Guidelines for human rights-compliant trade policy

Olivier De Schutter, what do trade agreements have to do with human rights?

Trade or investment protection agreements can strongly influence a country's ability to guarantee human rights. The liberalization of agricultural trade thus benefits net exporting countries, but weakens small producers in developing countries that have had to reduce their customs tariffs and hence the protection of their small farmers. Agreements that contain clauses to protect intellectual property can hamper access by the population to essential medicines, or make seeds more expensive. Trade and investment agreements also afford foreign investors greater protection, particularly against expropriation. This makes it very difficult to return land to indigenous people, for example. After all, when human rights clash with trade commitments, governments tend to give precedence to the latter. Breaches of trade agreements could entail penalties whereas human rights agreements are «toothless».

Since 1999 the EU has been scrutinizing every free trade agreement before finalization for its sustainable development implications. How does that differ from what you are proposing?

Human Rights Impact Assessments (HRIA) are different. They are premised on the normative framework of human rights and pose specific questions. Will an agreement violate human rights or make it more difficult to protect them because it prohibits the regulation of companies, for example? Will it limit a government's room for manoeuvre in matters of housing, education or nutrition? Is it discriminatory, does it further compound the plight of the weakest population groups? Or does it provide for compensatory measures to attenuate the negative impacts on the most vulnerable?

Yet some say that the methodology for those HRIAs is not clear.

Every State can decide for itself whom it will entrust with the preparation of a HRIA. It may be a national human rights institution, a parliamentary committee or an independent department. But certain principles must always be respected. Human rights impact assessments are credible only if they are prepared independently of the work of the negotiator. Procedures and indicators must be clear and transparent. All stakeholders, especially civil society, must ultimately become involved in a participatory process. HRIAs cannot be carried out as a mere technocratic exercise. They must encompass farmers' organizations, human rights advocates, NGOs and all stakeholders who have more than just macroeconomic indicators in mind. Even if they do not necessarily cost a lot of money, there should be ample resources available in terms of time and money.

It is also important for the findings to be submitted to parliaments before they ratify the agreements. Otherwise the exercise would be no more than tokenism. And because trade agreements are always very detailed, a good balance must be struck between an analysis that would take years, and one that would overlook many issues. The best approach would be to select the five to seven most problematic issues after a first reading and focus on those.

Trade liberalization produces winners and losers. Do human rights help avert conflicts of interest?

The matter of the «trade offs» of agreements is indeed the most discussed: The most competitive sectors can tap into new markets, whilst the weakest market participants will be eliminated from the race. The policy must strive to reconcile the various aspirations. Human rights can provide a framework in this context, such that account is taken of the weakest and most vulnerable groups in society.

In negotiating an agreement a government is not necessarily representing all its country's interests, but those of the most powerful lobbies. We must open the «black boxes» of countries: the more inequality there is in a country, the greater the risk that liberalization will benefit only a tiny elite. WTO Chief Pascal Lamy underlines that the «Geneva Consensus» means that international trade creates growth and that there should be national redistribution mechanisms to take care of the losers. That sounds good on paper but does not work in most countries. Although the parliaments of the industrialized countries are growing increasingly aware of the importance of compensation within their borders, they ought not to forget that their countries also have extra-territorial obligations. They must ensure that human rights – and in this case mainly economic and social rights – are not being infringed in the developing countries with which the government negotiates agreements.

Do countries have an interest in carrying out human rights impact assessments?

A developing country that analyzes the impacts of certain demands on its people's human rights is strengthening its negotiating position. India may, for example, evoke the findings of an impact assessment and reject liberalizations that would have disastrous repercussions on its milk producers. Besides, the more I talk with diplomats from the South, the clearer it becomes to me that they are shedding their reluctance to link human rights and trade issues. This had long been considered as a form of imperialistic interference.

But industrialized countries too have an interest in being mindful of human rights impacts. An agreement that benefits only the partner country's elite is not very profitable. Wider distribution of the benefits and gains favours economic growth, reduces poverty, and fosters development.
Interview: Isolda Agazzi, Alliance Sud

Draft: Guiding Principles on Human Rights Impact Assessments of Trade and Investment Agreements

Article published in: Alliance Sud News No. 69, Autumn 2011

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Extra coaching for Seco

Olivier de Schutter has been the UN Special Rapporteur on the Right to Food since March 2008. In July this year he published draft «Guiding Principles on Human Rights Impact Assessments of Trade and Investment Agreements». They are intended to help countries develop and carry out human rights impact assessments (HRIA) of their trade policies. The document will be open for public consultation until the end of year. The Human Rights Council is expected to discuss it in March 2012.
Alliance Sud and the Bern Declaration have been calling for Switzerland to examine the possible human rights implications of bilateral trade agreements before concluding them. The UN Committee on Economic, Social and Cultural Rights too recently urged Switzerland to do the same. The competent body, the State Secretariat for Economic Affairs (Seco) has so far rejected this however, citing «methodological ambiguities». At the invitation of Political Division IV (Human Security) of the Department of Foreign Affairs as well as Alliance Sud and the Bern Declaration, Olivier De Schutter presented his guidelines in Berne at the end of August.

Isolda Agazzi, Alliance Sud

Published in: Alliance Sud News No. 69, Autumn 2011