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European Trade policy – Wrangling over the enforceability of employment rights

The strategy of the European Commission with regard to trade policy in recent years has been geared towards the bilateral finalisation of free trade agreements. It uses every opportunity to emphasise the economic benefits of these agreements. This finds its expression in discussions in the European Parliament, in its current work programme or in the dialogue with NGOs. Little attention though is paid to labour, social and environmental standards. The Commission has to deal with this issue and would be well advised to listen to the concerns of trade unions and civil society!

The so-called sustainability chapter has increasingly found its place in EU trade agreements. Apart from a vast number of provisions regarding tariffs, investments and adjustments of standards, the sustainability chapters of more recent EU trade agreements also deal with issues such as social and environmental standards, corporate social responsibility or the integration of the civil society.

The publicised objective of the European Commission is free and above all fair trade, which shall be achieved by adding sustainability chapters (TSD) to EU trade agreements. However, if one takes a closer look, these chapters lose a great deal of relevance and often give the impression of lip service, which is applied to calm the minds of civil society organisations.

Most evident is the criticism in respect of three points. These concern the options to impose sanctions in case regulations are infringed, the small scope of the sustainability chapters and the obviously weak design of the chapter. The latter for example manifests itself with regard to the regulations concerning the eight ILO Core Labour Standards. Even though, according to the text of the contract, both parties guarantee to observe, enforce and implement the Core Labour Standards, the actual ratification and effective implementation are being ignored. The EU trade agreement with the Republic of Korea, which has been in force since 2011, shows the toothlessness of the sustainability chapter in its current form. To this day, the Republic of Korea has still not yet ratified four of the eight ILO Core Labour Standards, among them the Freedom of Association and the right to collective agreement negotiations. This unacceptable condition is made clear by the continuous prosecution of trade unionists. Hence, a key demand from the point of view of employees is the ratification and implementation of all ILO Core Labour Standards as a precondition for entering into trade negotiations between the EU and third countries.

The second point concerns the small scope of the sustainability chapter. Hence, one can hardly call the activities of the European Commission ambitious. For quite some time, the AK has been demanding to expand the chapter, for example by including the Decent Work Agenda of ILO. Only recently, the Friedrich-Ebert Foundation, in cooperation with MEP Bernd Lange, has developed a model chapter, which in a number of points contains approaches towards a significant improvement of the status quo. An example is that in case of infringements of provisions of the sustainability chapters not only the official contractual parties, but also civil society organisations and trade unions may initiate appeal proceedings.

The probably most serious point of criticism is the missing option to sanction the sustainability chapters. The discussion between representatives of employees and environmental organisations respectively and the European Commission clearly brings different positions to light. The Commission published a discussion paper (“non-paper“) on the future design of sustainability chapters, which is sceptical towards a sanction mechanism. Its argumentation mainly refers to the dreaded rejection of the entire trade agreement by the contractual partners, should sanction mechanisms be included. Apart from that, the Commission does not tire to refer to a court case between the USA and Guatemala, which should make clear the inefficiency of such a mechanism. In doing so, the Commission underlines the difficulty to establish a causal connection of the infringement of labour rights with a concrete trade agreement, as provided by the US-American sanction mechanism. This view, however, is not shared by a large number of civil society organisations and by the European Trade Union Federation.

The necessity of sanctioning the sustainability chapter was also debated in October in a meeting of the European Parliament's Committee on International Trade. During a discussion with a Commission representative, the majority of MEPs spoke out in favour of sanction possibilities and more transparency. However, Commissioner Cecilia Malmström always responded to the demands of representatives of employees and environmental organisations by referring to the “limits of the possible”. According to her, the sustainability chapter cannot be the key part of a trade agreement.

It remains to be seen whether the European Commission will change its position in the near future and whether it will react to the proposals of workers’ representations, civil society and a large number of MEPs. In this context, one should mention the recently published Position Paper of the AK. Only with a greatly extended and sanctionable sustainability chapter will the EU be able to get a step closer to its target “Fairer Handel for all”.

Further information:

AK EUROPA: Integrating conditional labour standards in trade agreements at last!

AK EUROPA: International trade agreements – no breather in sight

AK Position Paper: Yes to binding sustainability chapter! New codecision competence of the European Parliament for trade policy should be actively used for social and environmental standards!

ETUC Resolution for an EU progressive trade and investment policy

Blog Arbeit&Wirtschaft: What follows after TTIP? A plea for civilised trade

AK Position Paper Non-paper of the Commission services on Trade and Sustainable Development (TDS) chapters in EU Free Trade Agreements

Model Labour Chapter for EU Trade Agreements

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