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Non-Economic Values and Objectives in EU Trade Policy: Different Models of Externalization and Enforcement

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Global Politics and EU Trade Policy

Part of the book series: European Yearbook of International Economic Law ((Spec. Issue))

Abstract

The Treaty of Lisbon formally empowered the EU to conduct its trade policy in the light of a wide set of non-economic values and objectives such as human rights, sustainable development or international security, to name just a few. Clearly, this task of diffusing and safeguarding non-economic values externally poses a challenge for the EU and its trade policy. This paper aims at examining this challenge by providing a cross-cutting overview of the different ways and models of externalization of non-economic values that the EU can resort to in the field of international trade. In particular, the paper focuses on the mechanisms that accompany those models and which are there to ensure compliance with the envisaged values. The paper focuses on unilateral and bilateral action of the EU in the field of international trade and has both instrumental and conceptual character trying to review the general characteristics of the existent models and the respective ‘compliance mechanisms’ and the challenges attached to them.

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Notes

  1. 1.

    Marise Cremona, ‘Distinguished Essay: A Quiet Revolution—The Changing Nature of the EU’s Common Commercial Policy’ in Marc Bungenberg, Markus Krajewski, Christian Tams, Joerg Philipp Terhechte, Andreas R Ziegler (eds), European Yearbook of International Economic Law 2017 (Springer 2017), 4.

  2. 2.

    Ibid 5.

  3. 3.

    For a broad discussion on the non-commercial principles, values and objectives within the framework of the CCP see Alessandra Asteriti, ‘Article 21 TEU and the EU’s Common Commercial Policy: A Test of Coherence’ in Marc Bungenberg, Markus Krajewski, Christian Tams, Joerg Philipp Terhechte, Andreas R Ziegler (eds), European Yearbook of International Economic Law 2017 (Springer 2017), 119 - 124. For a discussion on the content and meaning of Art. 21 in the context of Common Foreign and Security Policy see Luigi Lonardo, ‘Common Foreign and Security Policy and the EU’ external action objectives: an analysis of Article 21 of the Treaty on the European Union’ (2018) 14 European Constitutional Law Review 584.

  4. 4.

    Joris Larik, ‘Sincere Cooperation in the Common Commercial Policy: Lisbon, a “Joined-Up” Union, and “Brexit”’ in Marc Bungenberg, Markus Krajewski, Christian Tams, Joerg Philipp Terhechte, Andreas R Ziegler (eds), European Yearbook of International Economic Law 2017 (Springer 2017), 84-85.

  5. 5.

    Asteriti supra note 3 at 133.

  6. 6.

    See Cremona supra note 1 at 11. The mentioned Treaty provisions only codify what has always been a feature of trade policy.

  7. 7.

    See Opinion 1/78 [1979] ECR 2871, para 44 where the Court acknowledged that the existence of a link with development problems does not cause a measure to be excluded from the CCP. In the opinion of the Court, it would no longer be possible to execute any meaningful CCP if the EU could not avail itself of instruments going beyond those intended to have an effect on the traditional aspects of trade only. This was confirmed in cases 45/86 Commission vs Council [1987] ECR 1493, C-62/88 Hellenic Republic v Council of the European Communities [1990] ECR I-1527 and C-281/01 Commission vs Council [2002] ECR I-12049 both later cases concerning the goal of environmental protection.

  8. 8.

    See also Giovanni Gruni, ‘Towards a Sustainable World Trade Law? The Commercial Policy of the European Union After Opinion 2/15 CJEU’ (2018) 13 Global Trade and Customs Journal 4, 5.

  9. 9.

    Opinion 2/15 [2017] CJEU, para 143. This is in the opinion of the Court, “apparent from the second sentence of Article 207(1) TFEU read in conjunction with Article 21(3) TEU and Article 205 TFEU.” Hence, as argued by Cremona, the chapter on trade and sustainable development in the Singapore Agreement could be seen as an integral part of trade policy, Marise Cremona, ‘Shaping EU trade Policy post-Lisbon: opinion 2/15 of 16 May 2017’ (2018) 14 European Constitutional Law Review 231, 242.

