Originally, only a handful of countries incorporated sustainability provisions in their agreements; now they are a standard feature in most FTAs.
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Moreover, the scope of sustainability issues in FTAs has gradually increased, covering not only human rights, but also specific labour and environmental issues. Over time, also the language evolved beyond mere dialogue provisions towards more substantive provisions: agreements increasingly used specific language on cooperation as well as enforcement mechanisms, procedural guarantees and dispute settlement procedures as well as market access conditions.
Countries also progressively highlighted the importance of international standards in FTAs, for example by referencing multilateral environmental agreements MEAs which also set out specific trade obligations, or by reaffirming relevant ILO declarations on social sustainability. Considering these different types of provisions, there are mainly two ways in which sustainability provisions in FTAs can relate to domestic standards. The first way is by referencing international agreements or declarations such as the MEAs or ILO declarations in the FTAs and requiring them to be manifested in domestic law of the parties.
This can be done by reaffirming commitments or obligations under these agreements, or by stating the need of domestic law to reflect specific agreements or declarations. A second way is by introducing specific market access conditions, such as trade conditions or import requirements related to sustainability measures. They are normally accompanied by provisions that outline what happens when countries diverge on their domestic standards, or how they tackle procedural differences in their regulatory systems or standards, and the way that compliance with them are ensured.
These provisions can be related to equivalence, science and risk analysis, audits, import checks, regional conditions and dispute settlement. In this chapter we will provide a comparison on how different FTAs address various measures of sustainability. The comparative analysis of the FTAs is focused on different main themes identified. The FTA provisions have been divided into five different overarching themes. Four of these themes cover the first way in which sustainability can relate to domestic standards.
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These themes are: labour, the environment, trade and sustainable development TSD , as well as enforcement and cooperation mechanisms. A fifth theme, market access, covers the second way.
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This includes the freedom of association and collective bargaining, the elimination of forced labor, the abolition of child labor and the elimination of employment discrimination. Concerning the upholding of standards, the existing labour standards may not be lowered or not enforced to increase trade and investment CETA, EU-Korea. No Party shall derogate from its statutes or regulations implementing labour rights in a manner affecting trade or investment between the parties and labour standards should not be used for protectionist purposes EU-Japan, EU-Mexico, New Zealand-Korea.
They both also include a long list of areas of cooperation on labour Art. The USMCA labour chapter includes new provisions to take measures to prohibit the import of goods produced by forced labor, to address violence against workers exercising their labor rights, and to ensure that migrant workers are protected under labor laws. Canada and Chile have a very detailed, separate agreement on labour cooperation. The Canada-Chile FTA created a work plan to promote the exchange of information and knowledge between both countries.
A provision for complaint and conflict resolutions procedures in relation to labour laws facilitates solutions without resorting to formal channels of dispute resolution. The update also includes procedural enhancements to the investor-state dispute settlement mechanism with respect to preliminary objections, awarding of costs, ethical considerations, third-party funding, and transparency.
Furthermore, the parties have added provisions that encourage alternatives to arbitration, such as mediation and consultation. The agricultural sector can be sustainable, if it is not only ecologically, but also socially responsible. Moreover, sustainable agriculture is more labour intensive than conventional farming.
The Agreement has fostered capacity-building and collaborative research on issues of importance to Canada and Chile. Recent cooperative activities have focused on protected areas, climate change, conservation of shared migratory species, contaminated sites, air quality, environmental information systems, chemicals management, indigenous participation in environmental decision-making, and greenhouse gas emissions reductions.
The agreements emphasize the importance of MEAs and reaffirm commitment of the parties to implement the MEAs to which they are party. The new sanitary and phytosanitary SPS chapter of the modernised Canada-Chile FTA provides scope for better communication and cooperation to address issues in agricultural products while maintaining the rights of parties to take measures necessary for the protection of human, animal or plant life or health. Such provisions protect agricultural products while limiting trade-distorting effects as much as possible.
