Implementation of Free Trade Agreements 1 January 2018 - 31 December 2018

EESC opinion: Implementation of Free Trade Agreements 1 January 2018 - 31 December 2018

The Covid-19 impact is having a profound and unprecedented impact and Europe needs to respond with a strong, social, sustainable and inclusive EU Recovery Plan that will support companies and people. The upcoming early EU Trade Strategy review needs to draw important lessons from this crisis. The EU is not self-sufficient and depends on access to international markets. It needs resilient, diversified and responsible Global supply chains. Stronger instruments need to deliver on a sustainable trade and investment agenda in all its dimensions. It needs to be consistent with the Green Deal and show equal ambition on the effective implementation and enforcement of labour provisions. European Economic and Social Committee (EESC) recommendations made in a series of recent and ongoing key opinions on EU trade must inform this strategy review.[1] It should go beyond old trade models, building a new model that is economically resilient, greener, socially sustainable and responsible.

The EESC believes that the role of Domestic Advisory Groups (DAGs) should be fleshed out in the report, to match their crucial role in monitoring, especially now that their scope is about to widen beyond TSD chapters. Via these DAGs, civil society is able to raise awareness of trade issues, flag concerns and shortcomings. DAGs should thus be part of Commission and inter-institutional Trade discussions.

To fulfil its informative mission on trade networks and their performance, the annual report should better interlink with past reports and the overall life cycle of trade evaluation policy, i.e. making use of Sustainable impact assessments (SIA). During the drafting of future reports, the Commission should consult with civil society.

The report should show the different realities per EU Member State or region, by using national data more consistently and invest in active data collection if needed. Setting criteria is essential for comparisons. International Labour Organisation (ILO) data should complement on labour violations.

Trade in services deserves a greater focus in the report, and this starts with the collection of more granular data, per sector and mode of supply, to assess businesses' use of FTA advantages. The revamped Market Access Database should cover services in a consistent way and include a guide for European services exporters and investors. The EESC also regrets the lack of focus on consumers. It would indeed be useful for consumers to see how increases in trade flows can materialise into concrete benefits.

The report shows an asymmetry in the preference utilisation rate (PUR) between EU exports and imports into the EU. The EC and Members States need to rebalance the situation and increase awareness of trade benefits, in particular amongst small and medium size companies (SMEs). In cooperation with the EU business community, they should promote FTAs in their national language and develop national implementation action plans for each FTA. Outreach activities also need to consider importers in partner countries.

It is crucial to improve the transparency of public procurement in FTAs partner countries, i.e. by publishing third country tenders in the EU Tenders Electronic Daily database. Additionally, the EU should promote best practices on how to include environmental and social criteria in public procurement.

The implementation of agri-food provisions seems to be falling short of its ambitious goals. Traceability of products and capacity to enforce the precautionary principle are key to ensure good quality of food and its safe and secure supplies. Efficient monitoring of Sanitary and phytosanitary standards (SPS) calls for inspections with adequate resources.

Concerned over the lack of progress in compliance and of binding enforcement tools in TSD chapters, the EESC welcomes the overdue legal action in the Korea labour rights dispute and calls for firm progress on the Comprehensive Economic and Trade Agreement (CETA) review of labour and environmental provisions' effective enforceability.

The EESC strongly welcomes recent initiatives to step up efforts on sustainable trade. With the UK, the EU is aiming for a sustainable level playing field and applying the general dispute chapter with access to remedies. The Paris agreement will be an essential element in all future comprehensive trade agreements. The EESC calls for this clause to be extended to ILO fundamental and up-to-date Conventions ratified by all Member States also deserve. ILO should be involved in monitoring the implementation of ILO Conventions in FTAs. The EESC looks forward to a fresh debate amongst Member States on how to strengthen TSD chapters. This debate needs to keep environmental and labour standards equally high on the implementation and enforcement agenda.

[1] OJ C 47, 11.2.2020. Ongoing work of REX/529 ' A post Covid-19 emergency: designing a New Multilateral Matrix', NAT/791 ' Compatibility of EU trade policy with the European Green Deal' and REX/532 ' Sustainable supply chains and decent work in international trade'.