From ‘liberalise and patronise’ to a genuine sustainable trade strategy for the EU

DISCLAIMER: All opinions in this column reflect the views of the author(s), not of EURACTIV.COM Ltd.

The EU must focus on a sustainable trade policy, writes Jude Kirton-Darling. [Roman Pilipey/EPA/EFE]

The next European Commission must revamp its trade policy for the next five years to focus on sustainability, writes Jude Kirton-Darling.

Jude Kirton-Darling is a Socialist and Democrat MEP and a member of the European Parliament’s International Trade committee.

We still have four months to go before the new European Commission is appointed, but officials at DG Trade – the institutions’ arm responsible for conducting the EU’s international trade policy – would do well to reflect on the European election results.

The European Parliament’s champions of free trade – a block comprised of the EPP, ALDE and ECR groups – has lost 15 seats and is now 29 seats short of a majority. Meanwhile, groups that are staunchly hostile to trade deals – the GUE, ENF and EFDD groups – have gained 20 seats.

This new set up could make matters difficult for the Commission if it stays on the same track.

The previous mandate saw the conclusion of many trade deals, including landmark agreements such as CETA or the Economic Partnership Agreement with Japan. Less publicised but nonetheless crucial, a raft of negotiations with African, Caribbean and Pacific countries were also revived during that period.

Opposition to this agenda led the Commission to revamp its communication strategy, with a series of papers announcing a joyous globalisation in the future, from the “trade for all” strategy to the “harnessing globalisation” communication. Promises were made to rebalance trade deals away from the interest of multinationals and towards people and the planet. But these were not followed through. Specific demands from Parliament, for instance on the TiSA negotiations or calling for a mandatory due diligence system, were dismissed. The Commission strategy for 2014-2019 amounted to little more than liberalise and patronise.

This will not do anymore because the debate has moved on. The archaic positioning of free traders vs. protectionists simply does not reflect the politics of the European Parliament any longer, if it ever did.

It might have suited the Commission to resort to such categorisation in the past, to marginalise criticism and solidify its powerbase in Parliament, but with support for its agenda dwindling this could seriously backfire. The Commission’s if you’re not with us, you’re against us approach now carries a real risk of encouraging the formation of a protectionist majority in the European Parliament.

A better way to consider the new politics of Europe on trade starts with recognising that voices asking for greater sustainability have become louder, with MEPs increasingly concerned with the actual parameters of globalisation rather than a futile academic debate on the merits of global trade.

Table human rights due diligence law, MEPs tell Commission

MEPs have launched ambitious plans for an EU law requiring companies to carry out human rights due diligence in their supply chains.

Achieving sustainability requires first and foremost recognising that second generation trade agreements have resulted in shifting important policy decisions from the national or European level to the international level. Important matters such as food standards or public services are now discussed during trade negotiations.

These discussions will remain undemocratic unless proper accountability and legitimacy is brought to the process. Commissioner Malmström initiated a positive agenda in the previous term around transparency, but this is just a start. The next Commission will have to do more towards MEPs and civil society than simply listen and explain: it will have to learn to follow the will of the people and its representatives in Parliament.

Sustainability also requires coherence. It makes little or no sense to promote transition to a zero carbon economy internally while pursuing an ever-growing volume of exports and imports. For too long, the EU’s approach has been dominated by price only: always buy the cheapest, no matter what. This is the very definition of an unsustainable strategy, because carbon has a cost and so does poverty. There are no solutions to pressing problems such as the climate crisis, migration or conflicts that do not entail profound changes to the way global trade works.

A window was open in 2014 to allow local sourcing in procurement. Now is the time to push the door wide open to sustainability concerns in public contracts, to impose on all contracting authorities in the EU respect for social and environmental conditions.

Such social and environmental criteria also apply to part of the EU’s trade, at least in principle, in particular when it comes to exchanges with developing countries or in the frame of the latest trade agreements which contain a ‘Trade and Sustainable Development’ chapter (TSD).

But these provisions have no teeth in most cases, and when they do – like in the GSP + scheme with least developed countries – the Commission always fails to bite. This must stop: if we are serious about sustainable development then bad behaviour must be met with sanctions. For DG Trade to put its money where its mouth is means making it clear to the rest of the world that accessing the EU market is a privilege reserved to those who ensure decent work and preserve the environment.

It does not help that the main advocates for business as usual are not dodgy exporters in distant countries, but EU based multinationals.

Back in the 1990s when “global value chains” were still simply known as offshoring, multinationals were exposed for moving jobs where wages are the lowest. This hasn’t stopped, but in our current phase of capitalism companies are increasingly going global to escape their liability: the further down you go on the supply chain, the further away you are from the need to appear as a decent, sustainable, consumer-oriented company.

Companies will support EU law on due diligence, but need assurances on liability

Companies will support EU law on human rights due diligence, but want assurances that it will not expose them to increased risk of lawsuits, argues Virginie Mahin.

Making EU companies liable for their suppliers, and their suppliers’ suppliers, is an absolute necessity if we want to put an end to the exploitation of people and the planet. This is particularly relevant in the garment sector. Over the past five years, MEPs have called for a reporting system to provide full transparency on product value chains and demanded legislation to create binding due diligence obligations for supply chains in the garment sector. The Commission responded by launching the “garment initiative”, which is yet to produce any concrete outcome. As a token of good will from the Commission, DG Trade’s first policy announcement come November must be a draft law on the garment sector.

Making trade sustainable requires standing up to the vested interest of multinationals. It requires setting up clear standards and creating obligations. If the European Commission chose to engage sincerely on that path, it will garner wide support in Parliament and beyond.

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