RTA DISPUTES - EUROPE/MIDDLE EAST/AFRICA
(1) EU FTAs and EPAs:
On 11 December 2019 the EU Commission launched a proposal to strengthen trade agreement enforcement including enforcement of bilateral trade agreements. The Commission also created the position of Chief Trade Enforcement Officer. See press release; proposal; memo; infographic. The Chief Trade Enforcement Officer oversees the EU Single Entry Point for complaints concerning denial of market access or sustainable development obligations in EU trade agreements.
Nov. 16, 2020 EU press release on complaints system for trade and sustainable development provisions in EU trade agreements
The EU Commission Directorate-General for Trade (DG-Trade) now has a special webpage for disputes under bilateral trade agreements. As it states, “The EU includes a dispute settlement mechanism in all its trade agreements so that the EU and its trading partners can resolve disputes. The system allows for the rapid settlement of disputes and is modeled after the WTO dispute settlement system. It is specifically designed to deal with disputes arising out of the rules of the bilateral trade agreement.”
On June 22, 2022, after a review of enforcement issues, the EU Commission unveiled a new plan to strengthen implementation and enforcement of Trade and Sustainable Development (TSD) chapters of EU trade agreements. Under this new approach, which will apply to future negotiations and to ongoing negotiations as appropriate:
EU trade agreements will apply standard state-to-state dispute settlement procedures to their TSD chapters; a party found to violate TSD commitments will be required to promptly state how it will comply, and when.
Trade sanctions will be available for serious violations of core TSD commitments (ILO fundamental principles and rights at work; Paris Agreement on Climate Change) and can include (temporary and proportionate) suspension of trade concessions.
EU will make it easier for civil society and Domestic Advisory Groups (DAGs) to lodge complaints on violations of TSD commitments; is setting timelines for Commission handling of TSD complaints.
Links: Commission press release; Commission Communication; Factsheet; link to DG-Trade Single Entry Point with links to complaint forms and explanations on how to file a complaint. November 2021 consultant report to EU on comparative analysis of TSD provisions in third country trade agreements.
(A) EU-Korea Free Trade Agreement:
Korea - Compliance with labor commitments in Chapter 13 of EU-Korea Free Trade Agreement
18 December 2018: EU requests formal consultations with Republic of Korea concerning labor commitments of EU-Korea trade agreement; EU press release and consultation request. Concerns expressed included respect for International Labour Organisation (ILO) fundamental principles of freedom of association and the right to collective bargaining, and Korea failure to ratify four fundamental ILO Conventions: two concerning freedom of association and the right to collective bargaining, and two concerning forced labor. Consultations took place on 21 January 2019 in Seoul.
4 July 2019: EU requests a panel (Links: EU press release; panel request) to examine issues not satisfactorily addressed during consultations, including four provisions in the Korean Trade Union Act:
Article 2(1) definition of “worker”, which excludes some categories of self-employed persons s well as dismissed and unemployed persons from the scope of the freedom of association.
Article 2(4)(d) stating that an organization shall not be considered as a union if persons who do not fall under the definition of “worker” can join.
Article 23(1) stating that trade union officials may only be elected from among the members of the trade union.
Article 12(1) - (3) (combined with Article 2(4) and Article 10) providing for discretionary certification procedure for establishment of trade unions.
EU claims that measures (1) - (3), and the discretion provided by measure (4), are inconsistent with Korea’s commitments under FTA Article 13.4.3 to respect, promote and realize in its laws and practices, the principle of freedom of association.
EU further claims that Korea committed to make continued and sustained efforts toward ratifying fundamental ILO Conventions, but 8 years after entry into force of the FTA, Korea has still not ratified four ILO fundamental Conventions and has not made continued and sustained efforts to ratify: (1) ILO C87 Freedom of Association and Protection of the Right to Organize Convention, 1948; (2) ILO C98 Right to Organize and Collective Bargaining Convention, 1949; (3) ILO C29 Forced Labor Convention, 1930; and (4) ILO C105 Abolition of Forced Labour Convention, 1957.
