{"id":7228,"date":"2022-10-27T16:38:40","date_gmt":"2022-10-27T15:38:40","guid":{"rendered":"https:\/\/blogs.sussex.ac.uk\/uktpo\/?p=7228"},"modified":"2022-10-27T16:44:18","modified_gmt":"2022-10-27T15:44:18","slug":"the-eus-proposed-reforms-to-trade-and-sustainable-development-chapters-a-big-change-or-more-of-the-same","status":"publish","type":"post","link":"https:\/\/blogs.sussex.ac.uk\/uktpo\/2022\/10\/27\/the-eus-proposed-reforms-to-trade-and-sustainable-development-chapters-a-big-change-or-more-of-the-same\/","title":{"rendered":"The EU\u2019s proposed reforms to Trade and Sustainable Development chapters: a big change, or more of the same?"},"content":{"rendered":"Share this article: <\/em> \"Facebook\"<\/a>\"twitter\"<\/a>\"reddit\"<\/a>\"pinterest\"<\/a>\"linkedin\"<\/a>\"mail\"<\/a>\n

<\/p>\n\n\n

\"\"27 October 2022<\/em><\/p>\n

Camille Vallier is a Fellow of the UK Trade Policy Observatory and Research Fellow in Trade and Sustainable Law at the School of Law, Politics and Sociology, University of Sussex. This blog was originally published by Trade 4 Sustainable Development<\/a>.<\/em><\/p>\n

After having defended a sustainable development approach to trade based on cooperation and dialogue for the past decade, the European Union (EU) announced in June 2022 its intention to tighten its approach. The recent Communication \u201cThe power of trade partnership: together for green and just economic growth<\/a>\u201d presents the EU\u2019s new strategy, which, among other measures, plans to extend the general state to state dispute settlement mechanism to the TSD chapter and to include the possibility of trade sanctions for non-compliance with certain provisions of the TSD chapter. These new measures have been adopted in response to a long-lasting observation that the current system does not enable a full and satisfying implementation and enforcement of sustainability provisions.<\/p>\n

\u00a0<\/h4>\n

Using FTAs to achieve sustainable development<\/strong><\/h4>\n

The EU affirmed on different occasions its intention to use trade policy as a tool to meet the\u00a02030 Sustainable Development Goals (SDGs)<\/a>. In 2018, the European Economic and Social Committee stated that \u201cTSD chapters play a crucial role in achieving (\u2026) values similar to those that we recognise as \u201cEU values\u201d, including social, consumer and environmental standards and cultural diversity, and to make the public face of the EU visible in those countries, as well as providing an important platform to monitor commitments to human, labour and environmental rights in trade agreements\u201d.<\/p>\n

\n

Since the adoption of the Treaty of Lisbon, which requires the common trade policy to be guided by the core values of the EU, including Sustainable Development (art. 11 and art. 205 TFEU), the EU consistently includes sustainability provisions within its new bilateral trade agreements. These \u201cnew generation\u201d free trade agreements (FTAs) all include a specific Trade and Sustainable Development (TSD) chapter, which is based on three pillars: binding commitments in terms of labour and environmental standards, structures to involve civil society organisations, and a dedicated dispute settlement mechanism.\u00a0<\/p>\n

Indeed, the European Union opted for an enforcement and implementation model based on dialogue, cooperation and monitoring. The violation of TSD chapters is not subject to sanctions or to the general dispute settlement mechanism, such that non-compliance is not linked to economic consequences. In case of disagreement, the Parties must find a mutually satisfactory solution in the context of governmental consultations. If this collaborative mechanism is not sufficient to solve the issue at stake, both Parties can refer the matter to the Committee on Trade and Sustainable Development, and, subsequently to the Panel of Experts, which will issue public reports and make recommendations on the matter.<\/p>\n

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Criticism of the EU\u2019s approach<\/strong><\/h4>\n

The EU\u2019s \u201csoft approach\u201d often draws criticism, and EU sustainability provisions are seen by many as lacking effectiveness due to their weak enforcement. In a 2018 \u2018non-paper\u2019<\/a>\u00a0the European Commission\u2019s services recognised that the implementation of the TSD Chapters should be improved and dressed a list of 15 \u201cconcrete and practicable\u201d actions \u2013 divided under four broad headings (Working together; Enabling Civil Society, including social partners, to play a greater role in implementation; Delivering; Transparency and Communication) \u2013 to reinforce collaboration with partner-countries, and to enable civil society to play their role in the implementation process. A EUR 3 million project to support civil society participation was launched as a result of this report, which also suggested extending the scope of civil society participation to the whole FTA in future agreements. However, the report concluded that \u201cthe absence of consensus on a sanctions-based model makes it impossible to move to such an approach\u201d.\u00a0<\/p>\n

Despite having affirmed in 2018 that the adoption of sanctions was not a realistic strategy, the European Commission reconsidered its position in its 2022 Communication \u201cThe power of trade partnership: together for green and just economic growth<\/a>\u201d. Among other measures, the Commission suggests extending the general state to state dispute settlement mechanism to the TSD chapter. It also commits to including an option of applying trade sanctions if Parties fail to comply with core provisions of the ILO or implement the Paris Agreement. \u00a0<\/p>\n

