On 12 February 2020, the EU Parliament voted in favour of implementing the Trade and Investment Agreement with Vietnam. The Commission promotes the Agreement by removing tax barriers, harmonising food safety and plant health standards as well as by building a stronger trade relationship between Vietnam and Europe. At the same time, the Agreement has come under heavy criticism. In a letter to MEPs, AK and ÖGB urge them to only agree to the ratification of the Agreement when certain minimum requirements have been fulfilled. These minimum standards include the basic protection of human and environmental rights as well as the prevention of special privileges for corporations. Apart from the AK, which had already pointed out these problems in the past, SPÖ-EU Head of Delegation, Andreas Schieder, too reaffirmed the ‘No’ of the SPÖ Delegation to the Agreement on Wednesday. The Investment Protection Agreement must now be ratified by national Parliaments.

The European Commission persistently points out that Vietnam - due to the (planned) ratification of the so far outstanding ILO Core Labour Standards - would be well on track and that the sustainability chapter of the Agreement (TSD - Trade and sustainable development) in respect of labour rights would be particularly wide-ranging. Concerning the ratification of ILO Core Labour Standards, parts of the S&D faction share this assessment, which is why a majority in Parliament voted in favour of the Agreement. However, in doing so they have not been able to dispel the concern of many NGOs and labour representatives that due to the lack of applicability of sanction mechanisms important issues of the sustainability chapter might not be implemented.

Confronted with these concerns, the Commission likes to refer to the mediation mechanism, which could be activated in such cases. However, the example of South Korea shows how tame this mechanism of “sanctionless dispute settlement” actually is. As a reaction to the persecution of trade unionists and the lacking implementation of promised Core Labour Standards, the Commission activated the dispute settlement mechanism at the end of 2018. To this day they have not been any results worth mentioning.

In contrast, the EBA Initiative (“Everything but Arms”) does have the option to impose trade sanctions against countries, if these attract negative attention, for example by substantially damaging the environment or because of human rights violations. A relevant example is Cambodia, where for some time the autocratic regime has been vehemently persecuting opposition politicians.

Within the scope of the EBA Initiative, the EU enables selected developing countries, to export almost all goods duty free to the European market - with the exception of weapons and munition. Cambodia is regarded as one of the top profiteers of this Initiative. As a reaction to the continuing injustices and Cambodia’s unwillingness to cooperate, the EU Commission initiated a process at the start of 2019, which culminated in the (part) abolishment of the exemption of duty for certain Cambodian products - selected clothing and shoes, travel goods and sugar among other. This step will probably also affect the about 800,000 - predominantly female - workers in the textile industry. Nevertheless, it can’t go on like this, stated the Chair of the European Parliament’s Committee on International Trade, SPD MEP Bernd Lange. “If one describes the working conditions there as early capitalist, it may still be formulated too nicely”, was his clear opinion.

Whilst the EU still acts rather hesitantly concerning the rights of people and nature, AK EUROPA together with ca. 200 European organisations, trade unions and social movements is fighting for globalisation under the banner of  global wealth and against the reckless enforcement of corporate interests. By signing the petition “Stop ISDS - Protect human rights!”, 847,000 Europeans have sent a strong signal against a parallel legal system and the unrestricted power of corporations. The campaign is aimed against the privileged remedy option of private investors through the so-called ISDS system (Investor State Dispute Settlement). This system enables internationally operating corporations - exclusively - to sue states that pass laws to the benefit of the population, which, however, are opposed the corporations’ concrete interest of profits. For example, the German State was sued by the energy company Vattenfall as a reaction to Germany’s nuclear phase-out; the French company Veolia sued Egypt because a minimum wage had been implemented. However, vice versa, it is not possible to sue companies responsible for human rights violations or environmental damage. Hence, by signing the petition 847,000 people urged the EU and national governments to completely abolish the ISDS system and instead to establish an alternative, which makes it possible to hold corporations accountable for their actions.

Further information:

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

AK EUROPA: AK criticises EU-Vietnam Trade and Investment Protection Agreement

A&W Blog: Investment protection - many open questions