  10. 10.

    Council of the European Union, ‘EU Strategic Framework and Action Plan on Human Rights and Democracy, Luxembourg’ (2012), available at <https://www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/EN/foraff/131181.pdf>.

  11. 11.

    European Commission, ‘Trade for all - Towards a more responsible trade and investment policy’ (2015) 21.

  12. 12.

    Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions, ‘A Balanced and Progressive Trade Policy to Harness Globalisation’, Brussels, COM(2017) 492 final, 4.

  13. 13.

    See Chad Damro, ‘Market Power Europe’ (2012) 19 JEPP 682-699; Anu Bradford, ‘The Brussels Effect’ (2012) 107 Northwestern University Law Review 1; Anu Bradford, ‘Exporting Standards: The Externalization of the EU’s Regulatory Power via Markets ‘ (2015) 42 International Review of Law and Economics 158; Annegret Bendiek, Magnus Römer, ‘Externalizing Europe: the global effects of European data protection’ (2019) 21 Digital Policy, Regulation and Governance 1, 32-43; Ian Manners, ‘Normative Power Europe: a contradiction in terms?’ (2002) 40 Journal of Common Market Studies 2, 235-258; Joanne Scott, ‘Extraterritoriality and Territorial Extension in EU Law’ (2014) 62 American Journal of Comparative Law 1, 87-126; Urszula Jaremba, Machiko Kanetake, Ingrid Koning, ‘Economic and non-economic values and objectives in the EU’s international trade: Normative tensions, actors and processes’ (2019) 3 Europe and the World: A Law Review 1, 1-4; Bjorn Kleizen, ‘Externalizing EU law, policy and values. Europe’s global identity, mechanisms of rule transfer and case studies on illegal loging and Bosnia and Herzegovina’ (2015) RENFORCE Working Paper Series 1.

  14. 14.

    Bradford (2012) supra note 13 at 35.

  15. 15.

    Bradford (2012) supra note 13 at 1-3.

  16. 16.

    See the Chapter by Furculita in this volume.

  17. 17.

    Action at the multilateral level is left outside the scope of this contribution.

  18. 18.

    See the definition by Oran Young, Compliance and Public Authority: A Theory with International Applications (Johns Hopkins University Press 1979) 3: “Compliance can be said to occur when the actual behavior of a given subject conforms to prescribed behavior, and non-compliance or violation occurs when actual behavior departs significantly from prescribed behavior.”

  19. 19.

    Francis Snyder, ‘The Effectiveness of European Community Law: Institutions, Processes, Tools and Techniques’ (1993) 56 Modern Law Review 19, 26 who lists enforcement, implementation and compliance as preconditions of effectiveness.

  20. 20.

    Bradford (2012) supra note 13.

  21. 21.

    Bradford (2012) supra note 13 at 3.

  22. 22.

    Bradford (2012) supra note 13 at 3.

  23. 23.

    Bradford (2012) supra note 13 at 12.

  24. 24.

    Bradford (2012) supra note 13 at 4.

  25. 25.

    See Art. Article XXIV General Agreement on Tariffs and Trade for a broad definition of such agreements.

  26. 26.

    Jonas Kasteng, Stefano Inama, The Use of the EU’s Free Trade Agreement. Exporter and Importer Utilisation of Preferential Tariffs (2018) National Board of Trade Sweden, 2.

  27. 27.

    European Commission (2015) supra note 11 at 15.

  28. 28.

    See the website of the European Commission for the up-to-date and complete lists: <http://ec.europa.eu/trade/policy/countries-and-regions/negotiations-and-agreements/>.

  29. 29.

    Interchangeably called second generation or modern FTAs, see <http://trade.ec.europa.eu/doclib/press/index.cfm?id=1933>.

