Publication Date



[Excerpt] The KORUS FTA State-State dispute settlement mechanism differs from most earlier U.S. FTAs in that it applies to all obligations contained in the labor and environmental chapters of the KORUS FTA instead of only domestic labor or environmental law enforcement obligations. In addition, in the event a Party is found to be in breach of one of these obligations and has not complied, the prevailing Party may impose trade sanctions instead of, as under earlier agreements, being limited to requesting that a fine be imposed on the non-complying Party with the funds to be expended for labor or environmental initiatives in that Party’s territory. The changes stem from a bipartisan understanding on trade policy between congressional leaders and the George W. Bush Administration finalized on May 10, 2007, setting out provisions that were to be added to completed or substantially completed FTAs pending at the time. Among the aims of the understanding was to expand and further integrate labor and environmental obligations into the U.S. FTA structure. The same approach to labor and environmental disputes is found in FTAs entered into with Colombia and Panama, each of which continue to await congressional approval,and in the U.S.-Peru Trade Promotion Agreement, which entered into force in 2009.


Suggested Citation

Grimmett, J. J. (2011). Dispute Settlement in the Proposed U.S.-South Korea Free Trade Agreement (KORUS FTA) [Electronic version]. Washington, DC: Congressional Research Service.