The EU’s Modernised Trade Defence Instruments: Promoting Sustainable Development in the EU’s Trade Relations?

Trapp, Patricia

doi:10.1007/978-3-030-91363-2_8

Patricia Trapp²⁶

Part of the book series: European Yearbook of International Economic Law ((EYIELMONO,volume 23))

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Abstract

Several provisions of the EU’s reformed basic regulations incorporate concerns relating to the level of environmental protection and the protection of workers’ rights in the country of export. Other than in trade defence law, non-commercial aspects are also taken into account in other parts of the EU’s common commercial policy. Yet, while these clearly link access to the internal market to compliance with international environmental and labour law standards, this is not the case for the reformed Basic Anti-Dumping Regulation or the Basic Anti-Subsidy Regulation. Further, the modernised basic regulations lack a clear focus on the promotion of sustainable development in the exporting countries. In another key difference to the remainder of the EU’s commercial policy instruments, the approach pursued by them is not based on cooperation, but on confrontation. Moreover, again standing in contrast to other commercial policy instruments, the general human rights situation in the country of export is irrelevant.

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Notes

1.
Cf. above p. 31 and 83.
2.
Cf. above Chap. 4, p. 83 et seq.
3.
Dimopoulos (2010), p. 167; also holding that Article 21 TEU may not be used to legitimise purely protectionist policies: Weiß (2014) para. 26. Cf. also the Opinion of Advocate General Léger in Commission v NTN Corporation and Koyo Seiko (Chap. 4, n 118) 9; Anton Dürbeck v Hauptzollamt Frankfurt am Main-Flughafen (Chap. 4, n 111) 44.
4.
Cremer (2016) para. 13; Vedder (2013), p. 143.
5.
Donno and Neureiter (2018), p. 335, 336.
6.
Bartels (2015), p. 73.
7.
On trade policy in the Treaty of Lisbon cf. above p. 26 et seq.
8.
Council of the European Union, ‘Review of the EU Sustainable Development Strategy (EU SDS) – Renewed Strategy (Document 10117/06)’ (Brussels 26 June 2006) 21.
9.
Ibid.
10.
European Commission, ‘Communication from the Commission to the Council, the European Parliament, the European Economic and Social Committee and the Committee of the Regions: Global Europe: Competing in the World: A Contribution to the EU’s Growth and Jobs Strategy (COM(2006) 567 final)’ (4 October 2006) 9.
11.
Gruni notes that besides the chapters explicitly dedicated to TSD matters, other parts of a trade agreement are relevant for the pursuit of sustainable development objectives, too, Gruni (2018), pp. 4, 8–10.
12.
Bartels (2013), p. 73. Cf. Chaps. 4 (Environment) and 5 (Social aspects) of Part II, Title I (Trade in Goods) in ‘Economic Partnership Agreement between the CARIFORUM States, of the one part, and the European Community and its Member States, of the other part (OJ 2008 L 289/3)’ (30 October 2008).
13.
These include the EU agreements with Central America, Canada, Colombia, Georgia, Korea, Moldova, Peru, and Ukraine, Singapore and Vietnam. They are also included in draft negotiating texts in the Transatlantic Trade and Investment Partnership with the United States of America, the Comprehensive Economic Partnership Agreement with Indonesia, and the EU-MERCOSUR Association Agreement, Harrison et al. (2019), p. 635, 639.
14.
European Commission, ‘Non-paper: Trade and Sustainable Development (TSD) chapters in EU Free Trade Agreements (FTAs)’ (Brussels 11 July 2017) 2.
15.
Marx and others (2015), p. 6.
16.
This does not apply to all of the agreements concluded by the EU, though. For example, the EU-Vietnam FTA does not explicitly set out the suspension of the agreement in the event of human rights violations.
17.
Vienna Convention on the Law of Treaties (1155 U.N.T.S. 331) (23 May 1969).
18.
Borchert et al. (2018), p. 7.
19.
Ibid.
20.
Bartels (2013), p. 78.
21.
European Parliament, Briefing: Human rights in EU trade agreements: The human rights clause and its application (2019) 8; Donno and Neureiter (2018), p. 348 specifically on the Lomé Convention.
22.
European Parliament, Briefing: Human rights in EU trade agreements (2019) 8; European Commission, ‘Non-paper: Using EU Trade Policy to promote fundamental human rights’ (2012) 3.
23.
