Just as with other agreements, such as CETA or the planned EU-MERCOSUR agreement, there are, from the AK’s point of view, several essential points of criticism. In their current form, the planned agreements prevent a fair globalisation policy and restrict the scope of Member States with regard to important issues of public interest. 

The investment protection agreement poses a serious threat to states

Similar to already concluded free trade agreements, the planned agreement with Vietnam also includes highly problematic privileges for companies. These can be used to sue states for their regulations, for example in important areas such as climate change and environmental protection, labour and health protection, running into millions. This creates an intransparent and expensive parallel legal system. Previous cases have clearly shown that this special suing right does not only subsequently water down necessary regulations, but even prevents them in advance (“regulatory chill”), because states want to prevent the enormous costs of arbitrations. However, at the same time it is not possible to hold these companies accountable for human rights violations or environmental damage caused by them. The agreement between the EU and Vietnam also promotes this development - to the disadvantage of people and nature. The AK therefore demands the cancellation of these privileged suing rights.

Human and environmental rights are more and more in danger

Furthermore in this case, the sustainability chapter is also not sanctionable as it is not subject to the general dispute settlement proceedings of the EU-Vietnam agreement. This affects in particular women in the Global South, who are especially affected by poor working conditions. In addition, Vietnam has only ratified six of the eight ILO Core Labour Standards. Both press freedom and trade union work is under massive pressure in Vietnam. Hence, the AK demands enforceable sustainability chapters as well as the condition that Vietnam has to ratify all Core Labour Standards in advance. Apart from that, infringements against internationally recognised labour and environmental standards have to be effectively punished by means of trade sanctions. From the AK’s point of view it is necessary to hold companies accountable: they must adhere to human rights, social and environmental standards along their entire added-value chain.

It is a basic requirement that in particular labour, environmental and consumer protection standards are excluded from a possible regulatory cooperation between the EU and Vietnam. From the AK’s perspective it must also be ensured that the precautionary principle is bindingly enshrined following to EU law, to be able to effectively protect EU citizens. According to the precautionary principle, the indication of danger is already sufficient to impose bans. This means in concrete terms that not the people affected have to prove that from a scientific perspective there is no danger for people or nature, but companies. In addition, public services, including public contracts and concessions must be fully exempt from the EU-Vietnam trade agreement. Liberalisation of essential public services through the backdoor must not be encouraged by the EU-Vietnam agreement.

What will happen now?

First, the Trade Committee of the European Parliament will vote on the present agreements between the EU and Vietnam on 21st January. In February, the plenary of the European Parliament will discuss and then vote on the agreements. If the European Parliament ratifies the trade agreement, it will relatively quickly come into force. Regarding the investment protection agreement, Member States have to give their consent. If the European Parliament does not ratify the agreements, the European Commission is obliged to make amendments.

Further information:

Letter President AK-ÖGB on the ratification of the trade agreement as well as the investment protection agreement (IPA) if the EU with Vietnam

AK EUROPA Position Paper on MIC

AK EUROPA: EU trade policy: Expectations for the new legislative period

AK EUROPA: Reorientation of trade policy? Hearing with Trade Commissioner-designate Phil Hogan