Sustainable Development and Regional Trade Agreements: Toward Better Practices in Impact Assessments

1. INTRODUCTION 1.1 Research Methodology and Outline 2. BACKGROUND: SUSTAINABLE DEVELOPMENT IN REGIONAL TRADE AGREEMENTS AND THE RISE OF THE IMPACT ASSESSMENT 2.1 International Law on Sustainable Development 2.2 Free Trade and its Impacts: The Decline of the Kuznets Curve? 2.3 The Rise of the Impact Assessments 3. ASSESSING EXISTING PRACTICES: SUSTAINABLE AND ENVIRONMENTAL IMPACT ASSESSMENTS COMPARED 3.1 Background and Context 3.1.1 CKFTA Environmental Impact Assessment 3.1.2 KORUS Environmental Impact Assessment 3.1.3 EU-Korea FTA Sustainability Impact Assessment 3.2 Regulatory Impacts 3.2.1 Regulatory Impacts of the CKFTA 3.2.2 Regulatory Impacts of the KORUS 3.2.3 Regulatory Impacts of the EU-Korea FTA 3.3 Material Impacts 3.3.1 Material Impacts of the CKFTA 3.3.2 Material Impacts of the KORUS 3.3.3 Material Impacts of the EU-Korea FTA 3.4 Integration Impacts 3.4.1 Integration Impacts of the CKFTA 3.4.2 Integration Impacts of the KORUS 3.4.3 Integration Impacts of the EU-Korea FTA 3.5 Summary of Korean Impact Assessments 4. LEARNING FROM IMPACT ASSESSMENTS: EFFECTS ON TRADE AGREEMENTS 4.1 Sustainable Development in the CKFTA 4.2 Sustainable Development in the KORUS 4.3 Sustainable Development in the EU-Korea FTA 5. CONCLUSIONS Impact assessments form part of the preparatory works for the regional trade agreements (RTAs) concluded by the European Union (EU), the United States, and Canada. The EU, pursuant to a 2002 communication of the European Commission and related guidelines, employs a sustainability impact assessment procedure (SIA). (1) The SIAs take place both before and during the trade negotiation process and aim to identify the potential economic, social, and environmental impacts of the RTA. The SIA process explicitly examines impacts not only in the EU, but also in the counterpart state. The United States (as introduced by Executive Order 13141 in 1999 and reaffirmed by Executive Order 13277 and the Trade Act of 2002) (2) and Canada (as per a cabinet directive) (3) carry out an environmental review or environmental impact assessment (EIA) prior to concluding RTAs. The EIAs are meant to cover domestic effects and focus on environmental issues. This article aims at examining in a comparative manner the SIAs and EIAs conducted by the EU, the United States, and Canada in order to assess their effectiveness in promoting the integration of sustainable development into RTAs. This article will argue that the SIA process results in a more effective identification of the impacts of RTAs in comparison to the EIA process, and has a greater influence on trade negotiations. States, starting with the United States and Canada, should therefore shift to an SIA methodology. 1.1 Research Methodology and Outline Two aspects are important in terms of research methodology. First, the essay adopts a case study approach, focusing on the impact assessments of the separate RTAs between South Korea (Korea) and the EU, the United States, and Canada, respectively. Korea was chosen as a focus point as it is an important trading partner for the three countries and the impact assessment processes are all relatively recent. The US-South Korea Free Trade Agreement (KORUS) was signed on 30 June 2007 with new agreements on 3 December 2010. (4) The EU-South Korea Free Trade Agreement (EU-Korea FTA) was signed on 6 October 2010 and has been provisionally applied since 1 July 2011. (5) The Canada-Korea Free Trade Agreement ('CKFTA) is still under negotiation, though an interim EIA process has been completed. (6) Where relevant this paper will also reference impact assessments from other RTAs. Second, this paper will adopt an analytical framework based on three key tensions for sustainable development identified in RTAs: 1) RTAs can constrain domestic law and policy initiatives aimed at promoting sustainable development and/or can conflict with international commitments to promote sustainable development (regulatory effects); 2) RTAs can exacerbate pre-existing social, environmental or economic problems at the domestic level (material effects); or 3) RTAs can promote growth in unsustainable economic sectors (integration effects). …

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