Bartels (2013), p. 84. Cf e.g. Article 13.7 of the ‘Free Trade Agreement between the European Union and its Member States, of the one part, and the Republic of Korea, of the other part (OJ 2011 L 127/6)’ (14 May 2011) which reads: ‘(1) A Party shall not fail to effectively enforce its environmental and labour laws (…). (2) A Party shall not weaken or reduce the environmental or labour protections afforded in its laws to encourage trade or investment, by waiving or otherwise derogating from, or offering to waive or otherwise derogate from, its laws, regulations or standards.’
24.
Cf. e.g. Article 13.2 of the EU-Korea Free Trade Agreement (n 23): ‘(2) The Parties stress that environmental and labour standards should not be used for protectionist trade purposes. The Parties note that their comparative advantage should in no way be called into question.’
25.
Bartels (2013), p. 297, 310. Cf. e.g. Articles 23.9, 23.10 and Articles 24.15, 24.16 of the ‘Comprehensive Economic and Trade Agreement (CETA) between Canada, of the one part, and the European Union and its Member States, of the other part (OJ 2017 L 11/23)’ (14 January 2017).
26.
Harrison and others (2019), p. 640; Gruni (2018), p. 7. In this context, the dispute settlement procedure initiated by the EU under the trade and sustainable development chapter of the EU-Korea trade agreement should be mentioned. It constitutes the first instance where the dispute resolution process set out in the TSD chapters has been activated. For more information cf. European Commission, EU-Korea dispute settlement over workers’ rights in Korea enters next stage (2019).
27.
For an overview on labour standards cf. e.g. Harrison and others (2019) and Marx and Soares (2015).
28.
European Commission, EU set to sign trade and investment agreements with Vietnam on Sunday (2019).
29.
‘Free Trade Agreement between the European Union and the Socialist Republic of Viet Nam’ (OJ 2020 L 186/3) (12 June 2020).
30.
European Commission, ‘Non-paper: Trade and Sustainable Development (TSD) chapters in EU Free Trade Agreements (FTAs)’ (Brussels 11 July 2017) 7.
31.
Ibid 8.
32.
European Commission, ‘Non-paper: Feedback and way forward on improving the implementation and enforcement of Trade and Sustainable Development chapters in EU Free Trade Agreements’ (Brussels 26 February 2018) 3.
33.
European Commission, ‘Non-paper: Trade and Sustainable Development (TSD) chapters in EU Free Trade Agreements (FTAs)’ (Brussels 11 July 2017) 8.
34.
Ibid 9.
35.
European Commission, ‘Non-paper: Feedback and way forward on improving the implementation and enforcement of Trade and Sustainable Development chapters in EU Free Trade Agreements’ (Brussels 26 February 2018) 2.
36.
Borchert and others (2018), p. 11.
37.
European Commission, ‘Non-paper: Feedback and way forward on improving the implementation and enforcement of Trade and Sustainable Development chapters in EU Free Trade Agreements’ (Brussels 26 February 2018) 8.
38.
Harrison and others (2019), p. 649.
39.
Gruni (2018), p. 7.
40.
Regulation (EU) 2017/821 of the European Parliament and of the Council of 17 May 2017 laying down supply chain due diligence obligations for Union importers of tin, tantalum and tungsten, their ores, and gold originating from conflict-affected and high-risk areas.
41.
Council Regulation (EC) No 428/2009 of 5 May 2009 setting up a Community regime for the control of exports, transfer, brokering and transit of dual-use items.
42.
Curran and Eckhardt (2020), p. 151.
43.
European Commission, ‘Commission Staff Working Document: Report on the implementation of the European Commission Communication on “Trade, Growth and Development” and follow-up to the Council Conclusions on “EU’s approach to trade, growth and development in the next decade” (SWD(2016) 47 final)’ (Brussels 25 February 2016) 4.
44.
Borchert and others (2018), p. 12. The principle of a GSP as a scheme linking trade to development was adopted in 1968 at the United Nations Conference on Trade and Development taking place in New Delhi, resolution 21 (II).
45.
Article 19 of Regulation (EU) No 978/2012 of the European Parliament and of the Council of 25 October 2012 applying a scheme of generalised tariff preferences (Chap. 7, n 69).
46.
