EU refuses to apply trade sanctions for enforcing labour standards

The EU and ASEAN are strengthening their cooperation by working towards a regional free trade agreement. The Trade and Sustainable Development (TSD) chapters in the current draft do not provide sufficient protection to workers, as the European Commission has decided against a sanctions-based model.

By including Trade and Sustainable Development (TSD) chapters into Free Trade Agreements (FTAs) the European Commission has put values and principals regarding high social and environmental standards at the core of European Union (EU) trade policy. However, these instruments have not proven to be effective in improving working conditions. 

In July 2017 the European Commission initiated a discussion within the EU institutions on how to improve the current system of TSD chapters in trade agreements with the publication of a non-paper (link in English). Many civil society organizations, as well as the Friedrich-Ebert-Stiftung (FES), seized the opportunity to contribute by proposing measures that could enhance the lives of workers in the export sector. 

Download FES Response to the Non-Paper of the European Commission on Trade and Sustainability in Trade Agreements

However, hopes for a profound improvement and change were dashed with the release of a 15-action follow-up paper published by the Commission in late February (link in English). 

In the non-paper, the Commission declares its intention to continue with the current approach. In doing so the Commission missed an opportunity to improve working conditions in industries exporting to the EU. The possibility of including sanctions of any kind was categorically denied, stating that “such an approach would not fit easily with the EU’s model”.  

FES believes that a sanctions-based approach should be combined with a promotional approach. Sanctions are certainly not a goal in themselves, but if their possibility is not included, the TSD chapters will not have any credibility. 

Critics claim the debate was biased from the very beginning, favouring a continuation of the current model and not seriously examining alternative options. 

FES has also put forward a proposal for a collective complaint mechanism that would enable civil society and the social partners to initiate a complaint procedure independently from their governments—something that has not been picked up by the Commission.  

The 15-action non-paper comes at a time of intensifying EU-Asia trade relationship.

On 2 March the ASEAN Economic Ministers and the EU Trade Commissioner gathered for the 16th session of consultations in Singapore. During the meeting, which was co-chaired by European Commissioner for Trade Cecilia Malmström and Singapore’s Minister for Trade and Industry Lim Hng Kiang, the EU and ASEAN stated their clear will of a closer cooperation in the realm of trade and investment (link in English). 

Malmström also announced that the EU-Singapore FTA (EUSFTA) agreement will finally be submitted to the European Council in mid-April and thereafter to the European Parliament. Due to a decision by the European Court of Justice in May 2017 the trade agreement will thereafter require ratification by the EU member states’ national parliaments. The final signature and enforcement of the agreement might therefore fall into 2019, with the exact date depending on domestic administrative procedures in all EU member states. The EUSFTA will become the first bilateral FTA concluded by the EU with an ASEAN country (link in English).  

Mr Lim and Ms Malmström also expressed optimism about ongoing talks concerning an EU-ASEAN trade agreement, which a joint working group is currently evaluating. Even though both parties stated that work on a possible agreement has only begun, the overall direction is clear: EU-ASEAN cooperation in trade is evolving strongly (link in English). 

It will however be a challenge for the EU to negotiate a trade deal with countries such as Brunei and Myanmar, that have not yet ratified half of the fundamental International Labour Organization (ILO) conventions and would be included in an interregional EU-ASEAN trade agreement.

Therefore, ratification of the ILO core labour standards should be a pre-condition for the signature of EU trade agreements. Unfortunately, this proposal was not taken up by the Commission in its 15-action plan on improving the implementation and enforcement of TSD chapters.

Trade agreements should provide an opportunity to improve and safeguard the working conditions and the lives of workers all along global supply chains. But this requires the political will to include measures that have the teeth to effectively defend workers’ rights. Unfortunately, the latest decision of the EU regarding its own TSD chapters does not raise much hope of this happening for the workers in exporting countries affected by the EU’s policy. ### 

CarolinGrüning in currently an intern at the Singapore-based FES Office for Regional Cooperation in Asia. For more information about the regional work by FES in Asia on trade, labour and social dialogue contact <link about contact _blank external-link-internal-icon>Veronica Nilsson, programme manager at the FES Office for Regional Cooperation in Asia. 

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