European Commission unveils new approach for trade agreements to promote ‘green and just growth’

Photo by Sara Kurfeß on Unsplash

On 22 June, the European Commission unveiled a new plan to enhance the contribution of EU trade agreements in protecting the climate, environment and labour rights worldwide.

In its Communication on “The power of trade partnerships: together for green and just economic growth”, the Commission has put forward how to further strengthen the implementation and enforcement of Trade and Sustainable Development (TSD) chapters of the EU’s trade agreements.

Executive Vice-President and Commissioner for Trade, Valdis Dombrovskis, commented on the announcement: “We promised to make trade more sustainable and today we are delivering.

“Our trade agreements give us clout on the world stage and support economic growth and sustainable development – but as of now, we want to make them an even bigger driver of positive change.

“We will engage and support our partners to make this happen. We will step up our enforcement, and we will resort to sanctions if key labour and climate commitments are not met.”

All EU’s modern trade agreements include chapters on trade and sustainable development, with a broad set of mutually agreed commitments. The Communication identifies policy priorities and key action points, which are set to further enhance the effectiveness of the current engagement-based approach to TSD, grounded in the international framework and standards, with stronger implementation and enforcement.

In particular, the new approach will include the use of trade sanctions for breaches of core TSD provisions. It will be applied to future negotiations and to ongoing negotiations as appropriate.

The new approach to TSD includes following aspects:

  • Extending the standard state-to-state dispute settlement compliance phase to the TSD chapter of their trade agreements, meaning that the party found in violation of any of the TSD commitments will have to promptly inform how it will implement the panel report, and comply within a certain period of time.
  • Including the possibility to apply, as a last resort, trade sanctions for material breaches of the Paris Climate Agreement and the ILO fundamental labour principles.
  • Making it easier for civil society and Domestic Advisory Groups to lodge complaints on violations of sustainability commitments. The EU is introducing timelines that the Commission will follow as general rule to treat TSD complaints through an update of the Operating Guidelines for the Single Entry Point.

More information about this announcement is available on the European Commission website.