Free trade agreements struggle to convince on social, environmental standards

shutterstock_447940765 [Sehenswerk/Shutterstock]

There are real concerns about the lowering of social and environmental standards in free trade agreements, and NGOs and economists point out the lack of binding control mechanisms in trade deals. EURACTIV.fr reports.

The EU’s trade agreement agenda seems to be speeding up: the CETA (EU agreement with Canada) was partially implemented in September 2017, and Japan and the EU announced in December that they had finalised their negotiations.

However, there are still many concerns over these “new generation” agreements, which aim for lower customs tariffs and harmonising standards, so as to limit non-tariff barriers.

A non-binding chapter of sustainable development

As of 2015, the European Commission tried to calm those concerns by highlighting in its “Trade for all” strategy that it would encourage the inclusion of a chapter on sustainable development in its trade agreements.

In fact, the agreements currently under negotiation refer to international conventions and texts on the protection of the environment and workers’ rights. For example, the JEFTA (EU agreement with Japan) refers to the Paris Climate Agreement.

In a follow-up report published in November, the Commission points out that free-trade agreements have already pointed to positive effects, such as encouraging a better application of ILO conventions in partner countries.

Calls grow for ‘green clause’ in EU trade deals

There is widespread consensus on the need to level the playing field for European companies confronted with environmental and social dumping from foreign competitors. Just how hard the EU should hit on wrongdoers remains a major sticking point, however.

However, for many NGOs such as Foodwatch, the guarantees are not enough. In a report published in early February, Foodwatch points out that the provisions on sustainable development and the precautionary principle are included in the “Trade and Sustainable Development” chapter (without binding control mechanisms).

However, the binding chapters called TBT (Technical Barriers to Trade) and SPS (Sanitary and Phytosanitary) do not mention sustainable development or the precautionary principle.

“These chapters refer to the WTO rules, but the WTO does not guarantee the precautionary principle,” Karine Jacquemart, the head of the NGO, told a conference at the Printemps de l’Economie on 20 March.

Uncertainty over control mechanisms

The Commission points out that guarantees exist in the agreements to monitor compliance with the international commitments to which they refer. The agreement provides for a “Committee on sustainable development” to examine issues over the “Trade and Sustainable Development” chapter.

In case of disagreements between states over these issues, a dispute resolution mechanism allows for the establishment of a panel of experts. The Commission also relies on the monitoring by civil society via a forum composed of civil society representatives.

However, according to a report on CETA commissioned by the French government and published last September by an independent committee, there are still some uncertainties over the scope of these mechanisms.

According to the independent committee, the CETA remains silent on the “way in which the Committee on Sustainable Development can come up with a solution that benefits all contracting parties”.

The report also highlights that the expert panel’s recommendations are not binding, but could have an impact as it is made public. For the civil society forum, the committee finds it “regrettable that the agreement does not specify how the assessments made could be taken into account in order to (…) better adapt the agreement to the objective of sustainable development”.

However, contrary to Foodwatch, the report believes that the precautionary principle is applied in the CETA although “the lack of explicit citation of the term (…) creates uncertainty over the possible contestation by Canada”.

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Possible Improvements

According to the economist Catherine Schubert, these shortcomings do not mean that CETA and new generation agreements should be abandoned. “It is possible to find concrete steps to take to advance in the approach of these treaties”, she said.

The independent committee also put forward proposals for improvement, such as setting up a monitoring committee at the national level.

“A Political Tool”

The head of the Brussels office of the Robert Schuman Foundation, Charles de Marcilly, pointed out that the EU is often the strong part of these agreements, which allows it to impose its standards.

“The EU represents a market of more than 500 million consumers. It is a form of attraction and other parties are ready to make concessions to have access to such a market”.

For the researcher, free trade agreements are therefore a “political tool to put forward our preferences” against other global powers like China.

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