On 20 January 2021, a Panel of Experts constituted under the EU–Korea FTA circulated its report in a proceeding initiated by the EU raising concerns about Korea's inadequate protection of certain labour rights in Korea, and less than satisfactory efforts to ratify the fundamental ILO Conventions. Addressing a jurisdictional claim, raised by Korea in its defense, that the EU has not demonstrated that the challenged measures affected ‘trade-related aspects of labour’, the panel found that the FTA parties’ commitments to adhere to labour standards and to ratify ILO conventions are not limited to trade-related aspects of labour, and therefore there is no requirement to demonstrate that such measures should be trade related.

The panel's interpretive reasoning in arriving at this finding does not appear to sit well with the text of the FTA. Further, such an expansive interpretation could have serious systemic implications going forward. In addition to raising questions regarding the purpose and motivations behind including labour standards in FTAs, it effectively transforms the FTA into a vehicle to enforce ILO commitments and induce countries into ratifying fundamental ILO conventions. It lends credibility to a general skepticism, particularly amongst developing countries, regarding the role of labor standards in FTAs and also raises questions regarding whether FTAs constitute an appropriate forum to address and resolve concerns regarding labour reforms.

This article offers some general thoughts on the rule of law in international economic law. It begins by briefly defining the rule of law and indicating the legal sources on which it is based. It then shows that the TFEU, confirmed by the case law of the Court of Justice, requires the rule of law to be respected in the conduct of the Union’s commercial policy. However, although the rule of law may be favourable to international trade and investment, it is not indispensable to them. The rule of law is conducive, but not essential, to trade and investment. For businesses, the risks associated with a weak respect for the rule of law represent a cost, which they take into account when setting the price of their products. Finally, it should be remembered that the principles of the rule of law do not apply in the same way in the domestic sphere as in international law. This article is intended as a panoramic introduction to the relationship between the rule of law and international economic law. More specialised studies are published later in this issue, including analyses focusing on trade or investment or national perspectives, such as that of China.

The Article explores the transformations triggered by digitalization in the domain of global trade law and seeks to evaluate the nature and the effects of the unfolding legal adaptation in this field of international law. For this purpose, the Article starts by mapping the sweeping effects of digitalization on trade and trade policies. It then turns to the current regulatory framework for digital trade—first, by sketching the state of affairs in the multilateral forum of the World Trade Organization (WTO) and second, by analyzing the more deliberate regulatory responses to the challenge of digitalization formulated in free trade agreements (FTAs), with a particular focus on some more recent advanced models of digital trade regulation. The Article finally seeks to contextualize and assess the impact of the existing legal framework and its adequacy for the contemporary data-driven economy, pointing also at some current deficiencies and potential setbacks going forward.

The international economic order is undergoing significant change. Most recently, key countries have been seeking to increase their level of economic security, including through increased industrial subsidies. Regulating subsidies is controversial, but undisciplined subsidy payments could be harmful for the healthy functioning of markets and balanced development among nations. In this regard, the GATT-WTO has regulated subsidies, but it has not been fully functional in recent years, and reform efforts do not appear to be bearing fruit soon. Therefore, in parallel with WTO reform efforts, reliance on other approaches, such as discipline through free trade agreements (FTAs), should be considered. Disciplining subsidies through FTAs is inherently difficult, given the cross-border nature of subsidies on the one hand and the geographical limitations of the FTA’s scope of application on the other. In recent years, however, such disciplines in FTAs have begun to appear, starting with EU FTAs. Thus, this article explores the possibilities and limitations of the discipline of subsidies through FTAs, using Japan’s FTAs as a case study, to approach the path to international control of subsidies. Accordingly, this article first reviews the range of related issues and developments, including characteristics of subsidies, the rationale for subsidy discipline in trade agreements, recent challenges to multilateral subsidy discipline, the current status of subsidy discipline through FTAs, and the background of subsidy discipline in EU FTAs. The article then identifies the WTO-plus elements that are distinct to subsidy disciplines in EU FTAs and discusses their implications. Through these, it highlights the perspectives needed when considering subsidy discipline through FTAs, examines Japan’s FTAs in light of these perspectives, and presents the findings and implications thereof. Considerations are given to Japan’s FTA/trade policy as a background for its subsidy discipline through FTAs, the current status and characteristics of subsidy disciplines in Japan’s FTAs, the Agreement Between the European Union and Japan for an Economic Partnership’s (JPN-EU) subsidy-related provisions as drastic change, the effects on the Asia-Pacific region, and future prospects.

In June 2022, the International Labour Organization (ILO) decided to amend the 1998 Declaration on Fundamental Principles and Rights at Work in order to include the right to a safe and healthy working environment among the core labour rights to which member States are committed by virtue of their membership. The amendment marks the successful completion of three years of negotiations initiated in response to the 2019 Centenary Declaration by which the ILO's tripartite constituency recognized that safe and healthy working conditions were fundamental to decent work. Adding occupational safety and health as a fifth pillar to the 1998 Declaration was generally welcomed as a commendable development although critics may still assert that as a soft law instrument the amended Declaration may not have decisive impact on workplace safety and health globally. Despite broad agreement about the timeliness and importance of recognizing occupational safety and health as a fundamental workers’ right—especially in light of the pandemic experience—concerns were raised about the possible implications of the amended Declaration on existing trade agreements, and in particular whether it would create, directly or indirectly, new obligations for member States. This article looks into the origins and negotiating history of the amendment to the 1998 Declaration and addresses the scope and legal effect of a saving clause by which the Conference sought to ensure that the amended Declaration would not impact obligations and commitments of States set out in labour provisions of free trade agreements currently in force and would not be subject to dynamic interpretation in the context of a trade dispute.

Inclusive trade is taking hold in various forms in international organizations and in the trade policy of national governments. Absent empirical evidence that will take time to generate, it can be difficult to assess the achievements of this new approach to trade. Nancy Fraser's three justice idioms provide a conceptual entry point for evaluating the potential of the inclusive trade agenda. Fraser argues that the contemporary global justice conversation must acknowledge claims for recognition, representation, and redistribution. Applying this conceptualization to the inclusive trade agenda shows that trade agreement provisions intended to favor women and Indigenous peoples go some distance in addressing claims for recognition and representation but accomplish less in remedying injustices associated with maldistribution. Therefore, the inclusive trade agenda does significantly advance global justice for marginalized groups, but works primarily in ways that are political and cultural, not economic.

The aim of this study is to analyze the different impacts of the determinants of free trade agreements (FTAs) based on the stage of the FTA discussions. By disaggregating the FTA formation process into four stages, this study finds that the influence of industry interest groups has a positive impact on FTA formation in the first stage, when two countries initiate the discussion by establishing a joint study. In contrast, it has a negative impact in the last stage, when signed FTAs need to be ratified in order to enter into force. Political institutions emphasized in the existing studies are likely to be significant in the initial stages, but lose their significance as the process moves forward. The findings of this study collectively support the hypothesis that a given FTA is the result of sectoral politics where interests and the power of industries have a significant influence on trade policy decision-making.