Sustainability obligations in EUs free trade agreements Giovanni - - PowerPoint PPT Presentation

Sustainability obligations in EU’s free trade agreements

Giovanni Gruni, ESADE Law School and ESADEGeo giovanni.gruni@esade.edu Twitter: https://twitter.com/giovannigruni Linkedin: https://www.linkedin.com/in/giovannigruni/ Related publications:

http://www.kluwerlawonline.com/abstract.php?area=Journals&i d=COLA2019126 (most up to date) https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3255041 https://www.bloomsburyprofessional.com/uk/the-eu-world- trade-law-and-the-right-to-food-9781509916207/

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Structure of the presentation

• Introduction to sustainable development and world trade law
• Sustainable development in EU’s free trade agreements
• State of the art of labour standard obligations in EU’s FTAs
• State of the art of environmental obligations in EU’s FTAs
• How labour and environmental obligations in FTAs are enforced
• Proposal of reform of enforcement mechanism (based on labour

standards)

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Introduction to sustainable development (labour + environment) in world trade law

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WHAT IS WORLD TRADE LAW?

• Body of international rules regulating free movement of goods and services

between States + other issues considered related (e.g. intellectual property)

• Developed progressively since the ‘40 via successive “rounds” of

negotiations

• Landmark was the creation of the World Trade Organisation in 1995 which

enforces WTO law via a system of internal courts (panels+appellate body)

• In 2001 the Doha Development Round started in the WTO with the
• bjective of fostering trade liberalisation further and correct some

unbalances of the system

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WORLD TRADE LAW WAS NOT DESIGNED TO INCLUDE OBLIGATIONS ON LABOUR AND THE ENVIRONMENT

• These issues were absent from most of the Rounds of negotiations and,

whenever discussed, most of countries would refuse to consider them

• Labour and the environment seen as a potential risk to obligations

contained in WTO agreements (countries could use them as “excuses” for protectionist purposes)

• Influential theoretical arguments in economic theory looking at labour and

environmental laws with contempt (neoliberism)

• Result is in the WTO there are no obligations to respect labour and

environmental standards (but see Art. XX GATT)

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Sustainable development in the trade policy of the European Union

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EU law evolves in the direction of the inclusion of sustainability issues in EU’s trade policy

• The Lisbon Treaty contains obligations on the EU to include

sustainability issues in all areas of its foreign policy including trade (e.g. Art. 21 TEU)

• Opinion 2/15 of the Court of Justice of the EU clarifies that

labour standards and environmental obligations in FTAs are an exclusive competence of the EU

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After the collapse of the Doha Round (around 2005) the EU becomes more active in the conclusion of FTAs directly with partner countries

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Summary of the state of the art of labour and the environment in EU’s FTAs

• Some obligations to respect labour standards and the environment start

being included in EU’s FTAs

• Obligations remain limited and FTAs contain also many clauses on labour

and the environment with little or no legal significance

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Summary Labour standards obligations in EU’s FTAs

• Core labour standards

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In CETA and EU-Mercosur also workers’ health and safety and labour inspections

Summary Environmental Obligations in EU’s FTAs (examples)

• Multilateral environmental conventions
• Paris Agreement
• Convention on International Trade in Endangered Species of

Wild Fauna and Flora

• Agreement to promote compliance with International

Conservation and Management Measures by Fishing Vessels

• n the High Seas

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What is an obligation under international law?

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Definition 1 Creates the right in the other party of demanding the elimination of the non- complying practice Definition 2 (from EU law) Clear, precise, unconditional EXAMPLE 1. The parties to the FTA shall ratify, implement and enforce Convention 182 of the International Labour Organisation prohibiting child labour (OBLIGATION) EXAMPLE 2. The parties to the FTA reaffirm the importance of the Convention 182 of the International Labour Organisation prohibiting child labour (Bla Bla Bla) EXAMPLE 3. The parties to the FTA shall work towards ratification of the Convention 182 of the International Labour Organisation prohibiting child labour (Grey area)

Example EU-Vietnam FTA

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Example EU-Vietnam FTA

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Present enforcement of sustainability obligations in EU´s free trade agreements

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Summary of enforcement mechanism of sustainable development clauses in EU’s FTAs

• Enforcement mechanism remains separate and way softer than the one

used to enforce the rest of the FTA (e.g. free movement of goods and services, intellectual property) even if some steps towards better enforcement are taken in recent FTAs (but some other countries already consider them the same)

• European Commission is explicitly opposing giving labour and the

environment the same enforcement as trade and IP (but EU Parliament and increasingly the Council are in favour).