Cf. Article 15 of Regulation (EU) No 978/2012 of the European Parliament and of the Council of 25 October 2012 applying a scheme of generalised tariff preferences (Chap. 7, n 69), which provides for the withdrawal of preferences under the GSP+ scheme where it is established that the beneficiary country does not respect its obligations arising out of the scheme.
47.
Eeckhout (2012), p. 452.
48.
Borchert and others (2018), pp. 14–16.
49.
Ibid 16, referring to Article 15 of Regulation (EU) No 978/2012 of the European Parliament and of the Council of 25 October 2012 applying a scheme of generalised tariff preferences (Chap. 6, n 39).
50.
Recital 11 of Regulation (EU) No 978/2012 of the European Parliament and of the Council of 25 October 2012 applying a scheme of generalised tariff preferences (Chap. 6, n 39).
51.
Cf. Borchert and others (2018), p. 18 et seq with further references.
52.
European Parliament, Briefing: Human rights in EU Trade Policy – Unilateral Measures (2017) 5.
53.
European Commission, EU triggers procedure to temporarily suspend trade preferences for Cambodia (2019).
54.
European Parliament, Briefing: Human rights in EU Trade Policy – Unilateral Measures (n 52) 8.
55.
Ibid 8–9.
56.
European Commission, ‘Commission Staff Working Document: Midterm Evaluation of the Generalised Scheme of Preferences accompanying the document “Report from the European Commission to the European Parliament and the Council on the application of Regulation (EU) 978/2012 applying a Scheme of Generalised Tariff Preferences and repealing Council Regulation (EC) No 732/2008” (SWD(2018) 430 final)’ (Chap. 4, n 104) 27–29.
57.
Cf. also European Commission, ‘Trade for all – Towards a more responsible trade and investment policy (COM(2015) 497)’ (Chap. 4, n 103) 23: ‘The EU is also in the lead on using trade policy to promote the social and environmental pillars of sustainable development. This is done in a positive, incentive-based way, without any hidden protectionist agenda.’
58.
Bungenberg (2015), pp. 226, 237–238; Bungenberg (2014) para. 82; Kasteng (2013).
59.
Curran and Eckhardt (2020), p. 157.
60.
In detail on the concept of coherence under the Treaty of Lisbon cf. Cremona (2008).
61.
Cf. above p. 207.
62.
Marx and others (2015), p. 6.
63.
Cf. above p. 257 et seq.
64.
Recital 12 of Regulation (EU) 2018/825 (Chap. 1, n 10).
65.
Article 8 (3) BADR and Article 13 (3) BASR.
66.
The ECA furthermore criticises the formalistic approach expressed in the basic regulations, as they only focus on ratification of certain conventions and not on their practical enforcement and the actual level of protection, European Court of Auditors (Chap. 6, n 49) 40, cf. also above p. 190.
67.
Article 2 (6a) lit. a) BADR.
68.
Cf. above p. 174 et seq.
69.
Cf. above p. 238 et seq.
70.
This question has already been addressed in the previous chapter, p. 237 et seq.
71.
Cf. above p. 255.
72.
Cf. above p. 240. Cf. also Bungenberg (2015), pp. 237–238.
73.
The opposite argument, namely that the non-imposition of measures would be beneficial for compliance with standards relating to the protection of workers’ rights and the environment, would run counter to the mechanism of negative conditionality employed by the basic regulations, i.e. making the imposition of trade defence measures dependent upon (non-)compliance with rules on ‘fair’ trade. This line of argument was employed by parties in recital 228 in the Ceramics case, Commission Regulation (EU) No 1072/2012 of 14 November 2012 imposing a provisional anti-dumping duty on imports of ceramic tableware and kitchenware originating in the People’s Republic of China. The argument was not taken up by the Commission.
74.
This must be differentiated from the form and the level of measures being dependent upon compliance with international environmental and labour law, cf. above p. 254. Likewise, the criticism put forward by Curran and Eckhardt (2020) should be recalled.
75.
In theory, the basic regulations could be reformed to make the imposition of measures dependent upon (non-)compliance with TSD standards. This would, however, constitute a fundamental change and do away with the currently existing system of the basic regulations.
76.
Cf. the statement made by the European Parliament already referenced on p. 251: ‘The system’s most effective leverage is not primarily based on the real use of sanctions, but on its strength to act as a deterrent due to the consequences of a potential loss of trade preferences. (…) [I]ncentives, being more effective, are preferable to sanctions.’ European Parliament, Briefing: Human rights in EU Trade Policy – Unilateral Measures (n 52) 8.