19 December 2019: DG Trade announces that the parties completed panel selection in the EU-Korea dispute over workers’ rights in Korea.
Panel was established and started its work on 30 December 2019; panelists are Prof. Laurence Boisson de Chazournes (selected by the EU), Prof. Jaemin Lee (selected by Korea) and Thomas Pinansky (selected by them as chair). (EU press release; procedural information on the panel). The deadline for amicus briefs was 10 January 2020. The parties and the panel will determine the timing and venue of proceedings.
Panel should present its report to the parties by the end of March 2020 unless the Parties agree otherwise. EU will publish the report and its written submissions to the panel and the parties will transmit the report to their Domestic Advisory Groups established under Article 13.12(4) of the FTA.
According to the EU, In October 2019, the government had submitted legislative proposals to ratify three of the ILO Conventions and to make necessary labor reforms, but the National Assembly had not taken any formal steps to discuss or vote on these bills. See also 20 December 2019 Korea Times overview on this dispute and generally, article by Giovanni Gruni on Labor Standards in the EU-South Korea FTA.
20 January 2020: EU makes its first submission in this dispute.
31 March 2020: In light of COVID-19 travel restrictions, Parties and panel agree to postpone hearing in EU-Korea dispute on workers’ rights in Korea (originally scheduled for 14-16 April at WTO building in Geneva).
15 September 2020: EU and Korea announce that Panel in EU-Korea dispute on workers’ rights in Korea will hold a virtual hearing on 8-9 October due to pandemic travel restrictions; announce replacement of panel chair.
8-9 October: Hearing held by videoconference; in November the parties issue an agreed summary of the hearing.
25 January 2021: Panel releases its final panel report, in EU-Korea dispute on Korea’s implementation of EU-Korea FTA labor rights provisions. EU press release here; analysis by Prof. Steve Peers here.
(B) EU-Southern African Customs Union (SACU) Economic Partnership Agreement:
SACU - Safeguard Measures on Frozen Bone-In Chicken Cuts:
EU webpage with documents: Link
SACU webpage of documents on this dispute: Link
14 June 2019: EU requests consultations with Southern African Customs Union (SACU) on 35.3% safeguard tariffs imposed on frozen bone-in chicken cuts from the EU in September 2018. Links: EU press release; EU consultation request; commentary by EPAMonitoring.net.
21 April 2020: EU requests establishment of an arbitration panel. Link: EU panel request.
8 December 2021: EU Commission announces that a panel has been established in this dispute. Panelists: Mr. Makane Moïse Mbengue (Chairperson); Ms. Hélène Ruiz Fabri (selected by EU); Mr. Faizel Ismail (selected by SACU). Commission expects a panel ruling by Q2 2022.
Any natural person of a party, or legal person established in a party that is independent from governments of the parties, may submit an amicus curiae submission by 28 December 2021. Submission must be in English and must be directly relevant to a factual or a legal issue under consideration by the arbitration panel; must describe the submitter, nature of its activities, its legal status, its general objectives and its source of financing; must state the submitter’s interest in the proceeding (see announcement for details).
8 December 2021: SACU announces establishment of panel and calls for amicus submissions.
20 December 2021: EU submits First Written Submission.
24 January 2022: SACU submits its First Written Submission.
2 - 4 March 2022: In-person hearing held in Gaborone, Botswana on 2-3 March; due to counsel contracting COVID-19, 3 March afternoon session held by videoconference and 4 March session cancelled; hearing concluded on 12 March by videoconference.
11 March 2022: SACU allows the bilateral safeguard measure to expire without extending it.
3 August 2022: EU announces arbitration panel “ruled in favour of the EU”, stating that:
“the panel found that the safeguard measure was not proportionate and went beyond what was needed to remedy or prevent any serious injury or disturbances. Moreover, the delay between the investigation and the adoption of the safeguard measure was excessive and not in line with the EU-SADC EPA.”
