The European Union and its new approach to trade and sustainable development – A promising way forward?
European Union (EU) trade agreements with the following countries include rules on trade and sustainable development (TSD): Canada, Central America, Colombia, Peru, and Ecuador, Georgia, Moldova, Ukraine, and the Republic of Korea. Likewise, its trade agreements with Singapore, Viet Nam, and Japan will contain TSD provisions.
Since 2017, a heated public debate took place in Brussels about the existence of TSD chapters and whether the EU’s current approach to implementing those TSD chapters yields the results the development community hopes to see. While the discussion will likely continue, the EU Commission drew a line in summer 2018 and provided a summary of this public debate. In a nutshell, a debate showed that there are divergent views about the question whether trade sanctions should be a measure of last resort in case a party does not honour its TSD commitments and on how and by whom a complaint mechanism leading to a dispute settlement procedure should be triggered. A consensus was reached that TSD chapters are a valuable stepping stone towards the Sustainable Development Goals. They shall continue to form an important part of future EU trade agreements. Yet, their positive effects shall be more effectively and transparently communicated henceforth. And finally, the EU should step up efforts to improve the implementation and compliance with TSD commitments.
Against this background, the EU Commission pointed out that it already started taking a number of measures in line with a newly developed action plan which comprised amongst others the following actions:
- EU Member States, European Parliament and international organizations shall work together more effectively;
- Civil society shall receive a more prominent role in trade agreement monitoring and responsible business conduct shall be promoted more forcefully;
- TSD commitments shall be strengthened. Enforcement shall be designed in a more assertive way. Early ratification of core international conventions prior to a trade agreement entering into force shall be encouraged. Country priorities shall lead action throughout the process from negotiation to implementation and beyond;
- A handbook, additional resources, and regular evaluations shall upgrade the process through which the effectiveness of TSD implementation is reviewed;
- Communication of TSD related issues shall be done more effectively and transparently. TSD related submissions shall be handled with priority.
This action plan reads well but also provokes some questions, for example: Will EU Member States and international organizations sufficiently respond to the EU’s call? Will the EU Commission involve mainly the civil society in partner countries or will rather the Brussels civil society be tasked to develop European solutions to third countries’ challenges? How serious will the EU be about early ratification of core international conventions and how far would such EU requirement reduce space for trade policy to only a small number of like-minded countries? What will be done if – despite signing trade deals with ambitious TSD commitments – political will in a partner country is still lacking? And will TSD-related technical assistance be considered Aid for Trade or will separate funds be made available?
There is no doubt that the EU Commission has grown to be a vocal advocate for trade and sustainable development and that the EU Commission is indeed putting its work and funding where its mouth is. Why do skepticism and criticism then prevail among many stakeholders? The answer to this seems relatively obvious: Some stakeholders are advocating exclusively for e.g. environmental protection, fight against climate change, animal rights, public health, human rights, labour standards, civil society involvement, for sub-segments within these categories, or against land-grabbing. They feel little concerned with economic growth and the positive economic effects trade liberalization overall might have. It seems these stakeholders are hard to please unless trade policy eventually may have fully turned into for example climate, environmental, or social rights policy. Those other stakeholders who advocate for commercial and consumer interests do largely seem to recognize the importance of TSD provisions, although their main focus naturally lies on the question of trade liberalization vs. protectionist policies. The EU Commission’s Directorate General for Trade, finally, is the institution that is tasked with weighing all interests brought forward, assessing their feasibility, striking a balance, and turning them into tailored trade policies. As such, the EU Commission represents the institutionalized compromise – and is not a good compromise one that leaves all sides equally dissatisfied?