EU trade policy refers to the common policy of the European Union in relation to agreements with states on matters linked to tariffs, market access and trade-related policies such as public procurement or competition. Since the blockage of the WTO Doha Development Round, the EU and its trading partners have embarked on a plethora of bilateral and bi-regional trade agreements, or wider association or cooperation agreements. The EU is also party to plurilateral trade agreements, such as the WTO Government Procurement Agreement (GPA) and is an active partner of the negotiation of a future Environmental Goods Agreement (EGA). In addition to bilateral agreements, the EU also counts with unilateral trade policy instruments (e.g. Generalised System of Preferences, currently being revised).
The past EU trade strategy ‘Trade For All’ of 2015 included some concrete actions to promote responsible management of supply chains and to promote the uptake of fair and ethical trade schemes (section 4.2.4), building on the recognition in a 2009 policy document of the role of Fair Trade and other trade-related sustainability schemes to sustainable development.
The current EU trade policy – released on February 2021- does not build on the past fair and ethical trade section included in ‘Trade For All’ strategy; but it must nevertheless deliver in EU’s commitment to fostering sustainable development. The policy is based on three core principles: open, assertive and sustainable.
In addition, after the introduction in 2018 of the 15-point plan to make EU trade and sustainable development chapters more effective, the European Commission has started a revision of its strategy with regards to Trade and Sustainable Development.
WHAT ARE THE FTAO’S VIEWS?
EU trade policy remains mainly targeted as a tool to open markets for EU companies abroad, guarantee cheap low-added value inputs access to the EU, while offering protection to some sectors, like EU farming and the agri-food industry, which typically benefit large economic actors over small EU farmers. For example, the EU-Mercosur agreement, not yet ratified, is an example of the insufficient strength of sustainable development and climate action commitments in EU trade agreements, which are relegated to weak “Trade and Sustainable Development” chapters.
Though the current EU trade policy does not contain a ¨fair and ethical trade¨ section, the Commission has affirmed that in negotiating and implement trade agreements, the EU has a clear focus on trade and sustainable development commitments, including fair and ethical trade. However, EU trade policy must do more efforts on top-down and bottom-up approach towards the uptake of Fair Trade and sustainable development.
The FTAO looks forward to keeping on contributing to the improvement of the EU trade policy, so that it truly becomes an instrument to foster EU´s contribution to sustainable development worldwide. Those are part of the messages we conveyed to the Commission during the Trade and Sustainable Development revision:
- The EU already has in place a toolkit that, if used properly, allows to make EU trade fair and sustainable. One of those tools are Trade and Sustainable Development Chapters
- TSD Chapters need to be effectively implemented, binding and enforceable
- ILO Conventions and Paris Agreement must be essential clauses to trade agreements. FTAO supports sustainable development becoming “essential clauses” of EU trade agreements.
- There is need for larger role for civil society and the Domestic Advisory Groups
- Improvement of dispute settlement mechanisms for TSD provisions and improvement of Single Entry Point complaint mechanism
- Mandatory Human Rights and Environmental Due Diligence must be put in place
- EU needs to act as enabler of citizens-led initiatives, such as Fair Trade initiatives that are a catalyser of sustainable development
- Online Event: Global Trade, Fair Enough? Hosted by the European Parliament Fair Trade Working Group (26 January 2022)
TSD Communication: A step towards fairer Trade agreements? (Press Release, 22.06.2022)
Find out more on our work and views on other EU policies (such as on Sustainable Corporate Governance & Human Rights and Environment Due Diligence) here.