The Allure of Trade and Sustainable Development Chapters

Beginning in 2011, the European Union (“EU”) began to include independent Trade and Sustainable Development (“TSD”) chapters in its trade agreements. These chapters seek to protect international labor standards, environmental laws, and corporate social responsibility practices within the scope of the EU’s trade agreements. Trading states that sign onto TSD chapters are meant to engage in ongoing dialogue regarding the substantive commitments outlined in the chapters. If one of the states fails to uphold its substantive commitments, the other state may invoke a unique enforcement mechanism contained within TSD chapters. But unlike arbitration proceedings for non-TSD trade disputes, the TSD enforcement mechanism does not contain clearly spelled-out compliance measures. Instead, the gentle-appearing TSD enforcement mechanism relies on collaboration and dialogue between the trading states. Continued discussion over politically popular goals is likely in the interests of both states, but TSD chapters are uniquely beneficial to the EU’s expansion of regulatory authority. Rhetorically, TSD chapters fit within the EU’s claims of championing multilateral cooperation and upholding international law. And from a practical standpoint, TSD chapters allow the European Union to gracefully expand its trading relationships and its web of legal authority. This note examines the TSD enforcement mechanism, looking at how it differs from the enforcement mechanism for non-TSD trade disputes. Although the TSD enforcement mechanism appears weak due to its language, this note argues that the TSD chapters are quasi-enforceable and therefore a clever tool for advancing EU interests. An analysis of the 2018 EU-Korea proceedings uncovers the potential implications of TSD chapters. Notwithstanding their effectiveness in promoting their actual objectives, TSD chapters are an unsuspecting but effective method for expanding EU regulatory authority and indirect lawmaking through trade.