a lever for environmental and labor protection? – Giovanni Gruni
If the pitfalls of the latest attempt at a transatlantic trade deal are avoided, it could be a vehicle for improving standards.
After World War II, the United States became the architect and most staunch supporter of a rules-based global trading system, embodied in the General Agreement on Tariffs and Trade of 1947 and later. in the World Trade Organization. Under the presidency of Barack Obama, he built on the multilateral structure of the WTO, aimed at concluding large-scale free trade agreements (FTAs) with other states, in support of what the administration saw as US economic interests.
The advent of Donald Trump as Obama’s successor has been the most complete revision of American trade policy in 70 years. Trump took a drastically different stance, killing negotiations for a possible trade deal with the European Union and pulling the United States out of the Trans-Pacific Partnership. He espoused mistrust of global institutions such as the WTO and caused a dead end before its main jurisdiction, the Appellate Body.
Joe Biden’s administration is likely to slowly restore the traditional stance on trade, restoring confidence in economic cooperation and international institutions. Biden pledged to work for closer economic integration between the US and the EU, which could herald a trade agreement with the old continent. As the attempted transatlantic trade and investment partnership collapsed in late 2016, a closer trade relationship between the EU and the US is now even more essential, to offset the growing geopolitical and economic influence of China.
Avoid the previous pitfalls
The heated controversies sparked by the TTIP negotiations concerning the international dispute settlement system allowing companies to sue states, fears of a ‘race to the bottom’ in consumer product and food standards and broader concerns about corporate influence on legislative processes — always spill over into European politics. Any attempt to relaunch negotiations will have to reframe the discourse on trade to avoid the previous pitfalls and convince the European Parliament, as well as the European public, that economic integration benefits everyone and not just the big economic operators.
This would require addressing the long-standing issue of the place of labor and environmental standards in trade agreements and in international trade law more generally. Another trade deal, which the EU recently concluded with the Mercosur countries in South America, is on hold precisely because of its perceived weaknesses in environmental standards.
The Biden administration has already spoken out on the central role of work and the environment will play in the future trade policy of the United States. Closer trade relations between the EU and the US could lead to innovations in trade law as to how environmental and labor standards are defined.
This could be an opportunity for the EU to go beyond its current standards of protection and enforcement in FTAs. Closer cooperation between the EU and the US could place labor and environmental issues, historically peripheral to trade negotiations, at the center of international trade law. When drafting FTAs, the EU still does not have give the same weight to work and the environment as free trade obligations and intellectual property rights.
Standards and obligations
Recent FTAs prepared by the EU include a sustainable development clause between the parties, encouraging the among others environmental and labor standards, including the conventions of the International Labor Organization. Most EU FTAs contain provisions to protect collective bargaining rights and freedom of association and to prohibit discrimination in the workplace. The most recent ones, such as the EU-Mercosur FTA, also include an obligation to implement the Paris Agreement on climate change. These obligations are already contained in a separate section of EU trade agreements, with a dedicated enforcement mechanism.
The United States’ trade agreements contain similar, but not identical, obligations and take a different approach to enforcement in cases of non-compliance. For example, the United States, unlike the EU, has been proactive against forced labor, using customs controls to enforce the policy. Closer cooperation could encourage the EU to innovate more in environmental and labor standards.
First, negotiating with the United States could provide an opportunity to go beyond the mere inclusion of issues such as workers’ health and safety or minimum wages, as Obama had explored in the Comprehensive and progressive trans-Pacific partnership agreement and Trump in the United States-Mexico-Canada Agreement. Even though recent EU FTAs mention the Paris Agreement, many doubts remain about the legal implications, especially given the lack of obligations in the agreement itself. The EU and the US could explore ways to make the resulting national commitments binding and enforceable through international trade law.
Currently, the substantive labor and environment obligations that the EU includes in its FTAs with developed countries are not that different from those already included in FTAs with developing countries. Such obligations rarely go beyond the protection of core labor standards and the reference to a few international environmental instruments.
Quality of execution
Second, the EU could use negotiations with the US to ensure the same quality of enforcement of environmental and labor standards as in free trade and intellectual property. Currently, unions, non-governmental organizations and even businesses are unable to bring complaints to the European Commission for violation of labor and environmental standards contained in EU FTAs.
The commission has recently started to provide an informal mechanism do that, but it’s far from legal guarantees the application of free trade obligations and intellectual property rights in the trade barriers regulation. In addition, EU FTAs still do not allow the imposition of fines and penalties for violations of labor and environmental standards, a policy pursued by both the United States and the United States. Canada.
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Finally, with regard to forced labor, the United States obliged its customs and border protection agency to seize and destroy the goods produced, even in small part, by forced labor. EU customs authorities cannot pursue a similar policy, although there are rumors that the committee is considering a legislative change in this direction.
The EU has a lot to learn from the US on these issues and could use similar customs enforcement strategies to force maintenance of labor standards or stop the importation of goods that violate the Paris Agreement. This should be made compatible with WTO rules.
A trade deal between the US and the EU may not yet be on the table, but closer transatlantic trade cooperation offers an opportunity to strengthen protection of labor and environmental standards. It will test the EU’s ability to use this renewed partnership to pursue issues related to the inclusion of sustainable development in international trade policy and law.
This is part of a series on the transatlantic relationship, supported by the Friedrich Ebert Foundation