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World trade

The fig-leaf approach to human rights

by Armin Paasch

In depth

Excessively cheap EU exports destroy local markets: chicken farm in Senegal.

Excessively cheap EU exports destroy local markets: chicken farm in Senegal.

The EU is facing a serious crisis of legitimacy concerning its trade policies. To resolve the issues, the EU must refocus on basic European values. Unfortunately, such refocusing has hardly led to tangible results yet.

Protests are arising all over the EU against two planned trade agreements: CETA (Comprehensive Economic and Trade Agreement) with Canada and TTIP (Transatlantic Trade and Investment Partnership) with the USA. In response to the protests, Cecilia Malmström, the trade commissioner, adopted a new strategy called „Trade for all” in 2015. Among other things, it expresses renewed concern for European values as well as democracy.

Malmström’s promises include effectiveness, transparency and a focus on values. She pledges to protect Europe’s social and regulatory model and to promote human rights, sustainability and the fight against corruption all over the world.

However, the new strategy hardly mentions tangible reform steps that would be necessary to initiate real change. And it is not as innovative as the commissioner would have us believe. The EU has officially been committed to the promotion of human rights in trade relations since the early 1990s. In the Treaty of Lisbon of 2009, it pledged to respect and promote human rights in all dimensions of its external affairs. What really matters, however, is what action the EU and its members actually take.

In terms of substance, the new trade aspirations hardly differ from the old ones. The top priority is to enhance competitiveness and profitability of private-sector companies based in Europe. For this purpose, the EU demands:

  • unrestricted market access for European goods, services and investments in all partner countries,
  • unrestricted access to resources and public-procurement tenders and
  • stronger protection of intellectual property rights.

With an eye to increasing exports, it is still a core concern of the commission to abolish trade barriers. It praises its agreement with South Korea as a model case. This agreement did away with 99 % of all import duties within five years on both sides and helped to boost EU exports by 55 % in three years.

It is remarkable that the new EU strategy stresses the relevance of the agriculture and food sector. According to the commission, the EU is the world’s greatest exporter in this sector, but it cannot rise to the top of its potential because of trade barriers.

In the multilateral context of the World Trade Organization (WTO), the EU has accepted preferential treatment for developing countries, but in bilateral negotiations, it insists on reciprocity, only agreeing to a very limited measure of preferential treatment. In its Economic Partnership Agreements, it even ensured that least developed countries such as Burkina Faso abolish 75 % of tariffs. The commission has not heeded – and is still not heeding – civil-society campaigns that have been criticising the EU for decades in regard to dumping strategies, the crowding out of small-holder farmers and the developing countries’ increasing dependence on food imports.

With respect to investor protection, the commission emphasises what it calls a fundamental right to regulate. This stance is a response to the vibrant anti-CETA and anti-TTIP movement. The commission now wants to introduce a kind of international investment court system to replace the private panels that have been dealing with disputes between foreign investors and states to date. It insists, however, that foreign investors deserve a special right to sue state agencies. Corporations perceiving unfairness or indirect expropriation can thus claim billions of euros as compensation. They are empowered to take legal action even against reforms that affect land ownership, water supply or health care or serve the protection of social human rights.

Just like the previous strategy, the new one does not foresee any exceptions that serve to protect human rights. It fails to spell out that measures to ensure the rights to food, health or social protection serve „legitimate policy goals“. The right to regulate, however, must be rooted in legitimate goals, according to the EU.


Human rights at risk

In recent years, agricultural exports from the EU have put considerable downward pressure on food prices in developing countries. Many smallholder farmers have been plunged into poverty or even crowded out of markets. Relevant products include milk powder in Bangladesh and Burkina Faso, pork in Cote d’Ivoire and tomato paste and poultry meat in Ghana. Such exports have led to infringements of the human right to food and other social rights. In this context, the EU announcement to keep supporting agricultural exports via trade agreements sounds like a threat (see article by Francisco Mari in D+C/E+Z).

A second controversial issue is the stronger protection of intellectual property. The agreements the EU has struck with Colombia and Peru, for example, state that the 1991 convention of the Union for the Protection of Organic Varieties (UPOV) applies. According to this international convention, farmers, whenever they use protected varieties, are neither allowed to use what they harvest as seed, nor to sell or trade parts of their harvest as seed. These practices are quite common in the Andes however. These rules are likely to raise farms’ production costs and ultimately undermine farmers’ right to food.

EU trade policies threaten human rights in other regards as well. Exaggerated IP rights limit people’s access to pharmaceuticals and thus affect their right to health. Pressure to privatise public services can compromise the rights to education, health and water. The fear of foreign investors’ suing them can make governments shy away from indispensable efforts that would safeguard human rights. The EU demand to abolish export taxes, moreover, can spawn additional mining. In this sector, environmental damage and human-rights infringements are all too common.

A pertinent question is thus: how does the EU intend to fulfil its obligation, which is enshrined in the Lisbon Treaty, to respect and promote human rights abroad, including in trade affairs? The commission points out that its strategy includes trade sustainability impact assessments (SIAs) as a routine matter. It is indeed most welcome that the commission has begun to consider human rights a relevant criterion in this context.

The downside, however, is that SIAs are only concluded once trade talks have advanced considerably and it has become difficult to change course. To have an impact, SIAs would have to be carried out before negotiations start. In that case, they could have a bearing on defining the negotiation mandate. Moreover, it would make sense to involve civil society and the European Parliament in making that definition too. If that was done, the SIAs could indeed have a meaningful impact and contribute to redrafting trade policies.

It is well known, however, that not all human-rights impacts are easily identified before a trade agreement takes force. Accordingly, clauses concerning exceptions that serve to protect human rights are needed. Such clauses would ensure that governments have the policy space they need to protect human rights even if the necessary measures do not conform with a trade agreement. In this regard, existing human-rights clauses are insufficient.

Last year, human-rights organisations tried to convince Commissioner Malmström of a new model clause that was drafted by Lorand Bartels, a law expert, on behalf of Misereor and the German Institute for Human Rights. The effort failed unfortunately.

The model clause would rule out that a trade agreement can be read in a way that keeps signatory countries from fulfilling their human-rights duties domestically or abroad. Moreover, the clause would make recurring human-rights impact assessments mandatory, in order for problems to be detected systematically. Finally, the clause would establish a complaint mechanism for civil society and give scope for rewriting the problematical clauses of trade agreements. It is a pity that the EU’s trade strategy does not include any of these points.


Conclusion

The EU has the legal duty to respect and promote human rights, including in trade matters. To fulfil this duty, it must reform and strengthen its human-rights instruments. Unfortunately, such a reform is not on the agenda – neither in Brussels, nor in the capital cities of the member nations.

So far, talk of human rights serves as a mere fig leaf. The EU’s current crisis of legitimacy provides an opportunity to change course. Unless that happens, an end to the crisis is not in sight.


Armin Paasch is an adviser on business and human rights for MISEREOR, the Catholic charity.
[email protected]

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