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Economic obligations (trade, intellectual property…)

1. EU phase (Trade Barrier Regulation) A. Complaint by a EU industry to the EU Commission

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Economic obligations (trade, intellectual property…)

1. EU phase (Trade Barrier Regulation) A. Complaint by a EU industry to the EU Commission

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Economic obligations (trade, intellectual property…)

1. EU phase (Trade Barrier Regulation) A. Complaint by a EU industry to the EU Commission B. Investigation by the EU Commission

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Economic obligations (trade, intellectual property…)

1. EU phase (Trade Barrier Regulation) A. Complaint by a EU industry to the EU Commission B. Investigation by the EU Commission

• C. Publication of Report

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Economic obligations (trade, intellectual property…)

1. EU phase (Trade Barrier Regulation) A. Complaint by a EU industry to the EU Commission B. Investigation by the EU Commission

• C. Publication of Report

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Economic obligations (trade, intellectual property…)

1. EU phase (Trade Barrier Regulation) A. Complaint by a EU industry to the EU Commission B. Investigation by the EU Commission

• C. Publication of Report

2. Free trade agremeent dispute settlement

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Economic obligations (trade, intellectual property…)

1. EU phase (Trade Barrier Regulation) A. Complaint by a EU industry to the EU Commission B. Investigation by the EU Commission

• C. Publication of Report

2. Free trade agremeent dispute settlement A. Consultations

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Economic obligations (trade, intellectual property…)

1. EU phase (Trade Barrier Regulation) A. Complaint by a EU industry to the EU Commission B. Investigation by the EU Commission

• C. Publication of Report

2. Free trade agremeent dispute settlement A. Consultations B. Litigation

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Economic obligations (trade, intellectual property…)

1. EU phase (Trade Barrier Regulation) A. Complaint by a EU industry to the EU Commission B. Investigation by the EU Commission

• C. Publication of Report

2. Free trade agremeent dispute settlement A. Consultations B. Litigation

• C. Trade sanctions

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Sustainable development obligations (environment and labour standards)

1. EU phase (Trade Barrier Regulation) A. Complaint by a EU industry to the EU Commission B. Investigation by the EU Commission

• C. Publication of Report

2. Free trade agremeent dispute settlement A. Consultations B. Litigation (sort of)

• C. Trade sanctions

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Alternative proposal of enforcement (labour standards)

Representative social partner (trade union or employer

• rganisation)

ACTION

Trade Barrier Regulation Investigation by the European Commission International Dispute Settlement (FTA state to state dispute settlement)

• 1. Financial

Penalty

• 2. Trade

Sanctions EU Commission concludes that there is no violation of the labour standard

• Third state ends

complaint

• New agreement

between the EU and third country

Representative social partners

• List ex Article 154 TFEU

Representative social partners

• List ex Article 154 TFEU
• Domestic Advisory Groups

Representative social partners

• List ex Article 154 TFEU
• Social partners able to start

an action independently

Representative social partner (trade union or employer

• rganisation)

ACTION

Trade Barrier Regulation Investigation by the European Commission International Dispute Settlement (FTA state to state dispute settlement)

• 1. Financial

Penalty

• 2. Trade

Sanctions EU Commission concludes that there is no violation of the labour standard

• Third state ends

complaint

• New agreement

between the EU and third country

Filtering out frivolous complaints

• Need to demonstrate right of action for the EU

Filtering out frivolous complaints

• Need to demonstrate right of action for the EU
• No need to demonstrate effect on or link with trade

Representative social partner (trade union or employer

• rganisation)

ACTION

Trade Barrier Regulation Investigation by the European Commission International Dispute Settlement (FTA state to state dispute settlement)

• 1. Financial

Penalty

• 2. Trade

Sanctions EU Commission concludes that there is no violation of the labour standard

• Third state ends

complaint

• New agreement

between the EU and third country

Representative social partner (trade union or employer

• rganisation)

ACTION

Trade Barrier Regulation Investigation by the European Commission International Dispute Settlement (FTA state to state dispute settlement)

• 1. Financial

Penalty

• 2. Trade

Sanctions EU Commission concludes that there is no violation of the labour standard

• Third state ends

complaint

• New agreement

between the EU and third country

Representative social partner (trade union or employer

• rganisation)

ACTION

Trade Barrier Regulation Investigation by the European Commission International Dispute Settlement (FTA state to state dispute settlement)

• 1. Financial

Penalty

• 2. Trade

Sanctions EU Commission concludes that there is no violation of the labour standard

• Third state ends

complaint

• New agreement

between the EU and third country

Representative social partner (trade union or employer

• rganisation)

ACTION

Trade Barrier Regulation Investigation by the European Commission International Dispute Settlement (FTA state to state dispute settlement)

• 1. Financial

Penalty

• 2. Trade

Sanctions EU Commission concludes that there is no violation of the labour standard

• Third state ends

complaint

• New agreement

between the EU and third country

Representative social partner (trade union or employer

• rganisation)

ACTION

Trade Barrier Regulation Investigation by the European Commission International Dispute Settlement (FTA state to state dispute settlement)

• 1. Financial

Penalty

• 2. Trade

Sanctions EU Commission concludes that there is no violation of the labour standard

• Third state ends

complaint

• New agreement

between the EU and third country

Representative social partner (trade union or employer

• rganisation)

ACTION

Trade Barrier Regulation Investigation by the European Commission International Dispute Settlement (FTA state to state dispute settlement)

• 1. Financial

Penalty

• 2. Trade

Sanctions EU Commission concludes that there is no violation of the labour standard

• Third state ends

complaint

• New agreement

between the EU and third country