3 August 2022: SACU announces “landmark victory for the SACU poultry industry”, stating that:
“Dismissing the majority of the EU’s claims, in particular those pertaining to the geographical scope of the measure, the requirement for an investigation, the adequacy of the information provided to the EU as well as the request for a refund of the duties already paid, the Arbitration Panel confirmed that the EU-SADC EPA provides for a safeguard regime that departs from that under WTO rules, emphasising the developmental character of the EU-SADC-EPA. The EU also failed to establish that increased imports from the EU had not caused injury although the Panel made no finding on this issue. The Panel however upheld claims by the EU relating to the fact that SACU may not have considered other factors with regard to the proportionality of the duty, as well as the duration of the consultations that SACU conducted, including with the EU, before imposing the measure.”
11 August 2022: EU and SACU release text of panel report.
Procedural notes: panelists used assistants (no secretariat). Panel received three amicus submissions from meat and poultry trade and producer organizations. Panel report lists hearing participants including outside counsel. Delivery of hearing transcript to the panel was delayed (47 days after close of hearing). Parties agreed 3 times to extend deadline for delivery of interim panel report.
Panel report: Discussion by Iana Dreyer in the Borderlex newsletter here.
(C) EU-Ukraine Association Agreement:
Ukraine - Export Restrictions on Unprocessed Wood and Sawn Wood:
16 January 2019: EU requests formal consultations with Ukraine under the EU-Ukraine Association Agreement (AA) concerning Ukraine’s failure to eliminate its ban on exports of unprocessed wood. EU press release; consultation request.
20 June 2019: EC requests a panel under the EU-Ukraine Association Agreement in its dispute concerning Ukraine’s export ban on unprocessed wood. Links: EU press release; EU panel request.
28 January 2020: Panel established in EU-Ukraine dispute on Ukraine’s wood export ban. Panelists: Mr. Christian Häberli (Chairperson); Mr Giorgio Sacerdoti and Mr Victor Muraviov (Members).
EU announces that interested natural or legal persons established in the EU or Ukraine (“amicus curiae”) may make unsolicited written submissions to the panel, due 27 February 2020. Submissions must be concise, including annexes, and relevant to the factual and legal issues under consideration. Submission must include description of the submitter, including place of establishment, nature of activities, source of its financing and nature of its interest in the proceeding.
17 February 2020: EU makes written submission in dispute.
28 July 2020: Ukraine makes written submission.
21 September 2020: EU, Ukraine and Panel announce that panel hearing in EU-Ukraine dispute on Ukraine wood export ban will hold its hearing as a virtual hearing online on 22-23 September.
22-23 September 2020: Virtual hearing held.
11 December 2020: Final panel report (including working procedures, timetable and executive summaries of submissions). Panel finds that:
Ukraine’s 2005 export ban (on ten specific wood species of low commercial use, characterised as “rare and valuable”) is incompatible with ban on export prohibitions in Art. 35 of AA, but is justified as measure “necessary to protect….plant life” under GATT Article XX(b) as applied to AA by Article 36 of AA, also taking into account relevant provisions of AA Chapter 13 on trade and sustainable development; 2005 export ban therefore does not breach AA Article 35
Ukraine’s 10-year export ban instituted in 2015 (on all exports of unprocessed wood except pine) is incompatible with ban on export prohibitions in Art. 35 of AA, and is not justified under GATT Article XX(g) as applied to AA by Article 36 of AA, because 2015 export ban is not “relating to the conservation of exhaustible resources…made effective in conjunction with restrictions on domestic production or consumption.”
EU press release; EU background memo on history of the dispute.
See also 4 July 2019 blogpost by Iulianna Romanchyshyna on the International Economic Law & Policy Blog, discussing the Ukrainian measures, the EU claims, and possible Ukrainian defenses; 26 June 2019 blogpost by Erika Szyszczak on disputes under the EU-Ukraine agreement; 16 December 2020 article with statements by Ukraine’s lawyers; “EU-Ukraine Arbitration: Will WTO Law Become More Deferential Outside the WTO?” by Yury Rovnov, 55 Journal of World Trade 969-990 (2021); report by Iryna Polovets on panel report, 48 Legal Issues of Economic Integration 95-108 (2021).