  30. 30.

    Frank Dobbin, Beth Simmons, Geoffrey Garrett, ‘The Global Diffusion of Public Policies: Social Construction, Coercion, Competition, or Learning?’ (2007) 33 Annual Review of Sociology, 449-472.

  31. 31.

    The Office of the United Nations High Commissioner for Human Rights <https://www.ohchr.org/EN/NewsEvents/Seminars/Pages/WorkshopCoerciveMeasures.aspx>.

  32. 32.

    European Commission, ‘Sanctions or restrictive measures’ (2008) <http://eeas.europa.eu/archives/docs/cfsp/sanctions/docs/index_en.pdf>.

  33. 33.

    Jonathan Jacob Ring, ‘The diffusion of norms in the international system’ (2014) University of Iowa Research Online, Theses and Dissertations, 31 <https://ir.uiowa.edu/cgi/viewcontent.cgi?article=5425&context=etd>.

  34. 34.

    Chad Damro supra note 13 at 683. The author refers to intentional and unintentional exercise of EU power in international affairs. A relevant example falling within the first category is the EU Regulation 1223/2009 on cosmetic products [2009] OJ L342/59, which inter alia bans marketing products that were subject to animal testing. The key aim of the regulation is the protection of human health but it also aims at the protection and welfare of animals. As observed in scholarship, this regulation “definitely affected Japanese companies”, see Yumiko Nakanishi, ‘EU Free Trade Agreements in a Legal Context: A Japanese Perspective’ in Marc Bungenberg, Markus Krajewski, Christian Tams, Jeorg Philipp Terhechte, Andreas R Ziegler (eds), European Yearbook of International Economic Law 2017 (Springer 2017) 471.

  35. 35.

    Regulation (EU) No 995/2010 of the European Parliament and of the Council of 20 October 2010 laying down the obligations of operators who place timber and timber products on the market [2010] OJ L295/23 and Commission Implementing Regulation (EU) No 607/2012 of 6 July 2012 on the detailed rules concerning the due diligence system and the frequency and nature of the checks on monitoring organizations as provided for in Regulation (EU) No 995/2010 of the European Parliament and of the Council laying down the obligations of operators who place timber and timber products on the market [2012] OJ L177/16.

  36. 36.

    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 area. The regulation is part of the EU Action Plan for Forest Law Enforcement, Governance and Trade (FLEGT) [2017] OJ L130/1.

  37. 37.

    Environmental policy.

  38. 38.

    Kleizen (2015) supra note 13 at 24.

  39. 39.

    The concept of due diligence implies that economic operators must exercise risk management in order to minimize the risk of placing illegally harvested timber or products containing illegally harvested timber on the EU market. See the website of the Commission: <http://ec.europa.eu/environment/forests/timber_regulation.htm#diligence>.

  40. 40.

    Report from the Commission to the European Parliament and the Council, Regulation (EU) No 995/2010 of the European Parliament and of the Council of 20 October 2010 laying down the obligations of operators who place timber and timber products on the market (the EU Timber Regulation), Biennial report for the period March 2015 - February 2017, Brussels 2018.

  41. 41.

    More on the obligations of operators and traders in Dylan Geraets, Brengt Natens, ‘Governing through trade in compliance with WTO law: a case study of the European Union Timber Regulation’ in Jan Wouters, Axel Marx, Dylan Geraets, Brengt Natens (eds), Global Governance through Trade: EU Policies and Approaches (Edward Elgar 2015) 272-302.

  42. 42.

    The list of the competent authorities can be found at <http://ec.europa.eu/environment/forests/pdf/LIST% 20of%20CAs%20(EUTR)%20%20updated%2002APR2019.pdf>.

  43. 43.

    Art. 20(1) EUTR.

  44. 44.

    Art. 19 EUTR.

  45. 45.

    Present in 13 countries.

  46. 46.

    In 10 countries.

  47. 47.

