Once again, there is a lot to be reported from Brussels with regard to the trade policy sector. Civil society is networking at various meetings, the Commission is calling for dialogue and Parliament is not standing still either. Apart from the negotiations with Japan, the reason for this activity was the Paper on Sustainability Chapters (TSD), which shall put the current and future orientation up to discussion, which has been announced by the Commission. Unfortunately, it still fails to deliver.
Trade and Sustainable Development Chapters often bring very little
In the meantime, the so-called Trade and Sustainable Development (TSD) Chapters have become a integral component of EU Free Trade Agreements. They define minimum standards, which are to be met by both contracting parties with regard to the environment and labour rights. However, it has been criticised by trade unions, the Chamber of Labour and civil society that these standards are very difficult to enforce as they are not subject to sanctions and that so far the dispute settlement mechanisms provided can only be initiated by one of the contracting parties. Social partners and civil society only assume a monitoring and advisory function.
During the civil society dialogue, which actually had been called to introduce a discussion paper on the current EU TSD Chapters, the Commission pointed out that the chapters on labour and environmental standards were indeed binding. However, the Commissions representative also recognised that in reality the institutional structures for such proceedings, the so-called Domestic Advisory Groups, were often difficult to establish. In many cases the contracting countries were not familiar with the institutionalised cooperation with the civil society.
Going beyond ILO Core Conventions
A further point of criticism is the fact that the labour standards integrated in TSD chapters do not go far enough. A ratification of the ILO Core Conventions only represents the absolute baseline of labour regulations. Apart from ensuring that the Core Conventions are implemented and adhered to, which is still not done by all contracting parties of the EU, more comprehensive standards should be aimed for. Apart from the Core Labour Standards the AK demands to integrate the ILO Decent Work Agenda, too. Another venture in this direction is the Model Labour Chapter for EU Trade Agreements by the Friedrich-Ebert-Stiftung (FES) which was presented on June 28 in the European Parliament in cooperation with MEP and Chairman of the Committee on International Trade, Bernd Lange. The model chapter is a draft of a legal text, which might be used as a blueprint for the implementation of labour standards in trade agreements.
Apart from the ILO Core Conventions, the CLS+ (“Core Labour Standards Plus”) also include health and safety regulations, adequate living wages and decent working conditions. Additionally, the Model Chapter provides for the integration of social partners and civil society based on more effective and reformed Domestic Advisory Groups and the Civil Society Forum and enables collective complaints procedures, which are currently not possible, even financial sanctions, if environmental and labour standards are not met.
Sanctioning or promoting?
The latter, too, are not provided for in this form in the EU approach on TSD Chapters, which is often referred to as “promotional”. Compared to this European approach, which is orientated towards cooperation and promotion, discussions often refer to the US approach as “conditional” and linked to sanctions. Due to the option of financial sanctions, as provided in the Model Chapter, the EU TSDs are approaching the US ones.
During the presentation of CLS+ at a conference in the European Parliament, in which Trade Commissioner Cecilia Malmström also participated, it became clear that little initiative will come from the Commission. On the contrary: Malmström emphasised once more that in her opinion the limits of what could be (co)negotiated in trade agreements had already been reached. However, in the case of Vietnam, a FES Study clearly shows that comprehensive and sanctionable labour standards in trade agreements would be necessary, as trade is increasingly taking place along the value-added chain. Investigations on Vietnam showed that multinational companies, in particular compared to former state-owned Vietnamese suppliers and companies, were using their market power to enforce lower wages and poor labour conditions.