The Commission responded to the momentum on sustainable trade and brought forward the review of the 15-point action plan on Trade and Sustainable Development (TSD) chapters. Seizing this momentum, the EESC's own-initiative opinion calls for an ambitious review, featuring a revamped sanctionable enforcement approach with stronger civil society monitoring, using innovative instruments and enhancing the leverage for TSD. It advocates for a much needed change of mind-set to deliver sustainable trade for future generations. Indeed, if there has been progress since the first EU free trade agreement (FTA) with a TSD chapter, scepticism remains on the efficiency and effectiveness of provisions and their enforcement.
This opinion stresses that TSD chapters are not just about European values. Most of the commitments come from internationally agreed standards - like those in the Paris Agreement or in ILO conventions – and full compliance is imperative.
Trade can drive growth, decent job creation, sustainable development and support a sustainable economic recovery from the COVID-19 crisis. This requires action at the bilateral level and at the multilateral level putting the right trade framework in place. The EESC thus calls on the EU to set ambitious TSD benchmarks with like-minded trade partners ready to lead and welcomes the active role of business in pursuing efforts to ensure sustainable trade.
Evaluating the achievements and shortcomings of the 15-point action plan, the opinion offers a comprehensive list of proposals to form a “Next generation TSD” that can also bring resilience through sustainable trade:
- Breaking down silos: Addressing interlinkages between economic, environmental and social angles rather than tacking each one separately and creating a vivid, structured and collaborative interaction of all players involved, notably civil society;
- Making more efficient use of the internationally recognised bodies in monitoring standards. For instance, the ILO should take part in monitoring the implementation of ILO Conventions in FTAs.
- Using leverage for TSD: Securing strong commitments from trade partners on environment and labour, already in the pre-ratification phase, combined with a gradual reduction of tariffs linked to implementation of TSD commitments;
- New policy instruments: Going beyond classic TSD chapters with conditional public procurement allocations, ambitious EU legislation on mandatory due diligence and complement with areas like tax and anti-corruption;
- Reflecting TSD evolutions and driving them: Starting with clearer definitions of international environmental standards and creating deeper links to the ILO Tripartite Declaration of Principles concerning Multinational Enterprises and Social Policy and the OECD Guidelines for Multinational Enterprises, especially down the supply chain.
- Stepping up on enforcement: Revamping the panel of experts mechanism by considering sanctions as a last resort measures and learning from trade partners’ “out of the box” thinking like the suspension of preferential tariffs for companies that breach agreed international standards (USMCA Rapid Response Mechanism);
No sustainable trade without empowering civil society: Creating the Domestic Advisory Groups (DAGs) was not an end in itself. As one of the strongest advocates for their empowerment, the EESC echoes DAGs' claims for greater information, resources, access to the parties and a stronger institutional framework by drafting more precise provisions in the agreements.