Insight
The EU should reconsider its approach to trade and sustainable development by Sam Lowe 31 October 2019
The European Parliament is pressing for the EU to withdraw trade privileges if partners breach agreed environmental and climate change standards. In return, Commission President Ursula von der Leyen has tasked Phil Hogan, the trade commissioner-designate, with using existing trade tools to “support sustainable development” and “closely monitor the implementation of climate, environmental and labour protections” in the EU’s free trade agreements (FTAs). He will also design and introduce a carbon border tax (about which I have previously written). But these steps alone might not be enough to guarantee the Parliament’s support. To build political consensus, the EU should reconsider its approach to trade and sustainable development, which currently lacks teeth. In closely defined cases, the EU should be prepared to suspend trade preferences if there is evidence of non-compliance with the sustainable development chapters of its FTAs. Trade and sustainable development in EU FTAs Since its 2009 FTA with South Korea, the EU has included trade and sustainable development (TSD) chapters in its trade agreements, committing both parties to uphold standards contained in multilateral environmental agreements such as the Paris Agreement on climate change and International Labour Organisation conventions. For example, the recently implemented Japan-EU Economic Partnership Agreement (JEEPA) contains a trade and sustainable development chapter; the EU-Canada comprehensive economic trade agreement (CETA) takes a slightly different approach and instead contains three distinct chapters covering trade and sustainable development (chapter 22), trade and labour (23), and trade and environment (24). EU TSD chapters create a monitoring committee and a consultative domestic advisory group. If either party suspects the other of breaking its TSD commitments, the EU (or its FTA partner) can initiate government-to-government consultations with a view to resolving the problem. If this fails, a panel of three independent experts can be convened (each party can appoint one person, and then they must jointly agree on a third) to determine whether a party is in breach of its obligations and suggest ways to resolve the issue. CER INSIGHT: The EU should reconsider its approach to trade and sustainable development 31 October 2019
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