Enforcing Trade and Sustainable Development Chapters of EU Free Trade Agreements through the Essential Elements Clauses
The recent United Nations General Assembly resolution that recognized the universal human right to a clean, healthy, and sustainable environment was welcomed by environmentalists who hold the hope that it will help to tackle the ever-pressing climate crisis. The UNGA Resolution, which was adopted on 28th of July (UNGA, 2022) following the resolution of the United Nations Human Rights Council almost a year ago on the same matter (UNHCR, 2021), will impact a wide range of areas.
One of these areas, that may not immediately come to mind in this context, is the promotion of environmental protection and labour standards through EU FTAs. The TSD chapters have been a standard part of the EU FTAs since 2011. However, their enforcement received intense criticisms, due to several factors ranging from the exclusion from the binding dispute settlement mechanism of the FTAs to the vague formulation of the articles. (Cross, 2017) This ‘compliance gap’ between the commitments undertaken and their realization has become the centre of the discussion. (Prévost & Alexovičová, 2019)
The acceptance of a human right to a healthy environment can be a way to remedy these drawbacks of enforcement of these chapters by enabling the use of the essential elements clauses (EECs) in the event of a breaches. The EECs are a standard part of FTAs or the framework agreements that the FTAs fall under and appear in slightly different forms. They generally state that respect for human rights, democratic principles and rule of law constitute an essential element of the agreement, violation of which will constitute a material breach of the agreement under Article 60 of 1969 Vienna Convention on the Law of Treaties. Therefore, the EECs bring a human rights conditionality to the FTAs and in the event of such a breach, they allow the suspension of the agreement or adoption of other appropriate measures. This post briefly explores this option and analyses the implications of such an enforcement of the TSD chapters through the EEC.
While the broader discussion on whether labour rights are human rights continues among scholars, the human rights status of the core rights enshrined in the 1998 Convention of International Labour Organization and referred by the TSD chapters in EU FTAs are widely accepted by the international community. These four core rights* regard to freedom of association and right to collective bargaining, elimination of compulsory labour, abolition of child labour and the elimination of discrimination. However, whether environmental protection falls within the general body of human rights was questionable. Consequently, the choice of the EU to regulate labor standards as a part of TSD chapters was criticized as weakening the human rights status of labour rights due to the lack of such a status of environmental protection. (Van den Putte & Orbie, 2015)
Now that the right to a clean, healthy, and sustainable environment has been recognised as a human right by the UNGA, both this right and the four core labour rights can be pursued under the EECs as part of the body of human rights rules. This comes with possible procedural and substantive advantages.
Two procedural advantages can be identified. First, such an enforcement can remedy the problem of the TSD being excluded from the general dispute settlement mechanism of the FTAs. They are subject to a special regime where only recommendations can be issued by a panel of experts after governmental consultations. The EECs also require a consultation procedure before measures can be taken by a party. After the measure is taken, however, no separate procedure of enforcement or an explicit exclusion is foreseen for EECs. Thus, a dispute arising will be subject to the regular dispute settlement mechanism foreseen by the FTA that resolves the dispute in a legally binding way.
A paratheses should be opened at this point. A more assertive approach was finally announced by the will be adopted by the European Commission (EC) in its communication of June 2022 that includes the possibility of trade sanctions, tough only as a nuclear option for certain commitments. Additionally, the general dispute settlement mechanism (DSM) of the FTA will be extended to the cover the TSD chapters. However, these long-awaited changes will only be applicable for the future EU FTAs where they are codified. Therefore, for all FTAs of the EU that are currently in force, the TSD enforcement problem and thus the relevance of enforcement through EEC remain
Second, enforcement through EEC makes a wider range of actions available. In theory, the EU can walk away from an FTA in the event of a breach of TSD chapters following the Opinion 2/15 of the Court of Justice of the EU, (Opinion 2/15) which affirms that EU can suspend an FTA in event of a violation of the obligations arising from the TSD chapters. However, this “take it or leave it” option is unlikely to be used due to its excessive impact on the relations with the trading partner and the EU’s hesitance to even trigger the current soft mechanisms. Enforcement through the EEC, however, provides wider room for manoeuvre and gives the EU the ability to take more appropriate measures. An appropriate measure under an EEC can take the form of suspension of a specific commitment under the FTA, including financial or trade benefits given to the other party.
This brings us to the substantive advantage of enforcement the EEC can provide. One of the main criticisms brought against the TSD chapters is the way the provisions were formulated; the vagueness and absence of clear legally binding implications prevent the parties to claim and establish a violation. Hence, the option under Opinion 2/15 has only a limited practical value because establishing such a breach in itself is a big problem.
By explicitly referring to international human rights instruments such as Universal Declaration of Human Rights or European Convention on Human Rights, the EEC incorporates the definitions of rights made under these instruments as well as their binding interpretation provided by the relevant judicial bodies, such as European Court of Human Rights. Thus, the content of the rights will not only depend on the TSD chapter anymore but will be determined together with the international human rights documents referred to in the EEC. If a violation cannot be established under the vague and soft wording of TSD chapters, it could possibly still be established under the definition of the right in question available under international human rights documents that are operative and legally binding.
While sometimes a closed list of documents is given where only the ones explicitly listed are applicable, most of the EECs provide an open list where relevant documents are applicable even if they not mentioned explicitly. The EEC in the Framework Agreement with Korea is an example of open list formulation and states that parties shall respect “… human rights and fundamental freedoms as laid down in the Universal Declaration of Human Rights and other relevant international human rights instruments…”.
While the potential of enforcing TSD chapters through EEC is exciting for the promotion of sustainable development internationally, concerns remain. The EU has been criticized, among others by the European Parliament, for being reluctant to make use of EECs even in the face of persistent human rights violations (EP, 2009). It has been affirmed by the CJEU that the EECs give the EU a right to take appropriate measures, but not an obligation (C-581/11 P). As the EEC has only been enforced in exceptional cases, i.e., with grounds including coup d’état and flawed elections, we are yet to see whether the true potential of enforcing TSD through EEC will be realized.
*A fifth right, namely the right to a safe and healthy working environment has been added by the amendment made in June 2022. As this is not regulated in the EU FTAs, it is left out of the scope of this post.