(Source: European Commission)
“Check against delivery”
Early last year, we promised that trade policy would play a greater role in supporting the EU’s sustainability agenda.
Today, we are delivering on that promise.
We are taking an important step on the road to making EU trade greener, fairer and more sustainable.
The EU takes a holistic approach to trade and sustainability.
This means we pursue our goals at multiple levels: autonomous, bilateral and multilateral.
We believe this is the only way to deliver meaningful results. And we are moving forward on all three levels.
Just last week in Geneva, the EU led global efforts to reach a landmark WTO deal on sustainable fishing at MC12. We negotiated day and night to get this deal over the line.
And it was a real breakthrough.
It is the first time any kind of sustainability agreement has been reached at the multilateral level.
We feel both pride and validation that EU leadership here is paying off.
Likewise, we have developed so-called “autonomous instruments”.
Simply put, it’s our own EU toolbox, to promote environmental protection and labour rights globally.
It includes new tools to tackle deforestation.
And it includes mandatory due diligence rules to help companies make their supply chains fair and sustainable.
Today’s communication is about how we anchor sustainability at the bilateral level; namely, in our trade deals with partners around the world.
I remind you that the EU has the deepest and widest network of free trade agreements of any global power – 46 agreements with 78 partners.
More than the U.S. More than China.
These deals are a gateway to economic opportunity. But they are also a platform for building relationships, based on trust and shared values.
And, let’s be clear: climate and sustainability action is a value we must all share, given the current challenges we face.
So, out trade deals provide leverage to engage with our partners.
They provide a safe space where we work with them and encourage them to adopt more climate and environmentally friendly practices, and to respect human rights and labour rights.
This is vital, because the EU cannot achieve sustainability alone.
We believe that remaining committed to open, fair and rules-based trade is the most effective way to make lasting change.
In these times of geopolitical uncertainty, it is more important than ever that the EU remains a credible and engaged trading partner. So, our capacity to conclude and ratify bilateral trade agreements is paramount.
All our modern trade agreements include chapters on trade and sustainable development, with a broad set of mutually agreed commitments.
We gave this approach a big boost three years ago, when we published the 15-Point TSD Action Plan.
But it quickly became clear that we need to do more.
So we looked into what additional steps were necessary.
The biggest focus is on implementation and enforcement.
In other words: we need to make sure that sustainability commitments do not remain only on paper, but that they actually happen on the ground.
And if you sign a deal with us, we need to have the means and tools to ensure that you do what you say.
We have six priorities:
First, cooperation and dialogue should remain our guiding light.
We should build on internationally agreed and recognised standards. And we should be ready to provide technical and financial assistance to our partner countries when needed.
The second important principle is that “no one size fits all”.
For new deals, we should identify sustainability priorities even before negotiations begin, including through our sustainability impact assessments.
And then we should target these clearly in discussions.
This is essential, given that we are negotiating with countries as diverse as New Zealand and Indonesia.
We can agree on roadmaps tailored to the needs of our partner countries, with clear timelines and milestones. This will also facilitate monitoring of agreements after they enter into force.
Third, it is important to mainstream sustainability in every section of trade deals. For example, we need to look at opening new markets for import and export of green goods and services, and raw materials, and the avoidance of trade barriers.
Fourth, we need to overcome silos when it comes to implementation. We are all in this together, all Commission services, all EU institutions, and all EU Member States.
We notably propose to make it easier to register complaints about TSD violations in our trade deals.
Fifth, the role of civil society. We need to continue putting in place financial and logistical support.
This is the surest way to empower civil society to play a stronger role in monitoring the implementation of TSD chapters.
And sixth, we need more effective enforcement.
Let me recall that we are not starting from scratch:
Our TSD chapters are already enforceable through a dedicated dispute settlement mechanism.
And we have not hesitated to resort to an independent Panel of Experts when we considered that a FTA partner did not comply with sustainability commitments.
This was most visibly demonstrated when we brought a case against Korea on labour commitments.
Our action resulted in Korea ratifying three core ILO conventions and changes in their labour law.
But we acknowledge that there are expectations for more assertive enforcement.
So, while our approach should remain centered on cooperation and engagement, there may be circumstances where sanctions are warranted.
We have to find an appropriate balance, and this is why we propose to introduce trade sanctions on core provisions of TSD chapters.
By core provisions, we mean the core principles of the International Labour Organization, and material breaches of the Paris Climate Agreement.
We propose to apply these trade sanctions based on the standard dispute settlement that we use for the rest of our bilateral deals.
And we will only do so as a matter of last resort, in cases of blatant and persistent breaches of internationally agreed standards.
So, if an independent panel of experts finds that a FTA partner has breached one of those core TSD provisions, and the partner does not comply, the EU will be able to suspend tariff preferences.
To conclude, let me outline what we propose to do with this new six-pronged approach.
The majority of the actions can be deployed right away, including in our existing agreements.
For certain actions, we can apply the new approach to existing agreements.
Other actions, for example to introduce trade sanctions, will require a change in the template of our TSD chapters.
We will roll out this approach in our ongoing negotiations.
And, when we have new negotiations in future, we will also apply this new approach to them.
This TSD roadmap provides an exciting new set of possibilities for EU trade policy. We look forward to putting it into action straight away.