Linking trade and human rights

Since 1995 the EU has recognized the principle of incorporating provisions for the advancement of human rights and democracy in trade agreements with third countries. Implementation of the principle does vary, however.

The most extensive provisions are to be found in the Cotonou Agreement signed in 2000 between the EU and 79 former African, Caribbean and Pacific colonies. Respect for human rights as well as constitutional and democratic principles are essential components. To encourage their observance, the agreement provides for regular political dialogue and an institutionalised consultation and arbitration procedure.

EU bilateral agreements with Mediterranean countries as well as with Mexico, Chile and South Africa place more emphasis on «classical» sanctions. A somewhat vague formulation is used, to the effect that infringements of fundamental human rights and the relevant conventions should be met with «appropriate measures». Lastly, under the Generalised System of Preferences (GSP), the EU imposes a degree of social and environmental conditionality even on countries to which it accords unilateral trade preferences. It ties this to the ratification of certain agreements and their transposition into national law. These include some of the core conventions of the International Labour Organisation (ILO), the Tropical Timber Agreement, or action to promote alternatives to drug cultivation. Serious infringements could lead to the withholding of trade preferences.

Positive experiences

The various mechanisms have a mixed record. They are least effective when it comes to the observance of human rights, where their impact is as good as zero. In practice, sanctions have been imposed just twice: on Myanmar (1997) and Byelorussia (2007). In both cases, the EU was reacting to serious human rights violations and the sanctions targeted the Government directly.

In contrast, linking trade benefits and social and environmental requirements under the Generalised System of Preferences seems to be having some impact. It has prompted most countries to ratify the relevant international conventions.

A study by the International Institute of Sustainable Development (IISD) shows that social and environmental requirements also have a positive effect under bilateral agreements, even when no sanctions have been imposed. Chile, for example, has strongly aligned its national legislation with international law after concluding free trade agreements with the USA and the EU.

The IISD study further shows that soft pressure for a more sustainable policy is also impacting individual economic players, prompting them to anticipate their trading partners' expectations. Brazilian manufacturing and food companies, for example, have adopted environmental and other standards so as to retain market share. In short, much more than actual sanctions, it is the technical and legal stipulations incorporated in the agreements (and labelling requirements in industrialised countries) that do exert leverage.

Dialogue rather than sanctions

Besides, many developing countries, chiefly some Latin American emerging countries, are today much less averse to social and environmental provisions in trade agreements than previously. The discussions (and pressures) surrounding climate change have sensitised governments to environmental issues.

In its agreements with the USA and Canada, Colombia thus accepted additional provisions on environmental protection and safeguarding workers' rights. It committed itself to observing international agreements and improving national legislation. To ensure this, the agreements provide for institutional mechanisms as well as an arbitration procedure. They too rely less on traditional social clauses with sanctions than on information sharing and political dialogue.

It therefore makes sense for trade agreements to include environmental and social standards. Yet in the future, it will take tighter provisions to enforce tough environmental and social standards in goods manufacturing, for example. An international labelling system could even be considered. The World Trade Organisation (WTO) has so far consistently refrained from linking trade with social and environmental criteria, for reasons of «non-discrimination». Bilateral trade agreements would be a suitable field of experimentation for opening the way for fair trade.

Bastienne Joerchel, Alliance Sud

See also: Rebellion in the House of Representatives

Further reading: Pedro da Motta Veiga, Sandra P. Rios: Trade and Development – The rising importance of sustainable development in the South American trade agenda. IISD 2009.