(D) EU-Colombia-Ecuador-Peru EPA (EU-Andean Trade Agreement)
Complaint concerning mining labor outsourcing at Glencore mines in Colombia and Peru:
May 22, 2022: EU labor organization CNV International submits complaint to EU Single Entry Point on behalf of labor organizations in Colombia and Peru, alleging breach of Arts. 267, 269, 271 and 277 of Title IX of EU-Colombia-Peru Trade Agreement regarding obligation to comply with fundamental labour rights, freedom of association and the right to equality. Complaint concerns outsourcing and precarious employment at Glencore mines in Colombia and Peru. Links: text of complaint.
March 4, 2023: CNV International publishes complaint submitted May 22, 2022 to EU Single Entry Point on behalf of labor organizations in Colombia and Peru, alleging breach of Arts. 267, 269, 271 and 277 of Title IX of EU-Colombia-Peru Trade Agreement regarding obligation to comply with fundamental labour rights, freedom of association and the right to equality. Links: text of complaint.
March 21, 2023: CNV meets with European Parliament Committee on International Trade on its complaint concerning lack of compliance with sustainability chapter of EU-Andean Trade Agreement. Links: CNV press release; video of presentation.
(2) Israel- U.S. Free Trade Agreement:
US - Machine Tools from Israel:
In 1986, the US concluded bilateral agreements restricting exports of machine tools to the US from Japan and Taiwan respectively, in response to a US machine tool industry petition under Section 232 of the Trade Expansion Act of 1962. The export limits in these agreements were enforced through licensing schemes overseen by the US Commerce Department.
Starting in 1988, the Israeli machine tool company Sharnoa exported machine tools to the US which were substantially manufactured in Taiwan and further processed in Israel. Although US Customs had ruled that these products had 35% Israeli content and qualified for duty-free entry under the Israel-US FTA, the Commerce Department decided in 1990 to count Sharnoa’s machine tools against Taiwan’s export limits retroactively from 1989. Israel then brought this dispute. (Wall Street Journal, 11 Oct 1991) A panel was convened consisting of Prof. Donald McRae (chair), Joseph Greenwald and Prof. Joseph H.H. Weiler.
The panel's report to the parties is not publicly available. The dispute was settled informally after the panel report; Israel agreed to restrain its exports of machining centers qualifying for FTA treatment through December 1991, when the Taiwan VER expired.
(3) EU and EFTA Courts
Court of Justice of the European Union
According to its official description, the Court of Justice of the European Union (CJEU) "interprets EU law to make sure it is applied in the same way in all EU countries, and settles legal disputes between national governments and EU institutions. It can also, in certain circumstances, be used by individuals, companies or organisations to take action against an EU institution, if they feel it has somehow infringed their rights. … The CJEU is divided into 2 courts:
Court of Justice – deals with requests for preliminary rulings from national courts, certain actions for annulment and appeals.
General Court – rules on actions for annulment brought by individuals, companies and, in some cases, EU governments. In practice, this means that this court deals mainly with competition law, State aid, trade, agriculture, trade marks."
The respective court websites provide rulings and opinions in disputes brought before these courts. For further information, please consult the extensive secondary literature on the CJEU and its predecessor institutions.
EFTA Court
The Court of Justice of the European Free Trade Association States (the EFTA Court) fulfils the judicial function within the EFTA system, interpreting the Agreement on the European Economic Area with regard to the EFTA States party to the Agreement (Iceland, Liechtenstein and Norway). The EFTA Court's website is at http://www.eftacourt.int/
(4) African Regional Courts:
This webpage will add links to the websites of the regional courts and regional dispute settlement institutions of African regional trade agreements, and their best-known decisions. For information on African RTA dispute settlement I recommend James Thuo Gathii's African Regional Trade Agreements as Legal Regimes (Cambridge, 2013).
Last edited: 14 April 2023