    In two countries. Report from the Commission to the European Parliament and the Council (2018) 4. Four countries did not specify the nature of the penalties.

  48. 48.

    Report from the Commission to the European Parliament and the Council supra note 40 at 12.

  49. 49.

    Ibid.

  50. 50.

    Ibid.

  51. 51.

    Ibid.

  52. 52.

    In the report the Commission observes that the technical capacity and resources at the disposal of the national authorities does not always correspond to the needs and must be strengthened in most of the Member States. In 2017, the Commission issued a letter of formal notice to Belgium with regard to the quantity and quality of checks conducted by its authorities and a reasoned opinion to Slovakia regarding the rules on penalties applicable to infringements of the Regulation for imported timber.

  53. 53.

    Regulation (EU) 2017/821 (n 35), art. 1.

  54. 54.

    However, it excludes countries such as Ghana that are not conflict-affected or failed, but in which established links exist between grave human rights violations and minerals extraction, Daniel Iglesias Marquez, ‘The EU Conflict Minerals Regulation: Challenges for Achieving Mineral Supply Chain Due Diligence’ (Doing Business Right 27 November 2017) <http://www.asser.nl/DoingBusinessRight/Blog/post/the-eu-conflict-minerals-regulation-challenges-for-achieving-mineral-supply-chain-due-diligence-by-daniel-iglesias-marquez>.

  55. 55.

    In practice it means that economic operators in third countries are obliged to comply with the OECD Guiding Note for Upstream Companies Risk Assessment in order to access the EU market.

  56. 56.

    Articles 10-11 CMR.

  57. 57.

    Article 13(1) CMR.

  58. 58.

    Article 16(1) CMR.

  59. 59.

    Article 16(3) CMR. In the case of an infringement of the Regulation, competent authorities issue a notice of remedial action that the EU importer must take.

  60. 60.

    Bradford (2012) supra note 13 at 41.

  61. 61.

    Bradford (2012) supra note 13.

  62. 62.

    Bradford (2012) supra note 13at 44.

  63. 63.

    Bradford (2012) supra note 13 at 45.

  64. 64.

    Bradford (2012) supra note 13 at 38.

  65. 65.

    Bradford (2012) supra note 13 at 45.

  66. 66.

    Bradford (2012) supra note 13.

  67. 67.

    Bradford (2012) supra note 13 at 45.

  68. 68.

    Ian J Manners, ‘Assessing the decennial, reassessing the global: understanding European Union normative powers in global politics’ (2013) 48(2) Cooperation and Conflict 304, 316.

  69. 69.

    Piet Eeckhout, ‘Future trade relations between the EU and the UK: options after Brexit’ (2018) European Parliament, 6.

  70. 70.

    European Commission, CETA Factsheet, available at: <http://trade.ec.europa.eu/doclib/docs/2017/september/tradoc_156061.pdf>.

  71. 71.

    This agreement provisionally entered into force in July 2011.

  72. 72.

    Chapters 22 to 24 of CETA.

  73. 73.

    See art 23.4 and 24.5 of CETA: “The Parties recognize the right of each Party to set its environmental priorities, to establish its levels of environmental protection, and to adopt or modify its laws and policies accordingly and in a manner consistent with the multilateral environmental agreements to which it is party and with this Agreement.”

  74. 74.

    Council of the European Union, Joint Interpretative Instrument on the Comprehensive Economic and Trade Agreement (CETA) between Canada and the European Union and its Member States, Brussels, 27 October 2016, p.3.

  75. 75.

    Articles 23.4 and 24.5 of CETA.

  76. 76.

    Gruni supra note 8 at 7.

  77. 77.

    For any dispute that arises under this Chapter, the Parties shall only have recourse to the rules and procedures provided in this Chapter.

  78. 78.

    Thomas Fritz, ‘Analysis and Evaluation of the Comprehensive Economic and Trade Agreement (CETA) between the EU and Canada’ (Hans-Böckler-Foundation 2015) 29.

