Many EU trade agreements contain separate sustainability chapters, which address the Fundamental ILO Conventions (International Labour Organisation) and multilateral environmental agreements, such as the Paris Climate Agreement. However, due to their non-binding nature, they have so far not been able to contribute to improving labour and environmental standards. A 15-point Action Plan, whose early effectiveness review resulted in the Communication on the power of trade partnerships serves as an important guide for the practical enforcement of the sustainable development chapters.

Important components of the new TSD approach

The new elements of the TSD (Trade and Sustainable Development) approach include among other special targets and roadmaps, which are geared towards the respective partner country and whose objective is to increase the effectiveness of the regulations. Based on this approach, the different initial conditions of countries or regions shall be taken into greater consideration than before. Apart from that, not only the cooperation with trade partners shall be strengthened by intensified cooperation processes, the individual Member States and the EU Parliament shall be increasingly involved in monitoring and implanting the obligations. With regard to the role of civil society, the EU Commission facilitates the lodging of complaints due to infringements against the sustainability chapters.

The most important aspect of the new TSD approach is the option to impose trade sanctions in case of significant infringements against the Paris Climate Agreement or the Fundamental ILO Principles. In the event that essential provisions of these two international agreements are not being observed,  the most severe counter measures available can be applied in form of sanctions as a last resort.

Optimisation requirements from AK’s point of view

AK welcomes the Communication of the EU Commission and the intention to critically reflect the current access to sustainability chapters in EU trade agreements. There are indeed improvements to be endorsed. Nevertheless, in view of the enormous environmental and social challenges, the proposals still leave something to be desired.

AK criticises in particular that all existing EU trade agreements remain unaffected by the new TSD approach and that it will only apply to future agreements. This cements the negative consequences of European trade policy in recent years, which did not succeed in compensating social and environmental upheavals. Whilst the focus had been and still is on investor interests, appropriate standards were neither demanded in respect of working conditions nor in respect of environmental protection, which would be necessary for a social and just global economy.

With reference to the new option of imposing trade sanctions as ultima ratio, it is also difficult to understand why these apply only to serious infringements against ILO Standards and the Paris Climate Agreement. In particular the ILO Core Labour Standards represent a minimum level of very basic labour protection, to which no severity code regarding infringements applies. From AK’s point of view, the mandatory ratification of the ten ILO Core Labour Standards by all contracting parties is quite generally the condition for starting trade agreement negotiations.

Given the fact that the European Commission has so far failed to include the damaging environmental and climate-related consequences caused by trade and international goods transport in its considerations, urgent need for action is more important than ever.

Further information:

AK EUROPA Position Paper: The power of trade partnerships: together for green and just economic growth

European Commission: Commission unveils new approach to trade agreements to promote green and just growth

European Comission: Communication on “The power of trade partnerships: together for green and just economic growth”

Council of the European Union: Council Conclusions on the Trade and Sustainability Review