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A step in the right direction

25 April 2022

A step in the right direction

The EU’s climate and human rights ambitions have long been thwarted by its free trade policies. The Commission is now showing signs of rectifying this, but it has some way to go say eight leading NGOs.

Until now, there has been a jarring disconnect between the EU’s noble ambitions to protect the planet and uphold labour and human rights, and its free trade policy. The EU’s Free Trade Agreements (FTAs) imperil its goal of global leadership on climate, sustainable development, labour and human rights.

Particularly controversial for example, is the FTA the EU concluded in 2019 with the Mercosur bloc (Brazil, Argentina, Uruguay and Paraguay). Among other things, the agreement is likely to exacerbate the deforestation and land grabbing which have often accompanied agricultural expansion in the Amazon rainforest and the tropical savannah of the Cerrado. Egregiously - as the EU Ombudsman found - a proper sustainability impact assessment wasn’t completed before the deal was agreed.

The Trade and Sustainable Development (TSD) chapters contained in the EU’s FTAs are meant to stop free trade deals damaging people and the environment. They commit the parties to respect international rules and standards on labour rights and environmental protection.

Welcome initiative

Under pressure from civil society groups and others, the European Commission launched a consultation to review its TSD chapters, which is expected to be published in June. Last month Sabine Weyand, Director-General of the European Commissions’ Directorate-General for Trade, gave a foretaste of the revised EU TSD chapters.

She signalled that the new chapters could include sanction-based environmental and labour provisions, and that they will be tailored to each trading partner, meaning the chapter with India, for instance, will be different than the one with New Zealand.

We welcome the initiative. The new approach will provide a space for labour rights and environmental standards to be pursued more assertively, and align the EU’s trade policy with the European Green Deal, rather than harm it. It will strengthen EU trade policies’ legitimacy and accountability, and ensure that trade helps countries achieve sustainable development, rather than inhibiting it.

The Commission is finally heeding concerns raised by NGOs, trade unions, the European Parliament and even some EU Member States. In 2020, France and the Netherlands, for example, proposed in a non-paper that trade benefits could be withdrawn in the event of a breach of TSD provisions.

Political Will

Until now, the language of the TSD chapters in the EU’s trade deals is too evasive, and their enforcement mechanisms too weak.  For the TSD chapters to be effective, sustainability obligations must be specific and actionable.

Obligations should be tailored and strategically chosen based on the findings of sustainability and human rights impact assessments. They should also be tailored to the countries the trade deals are with.

It is also imperative that such impact assessments are conducted transparently, inclusively – in due time and involving the civil society from the EU and the partner country. The negotiating parties should also be in position to demonstrate how the impact assessment informed their negotiations.

Furthermore, at present the current language of TSD commitments does not help easy submissions alleging TSD breaches in partner countries. It is worth noting that not one civil society organisation has used the single-entry point (the first point of contact within DG Trade to deal with complaints) to launch a complaint on TSD issues. This is not because there are no issues to raise, but because the TSD Chapter’s vague language discourages submissions.  This is particularly true for its environmental provisions. The more detailed the provisions, the more effectively and promptly a Party’s breach of a specific obligation can be addressed.

EU trade agreements also tend to adopt a soft approach to enforcing sustainability provisions, contrary to trade provisions that benefit from a strong enforcement mechanism. However, sustainability provisions deserve an equally effective and robust dispute settlement mechanism to ensure effective compliance. Importantly, the report of the Panel of Experts has no teeth in the absence of political willingness. Providing for the possibility of sanctions as a last resort would help to give the TSD provisions real bite.

Ultimately, trade must be at the service of the EU’s transition towards a greener, fairer economy. Without a clear vision from our decision-makers on how international trade can operate within the limits of our planet’s boundaries,  people, animals, and the planet will continue to pay a heavy price.  

The EU therefore has a clear choice: to have free trade agreements which promote sustainable development, protect the environment and support labour and human rights, or deals which undermine these things.

ClientEarth, Fern, Fair Trade Advocacy Office (FTAO), IndustriAll Europe, TSD platform, International Trade Union Confederation (ITUC), International Federation for Human Rights (FIDH) and Eurogroup for Animals.

Categories: News, Free Trade Agreements

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