  79. 79.

    See Kateřina Hradilova, Ondřej Svoboda, ‘Sustainable Development Chapters in the EU Free Trade Agreements: Searching for Effectiveness’ (2018) 52(6) Journal of World Trade, 1028-1031 for a more detailed analysis.

  80. 80.

    See article 23.11 CETA.

  81. 81.

    Article 23.11.3 CETA.

  82. 82.

    Article 23.10.11 CETA.

  83. 83.

    Article 23.10.12 CETA.

  84. 84.

    James Harrison et al, ‘Labour Standards Provisions in EU Free Trade Agreements: Reflections on the European Commission’s Reform Agenda’ (2018) World Trade Review, 6.

  85. 85.

    Gruni supra note 8 at 6. The author suggests that the EU could consider the EU social and environmental acquis as a standard to be attained during FTA negotiations.

  86. 86.

    Business Europe, Position paper ‘Trade and Sustainable Development chapters in EU FTAs’ (2017) 3 <https://www.businesseurope.eu/sites/buseur/files/media/position_papers/rex/2017-11-06_sustainability_and_ftas.pdf>.

  87. 87.

    European Parliament, Trade and sustainable development Chapters in CETA. Briefing, 1 <http://www.europarl.europa.eu/EPRS/EPRS-Briefing-595894-Trade-sustainable-development-chapters-CETA-FINAL-old.pdf>.

  88. 88.

    Gruni supra note 8 at 6.

  89. 89.

    Maria Garcia, ‘Trade and Social Impacts: Are the EU’s New Trade and Sustainability Chapters Fit for Purpose’ (2016) 2 <https://www.oefse.at/fileadmin/content/Downloads/tradeconference/Garcia_Trade_and_Social_Impacts_Are_the_EUs_new_Trade_and_Sustainability_Chapters_fit_for_purpose.pdf>.

  90. 90.

    Hradilova, Svoboda supra note 78 at 1020.

  91. 91.

    Based on Articles 38-43 TFEU.

  92. 92.

    Cremona supra note 1 at 20.

  93. 93.

    See website of Food and Agriculture Organisation of the United Nations, <http://www.fao.org/iuu-fishing/background/what-is-iuu-fishing/en/>.

  94. 94.

    Gilles Hosch, ‘Trade Measures to Combat IUU Fishing: Comparative Analysis of Unilateral and Multilateral Approaches’ (International Centre for Trade and Sustainable Development 2016), 4-5; Margaret A Young, ‘Trade-Related Measures to Address Illegal, Unreported and Unregulated Fishing’ (International Centre for Trade and Sustainable Development and World Economic Forum 2015), 2.

  95. 95.

    See Hosch supra note 93 at 9-26 for the different multilateral trade-related measures addressing the problem of sustainable fisheries management.

  96. 96.

    Hosch supra note 93 at 4.

  97. 97.

    Council Regulation (EC) No 1005/2008 establishing a Community System to Prevent, Deter and Eliminate Illegal, Unreported and Unregulated (IUU) Fishing [2008] OJ L286/1. The regulation entered into force in 2010. Before the IUU Regulation entered into force, approximately 500,000 tons of IUU fisheries were estimated to enter the EU each year, from Victoria Mundy, ‘The impact of the EU IUU Regulation on seafood trade flows: Identification of intra-EU shifts in import trends related to the catch certification scheme and third country carding process’ (Environmental Justice Foundation, Oceana, The Pew Charitable Trusts, WWF 2018), 4.

  98. 98.

    See Art 1(1) IUU Regulation.

  99. 99.

    Damro supra note 13.

  100. 100.

    From Communication from the Commission to the European Parliament and the Council On the application of Council Regulation (EC) No 1005/2008 establishing a Community system to prevent, deter and eliminate illegal, unreported and unregulated fishing (COM(2015) 480 final), 5.

  101. 101.

