FTA with Republic of Korea possibly invalid

A brief recap: in the 10th chapter of the trade agreement negotiated between the Republic of Korea and the European Union between 2007 and 2009, articles 62-64, a literal recital of European legislation (more specifically 2000/31/EC on electronic commerce) minus half of an introductory paragraph (number 43) makes it uncertain whether or not the trade agreement will have an impact on the interpretation of European Union law. Apparently there are similar concerns in the Republic of Korea, although in Korea activists have dug up discrepancies between the Korean and the English versions of the final agreement that have now led to the text of the agreement having to be revisited.

Geraldine Juarez recently made an an interview with me on alt1040.org about free trade agreements, ACTA and for me the most important part is probably bilateral free trade agreements. Now I am reached by the news that the free trade agreement (bilateral) concluded between the European Union and the Republic of Korea last year, and recently approved by the European Parliament has encountered yet another hurdle when the Korean government discovered a discrepancy between the English and the Korean texts. Therefore the request for parliamentary approval in ROK has had to be withdrawn and the government will now have to sort out this discrepancy before the ratification can move any further.

The flawed text in question appears to be a missing ”as it existed immediately before amended” in the Korean version. It is present in both the Korean and English reservations in the English language version, and concerns the parties’ bilateral or plurilateral preferential arrangements outside of the treaty. What it says explicitly is that, of course, such preferential agreements and clauses therein must be in compliance with the Most Favoured Nation provisions of the World Trade Organisation pillar agreements. Interestingly, the European Union has several such preferential agreements in place with former colonial states, among which are included several African countries, that are thus far not renegotiated in full.

The full text of the provision is

The European Union may amend any measure only to the extent that the amendment does not decrease the conformity of the measure, as it existed immediately before the amendment, with obligations to market access, national treatment and most-favoured-nation in these economic integration agreements.

Given that the preferential agreements do not conform with those principles to begin with, as is established three times by WTO arbitration panels, does this provision hold any meaning? Especially as it applied to ”all countries”? What does it insinuate with regards to EPAs with African countries or Pacific countries, the renegotiation of which the European Union has been unsuccessful for the past 16 years?

Another objection from the ROK activists is that the safeguards to the treaty approved by the European Parliament in the same sitting may not be in compliance with international law. As always, and as with Korean agreements with the United States, it is the Korean automobile industry that is the target of protectionist measures from the two largest economies in the world. For the European Union, it is said, the potential non-compliance of these safe-guards may not be a problem since the agreement will ultimately fall under national legislations rather than EU legislation (although, to my best of knowledge, this must surely amount to the same thing? If the European Court of Justice gives a verdict based on the provisions of the agreement or a decision following the Commission, this is immediately applicable in all member states and any fallacy instated by the Union is therefore applied in all member states as soon as the European Parliament and the Commission decide to act on a whim). In South Korea, a trade agreement falls immediately on top of national legislation, in most member states of the Union, having dualistic legal systems, this is not the case. Except in the Netherlands. Are the safeguards compliant with Dutch law in relation to Dutch international obligations? That is up for someone to determine who holds more knowledge on Dutch legislation than me.

Interestingly, the Swedish car of the populace Volvo is a luxury car in both Argentina as well as in China.

More about free trade agreements, and specifically the South Korean free trade agreements on this blog:

Exporting legislation: democracy disabled [2010-01-14]

757 (I probably indended for this post to have the title Canadian CETA and South Korean FTA set precedent for ACTA) [2010-01-15]

Insidious trade agreements afoot [2010-01-18]

Rigid laws are a problem for everyone (on rigid international frameworks for intellectual property rights), [2010-01-19]

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