of the world. On the contrary, we promote universal values, set by multilateral organizations, the result of successful international cooperation. And once they are enshrined in a treaty, we expect all partners to the treaty to implement what they have signed up to — which brings us back to the principle of pacta sunt servanda.

Adherence to this principle guarantees an environment of stability and predictability in which partnerships can grow and businesses prosper. It is a principle that is vital to the functioning of trade policy and should not be treated lightly. Countries are judged by how they are living up to their international commitments, especially in times when the international order is being put into question by powerful actors. They are judged by how they implement the entirety of agreements they entered into. This takes us to the case of the EU-South Korea Free Trade Agreement (KOREU FTA).

At first glance it is a success story for both sides. Trade covered by the agreement prospered in both directions and the bilateral relationship received a boost. But there is one chapter under the agreement which has been a cause for concern in Europe for a number of years. Commitments under the trade and sustainable development chapter have lagged behind the rest of the agreement. For a number of years the KOREU FTA domestic advisory group (DAG) — a forum of business, NGO and labor union representatives — has been ringing the alarm bell. Members of DAG pointed to serious shortcomings of the Korean government and ministries to push forward ratification of the International Labour Organization (ILO) core labor standards enshrined in the agreement between the EU and Korea.

After an analysis of the situation and delegation visits to Korea, the international trade committee and the EP as a whole came to the same conclusion. Apparently, not all parts of the trade agreement were given the same importance — while no one expected Korea to fully align their domestic legislation to the eight ILO core labor standards, years without progress in this field were an unacceptable situation for many parliamentarians. This is why the European Parliament called for and supported the dispute settlement procedure on non-compliance launched by the European Commission against Korea.

We are glad to finally see movement in Korea when it comes to the question of core labor standards and especially of freedom of association. We appreciate that domestic reform is never an easy undertaking but at the same time have to criticize that too much time has been wasted talking down the problems or ignoring them. We expect the ratification of the outstanding ILO core labor standards to go hand in hand with a meaningful implementation of the standards. The EP wants to embrace Korea as a partner country that lives up to its commitments, without any caveats. Pacta sunt servanda should be the undisputed basis for our cooperation. A principle which is more important now than ever before in our lifetime.

Bernd Lange

By Bernd Lange, chairman of the European Parliament Committee on International Trade

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