77.
European Commission, ‘Non-paper: Feedback and way forward on improving the implementation and enforcement of Trade and Sustainable Development chapters in EU Free Trade Agreements’ (Brussels 26 February 2018) 3.
78.
Furthermore, the existence of a link between the protectionist effects of a trade policy measure and the promotion of non-economic objectives is necessary so that the EU institutions can rely on Articles 3 (5), 21 TEU in adopting these measures, cf. above p. 253 et seq.
79.
Cf. above p. 256.
80.
Cf. above p. 258 et seq.
81.
Article 15 (4) lit. b), (5) and Article 19 (5), (7) of Regulation (EU) No 978/2012 of the European Parliament and of the Council of 25 October 2012 applying a scheme of generalised tariff preferences (Chap. 6, n 39).
82.
European Commission, ‘Commission Staff Working Document: Midterm Evaluation of the Generalised Scheme of Preferences accompanying the document “Report from the European Commission to the European Parliament and the Council on the application of Regulation (EU) 978/2012 applying a Scheme of Generalised Tariff Preferences and repealing Council Regulation (EC) No 732/2008” (SWD(2018) 430 final)’ (Chap. 4, n 104), pp. 27–28.
83.
Article 6 (6), (7) and Article 11 (2) subpara. 3 BADR; Article 11 (6), (7) and Article 18 (3) BASR.
84.
Cf. above p. 259, 263 et seq.
85.
Simoes and Dolle (2017), p. 484, 488.
86.
European Commission, ‘Non-paper: Feedback and way forward on improving the implementation and enforcement of Trade and Sustainable Development chapters in EU Free Trade Agreements’ (Brussels 26 February 2018) 4.
87.
Commission Implementing Regulation (EU) 2019/687 of 2 May 2019 imposing a definitive anti-dumping duty on imports of certain organic coated steel products originating in the People’s Republic of China following an expiry review pursuant to Article 11 (2) of Regulation (EU) 2016/1036 of the European Parliament and of the Council (Chap. 7, n 39) recitals 51–52. This investigation is covered in more detail in the preceding chapter.
88.
This tendency to equate an ‘adequate level of protection’ with the one prescribed in one’s own legislation is also evident in Organic Coated Steel, where the Commission accepted the complainants’ arguments that a lower level of environmental protection contributed to the existence of significant distortions under Article 2 (6a) BADR, cf. above p. 178 et seq.
89.
Curran and Eckhardt (2020), pp. 157–158.
90.
Paris Agreement (FCCC/CP/2015/L.9/Rev.1) (Chap. 7, n 70); cf. also above p. 185.
91.
Cf. also European Commission, ‘Trade for all – Towards a more responsible trade and investment policy (COM(2015) 497)’ (Chap. 4, n 103) 25 et seq.
92.
Annex Ia to the BADR and Annex Ia to the BASR.
93.
Article 19 (1) of Regulation (EU) 2012/978 of the European Parliament and of the Council of 25 October 2012 applying a scheme of generalised tariff preferences (Chap. 6, n 39).
94.
Dimopoulos (2010), p. 167.
95.
European Commission, ‘Factsheet: Europe’s Trade Defence Instruments’ (Chap. 7, n 124) 4.
96.
A standpoint which must be rejected, cf. above p. 255.
97.
For example, several EU Member States have ratified more than 100 ILO Conventions. Spain, the country with the highest number of ratifications, has ratified 133 ILO conventions. Even Estonia, the country with the lowest ratification record, has ratified 39, International Labour Organization, ‘Ratifications by Country’, available at <https://www.ilo.org/dyn/normlex/en/f?p=NORMLEXPUB:11001:0::NO:::>. By contrast, the reformed basic regulations only require compliance with eight core ILO conventions.
98.
On this cf. Shaffer (2019), p. 1, 33 et seq. The WTO compatibility of such an approach would, however, be questionable.
99.
All online sources were last accessed on 8 September 2021.

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Trapp, P. (2022). The EU’s Modernised Trade Defence Instruments: Promoting Sustainable Development in the EU’s Trade Relations?. In: The European Union’s Trade Defence Modernisation Package. European Yearbook of International Economic Law(), vol 23. Springer, Cham. https://doi.org/10.1007/978-3-030-91363-2_8

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DOI: https://doi.org/10.1007/978-3-030-91363-2_8
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