This new development is particularly interesting in the current circumstances. While trade is increasingly seen as a tool to foster sustainable development in a context of climate crisis and environmental degradation, a growing consensus shows that the EU\u2019s current approach does not prove effective in reaching its objectives. The 2022 action-plan is the\u00a0result of a public consultation<\/a>, which showed that most stakeholders were unsatisfied with the implementation and enforcement of TSD chapters, and that most NGOs and trade unions, a minority of business associations, and half of public authorities who responded to the survey supported trade sanctions. \u00a0<\/p>\n

\u00a0<\/h4>\n

What will the reform proposals mean in practice?<\/h4>\n

The use of sanctions and the extension of the general dispute settlement mechanism to TSD chapters should not be overstated, for two reasons. First, experience shows that event though sanctions constitute an interesting leverage tool, they are rarely used, even when they are provided for by a free trade agreement. For example, in the US, which famously requires FTA partners to agree \u2018non-regression\u2019 commitments to enforce enviromental laws which are tied to sanctions,\u00a0only one such dispute has taken place<\/a>, on labour standards.\u00a0<\/p>\n

Second, the new EU action-plan, which \u201ccomplement[s] and expand[s] the action areas identified in the [2018] 15 Point Action Plan\u201d, is based on six priority areas: the need to be more proactive in the cooperation with partners, stepping up the country specific approach, mainstreaming sustainability beyond the TSD chapter of trade agreements, increasing the monitoring of the implementation of TSD commitments, reinforcing the role of civil society and enhancing enforcement by means of trade sanctions as a measure of last resort. As a result, the EU\u2019s approach will remain decisively based on cooperation and dialogue, and sanctions will only be complementary, as advocated by most commentators.<\/p>\n

The fact that the EU has recognized the shortcomings of its cooperative approach is positive. The proposed reforms clearly respond to concerns raised by stakeholders about the fact that cooperation mechanisms have sometimes felt like an afterthought \u2013 or not responded effectively to the specific issues with labour and environmental standards in a\u00a0particular national context<\/a>. As part of our Trade4SD project,\u00a0THE ROLE OF WTO, AND EU BILATERAL AND REGIONAL TRADE AGREEMENT TO MEET SDGS: GAPS AND BEST PRACTICES<\/a>, we will examine the practical implication of EU FTA provisions on sustainability by interviewing key stakeholders in VietNam, Ghana and Tunisia. In so doing we will help build an an evidence base for understanding and improving how sustainability issues resulting from FTAs are identified, how they are responded to through specific FTA obligations, and, crucially, how these obligations are actually implemented in practice. We hope that this research can inform an approach to trade and sustainable development that is responsive and effective.<\/p>\n

Disclaimer:<\/em>
This blog was originally published by Trade 4 Sustainable Development<\/a>. Opinions expressed in this blog are those of the authors alone and do not necessarily represent the opinions of the University of Sussex, UK Trade Policy Observatory or Centre for Inclusive Trade Policy.\u00a0<\/em><\/p>\n

Republishing guidelines:<\/em>
The UK Trade Policy Observatory\u00a0believes in the free flow of information and encourages readers to cite our materials, providing due acknowledgement.\u00a0For online use, this should be a link to the original resource on our website. We do not publish under a Creative Commons\u00a0license. This means you CANNOT republish our articles online or in print for free.<\/em><\/p>\n

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Share this article: 27 October 2022 Camille Vallier is a Fellow of the UK Trade Policy Observatory and Research Fellow in Trade and Sustainable Law at the School of Law, Politics and Sociology, University of Sussex. This blog was originally published by Trade 4 Sustainable Development. After having defended a sustainable development approach to trade based on cooperation and dialogue for the past decade, the European Union (EU) announced in June 2022 its intention to tighten its approach. The recent Communication \u201cThe power of trade partnership: together for green and just economic growth\u201d presents the EU\u2019s new strategy, which, among other measures, plans to extend the general state to state dispute settlement mechanism to the TSD chapter and to include the possibility of trade sanctions for non-compliance with certain provisions of the TSD chapter. These new measures have been adopted in response to a long-lasting observation that the current system… Read More<\/a><\/p>\n","protected":false},"author":378,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[130195],"tags":[147983,125770,19509,123596,96136,147861,147883,123553,43416,147882,123591,123581,123630,147862,123281],"_links":{"self":[{"href":"https:\/\/blogs.sussex.ac.uk\/uktpo\/wp-json\/wp\/v2\/posts\/7228"}],"collection":[{"href":"https:\/\/blogs.sussex.ac.uk\/uktpo\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blogs.sussex.ac.uk\/uktpo\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blogs.sussex.ac.uk\/uktpo\/wp-json\/wp\/v2\/users\/378"}],"replies":[{"embeddable":true,"href":"https:\/\/blogs.sussex.ac.uk\/uktpo\/wp-json\/wp\/v2\/comments?post=7228"}],"version-history":[{"count":3,"href":"https:\/\/blogs.sussex.ac.uk\/uktpo\/wp-json\/wp\/v2\/posts\/7228\/revisions"}],"predecessor-version":[{"id":7232,"href":"https:\/\/blogs.sussex.ac.uk\/uktpo\/wp-json\/wp\/v2\/posts\/7228\/revisions\/7232"}],"wp:attachment":[{"href":"https:\/\/blogs.sussex.ac.uk\/uktpo\/wp-json\/wp\/v2\/media?parent=7228"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blogs.sussex.ac.uk\/uktpo\/wp-json\/wp\/v2\/categories?post=7228"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blogs.sussex.ac.uk\/uktpo\/wp-json\/wp\/v2\/tags?post=7228"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}