It is almost universally acknowledged that increased trade brings increased wealth. But there is nothing automatic about this wealth being shared fairly amongst those in society, and nothing automatic that says this growth will be achieved in a sustainable manner.
This is why trade needs strong rules to go alongside market-opening. Modern trade agreements have the potential to set these rules, and the EU should therefore be using these deals to promote high social and environmental standards across the globe.
The EU’s external trade regime has been a success by many measures: One in seven jobs in Europe now depend on exports to the rest of the world, and global markets have been essential for EU firms and their workers in a time of recession at home.
However, it is also clear that under-regulated globalisation has left many behind, leading to a popular backlash and renewed calls for protectionism.
The Socialist and Democratic Group in the European Parliament has ten progressive principles for a new era of trade agreements:
1. Benefits for the many and not just the few
The first objective of trade agreements should be to benefit the widest possible range of citizens. Trade deals should contribute to sustainable economic growth and jobs in the EU and in partner countries.
2. Values-based policy
As well as goods and services, the EU should export its values, in particular in terms of labour, social and environmental standards. A trade and sustainable development chapter including the ILO’s core labour rights and corporate social responsibility provisions must be included in all EU trade agreements. The S&Ds will continue to push for these provisions to be enforceable.
3. Transparency and citizen involvement
Negotiations should be carried out as much as possible in an open and transparent manner. There must be no turning back on our hard-fought gains on transparency in ongoing negotiations. The Council must publish all new and previously adopted negotiating mandates automatically, and the policy-making process should be based on meaningful dialogue with civil society, trade unions and the ILO.
4. No-one left behind
Those disadvantaged by trade opening should be properly compensated. This includes helping workers adapt to change, and improving support for those who lose their jobs as a result of foreign competition produced by globalisation, focusing particularly on the manufacturing sector. The Commission should provide more complete impact assessments, evaluate and update policy tools like the European Globalisation Adjustment Fund (EGF) or consider setting up a system akin to the ‘US Trade Adjustment Assistance’.
5. SMEs as key players
SMEs are the lifeblood of the European economy and should also benefit from trade deals. There should be a chapter in every agreement on how to lower global trade costs for small businesses in order to integrate SMEs into the global market.
6. Multilateralism as the first best option
When possible, the EU should always push for multilateral solutions in the context of the WTO. Efforts to complete the Doha Development Agenda should continue in parallel in order to make sure that developing countries continue to play a role in international trade. Free trade agreements (FTAs) should not be a threat to the multilateral trading system, rather a stepping-stone towards multilateral trade agreements.
7. Governments free to legislate in the public interest
There should be no undermining of national laws and governments’ right to regulate. Under pressure from our group, the Commission has abandoned Investor-State Dispute Settlement (ISDS) and removed it from CETA.
8. Protection of public services
European, national and local authorities must retain the full right to introduce, adopt, maintain or repeal measures related to the commissioning, organisation, funding and provision of public services.
9. Human and social rights at the heart of trade policy
Trade policy must reinforce corporate social responsibility initiatives and compel companies to take responsibility for all stages of the supply chain. We should move beyond the current voluntary approach towards one of mandatory due diligence, as the S&Ds have successfully introduced into the Conflict Minerals proposal.
10. EU standards must be preserved
It must be clear that EU free trade agreements will not lead to any lowering of EU health, security and environmental standards and the precautionary principle will be preserved.