    Art. 12 IUU Regulation.

  102. 102.

    Seafood exported to the EU must possess catch certification. See Hosch supra note 93 at 28-32 and Christel Elvestad, Ingrid Kvalvik, ‘Implementing the EU-IUU Regulation: Enhancing Flag State Performance Through Trade Measures’ (2015) 46(3) Ocean Development & International Law 241, 244-245 for a more detailed analysis of the CCS.

  103. 103.

    Art. 31(1) EU IUU Regulation.

  104. 104.

    Elvestad and Kvalvik supra note 101 at 245.

  105. 105.

    Art. 31(3) EU IUU Regulation.

  106. 106.

    See Art. 38 EU IUU Regulation for the entire list of consequences.

  107. 107.

    Art. 32(1) EU IUU Regulation. Mundy supra note 97 at 4.

  108. 108.

    Art. 32(4) IUU Regulation.

  109. 109.

    See for instance commission Implementing Decision of 26 November 2013 identifying Belize, the Kingdom of Cambodia and the Republic of Guinea as non-cooperating third countries, 2013/C 346/02.

  110. 110.

    Art. 33(1) EU IUU Regulation. The decision is made by a qualified majority and the list of non-cooperating third countries is made public in the Official Journal of the European Union, see art 35 IUU Regulation.

  111. 111.

    Art. 33(3) IUU Regulation.

  112. 112.

    Art. 33(3) IUU Regulation.

  113. 113.

    Art. 34 IUU Regulation.

  114. 114.

    Art. 34(1) EU IUU Regulation.

  115. 115.

    See Mundy supra note 97 at 37 and Elvestad and Kvalvik supra note 101 at 249-250.

  116. 116.

    Elvestad and Kvalvik supra note 101 at 252.

  117. 117.

    Those included major exporters such as Thailand and Taiwan. However, 48 percent of the identified countries were not exporting seafood to the EU at the time of their identification, see Mundy supra note 97 at 35.

  118. 118.

    Belize, Cambodia, the Comoros, Guinea, Saint Vincent and the Grenadines, Sri Lanka.

  119. 119.

    Mundy supra note 97 at 7. See also p. 35 for the compiled list of countries having been yellow, red or green carded by the EU.

  120. 120.

    Elvestad and Kvalvik supra note 101 at 250. Mundy supra note 97 at 48.

  121. 121.

    Elvestad and Kvalvik supra note 101 at 253.

  122. 122.

    Mundy supra note 97 at 49 who observes that “A unilateral identification and sanctioning process is likely to be more effective in changing the behaviour of countries that are generally understood to be a part of the IUU fishing problem if they export significant amounts of seafood to the market imposing the sanctions, they value the revenue generated in that market, and seek to maintain market access. If soft flag, port, and processing states among the major producer countries can be pushed into becoming more responsible, through the use of transparent and fair trade measures, the impact of unilateral TREMs could be substantial.”

  123. 123.

    Elvestad and Kvalvik supra note 101 at 241.

  124. 124.

    Cremona supra note 1 at 12.

  125. 125.

    Bradford (2012) supra note 13 at 35.

  126. 126.

    Damro supra note 13 at 690.

  127. 127.

    Maria Garcia, supra note 89 at 22.

  128. 128.

    Business Europe, ‘EU Trade Policy at the Crossroads: between Economic Liberalism and Democratic Challenges’ (2016) 3 <https://www.businesseurope.eu/sites/buseur/files/media/position_papers/rex/2017-11-06_sustainability_and_ftas.pdf>.

  129. 129.

    Cremona supra note 1 at 11.

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Jaremba, U. (2020). Non-Economic Values and Objectives in EU Trade Policy: Different Models of Externalization and Enforcement. In: Weiß, W., Furculita, C. (eds) Global Politics and EU Trade Policy. European Yearbook of International Economic Law(). Springer, Cham. https://doi.org/10.1007/978-3-030-34588-4_8

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