EU to sanction trade partners that flout green, labour values

BRUSSELS • The European Commission proposed yesterday giving the European Union the power to impose sanctions on future free trade agreement partners that disregard labour and environmental standards.

Many of the EU's existing deals, such as with Canada and Japan, and those negotiated but not yet in force, such as with Mexico and Chile, already have chapters on sustainability.

However, disputes in this field are settled by dialogue.

Sanctions, such as revoking trade concessions through tariffs or quotas, are not an option.

Civil society groups and many EU lawmakers have argued that environmental and labour standards should be a central part of the EU's trade strategy and that its green push is toothless.

The Commission, which oversees trade for the 27 EU members, largely agreed at the end of a year-long review.

The EU executive said it would continue to seek dialogue to resolve disputes over labour and the environment, some of which go to an adjudicating panel. Under the proposal, the EU could impose sanctions as a last resort if the panel rules against a trading partner. The proposal comes two days after 15 EU members wrote to EU Trade Commissioner Valdis Dombrovskis urging the bloc to accelerate the conclusion of free trade agreements.

There is a risk that incorporating a sanctioning system could drag out the process even more.

Sanctions would be triggered for breaching the Paris climate change agreement or the core principles of the International Labour Organisation such as child labour.


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A version of this article appeared in the print edition of The Straits Times on June 23, 2022, with the headline EU to sanction trade partners that flout green, labour values. Subscribe