Additionally, the chapter includes annexes on icewine and organics. The icewine annex requires Chile to ensure that any products labelled as icewine are made exclusively from grapes naturally frozen on the vine. The annex on organic products will help facilitate trade by encouraging continued work on the equivalence of organic certification systems, as well as communication and cooperation related to organic products. It has both binding and non-binding commitments relating to environmental protection. The binding obligations prohibit a party from failing to effectively enforce its environmental laws in a manner affecting trade or investment between the parties, and waiving or otherwise derogating from its environmental laws in order to encourage trade or investment between the parties.
It is the first time an FTA has a chapter dedicated to conditions for livestock. Moreover, there are a number of other interesting new provisions on antimicrobial resistance AMR. For AMR, both parties recognise the importance of tackling the global threat and have agreed to work together on both a multilateral and bilateral level to control it. They commit to phase out the use of some substances such as growth promoters Chapter 6 , and to promote and support international standards and cooperation in multilateral fora. The EU and Mexico maintain their right to establish a level of protection that they consider appropriate and the agreement contains reference to the precautionary principle in decision-making.
As already enshrined in EU treaties, this principle foresees that products can be kept out of the market if there is no scientific certainty of their safety. In addition, the agreement increases mutual transparency and information exchange. Mexico also agreed to treat the EU as a single entity, thus eliminating separate procedure for individual member states. The environment chapter of USMCA includes the most comprehensive set of enforceable environmental obligations of any previous US agreement, including obligations to combat trafficking in wildlife, to strengthen law enforcement networks to stem such trafficking, and to address pressing environmental issues such as air quality and marine litter.
In terms of conservation, the USMCA identifies a range of environmental and conservation topics to be addressed through trilateral cooperation. These include including tackling illegal trade in forest products, combating marine plastic litter and reducing alien invasive species chapter The labour provisions in these agreements refer to international standards of the ILO.
The environmental provisions refer to international agreements and the MEAs they have signed. In regard to already existing domestic law, the TSD chapter in the EU-Korea agreement includes the commitment to keep the level of protection and to effectively enforce the domestic law when it affects trade or investment. These commitments ensure that lowering standards is not used for competitive advantage. The EU-Japan and EU-Mexico TSD chapters include particular references to biodiversity, which is essential for the sustainable production of food and agricultural products.
The EU-Japan agreement uses weaker wording, only recognizing the contribution of trade in ensuring conservation of biodiversity. However, the joint interpretative statement published on 14 th January confirms that the parties commit to cooperate on trade-related environmental issues including climate change and the implementation of the Paris Agreement. DAGs are set up in the EU and in the partner country or countries to provide advice on the implementation of the sustainable development chapters in EU trade agreements. The EU-Japan EPA contains sections on mutual cooperation on trade-related and investment-related aspects of environmental and labour policy.
Article These include cooperation on, inter alia , a multilateral level at international organisations, labelling schemes including eco-labels and ethical trade schemes, and trade-related aspects of the international climate change regime, including promotion of low-carbon technologies.
The New Zealand-Korea FTA includes an indicative list of areas of cooperation on the environment Annex 16A , such as cooperation in international fora, exchange of information on environmental regulations, norms and standards, as well as exchange of opinions of both parties on the relationship between MEAs and international trade rules. Moreover, both sides exchanged a list of environmental priorities with detailed plans of how to fulfil them. A joint environmental committee was created to ensure the progression towards the achievement of these ambitions.
A report on success of environmental goals is to be written every three years and must be made public annex Within Chapter 16, both parties made commitments relating to multilateral agreements, trade favouring the environment, transparency, institutional arrangements, co-operation and consultation. The institutional arrangements article The institutional arrangements clause contains the usual references to contact points. However, article While the China-Switzerland FTA is not impressive on a global comparison level on the issue of sustainability, it nevertheless shows how FTAs can be used by smaller nations to encourage TSD issues with large, increasingly market-based economies, such as China especially considering Norway is at present negotiating an FTA with China.
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A Sino-Swiss committee was established to monitor seven key areas, such as the coordination of technical cooperation activities, the facilitation of technical consultations and the identification of sectors for enhanced cooperation. With regard to the environment, both the CPTPP and the USMCA environment chapters are subject to an enforcement mechanism that includes a three-step consultation process for parties to use in seeking to resolve any disputes that arise.
If parties fail to resolve a dispute through consultations, they may use the procedures in the CPTPP Dispute Settlement Chapter with regard to establishment of a panel article The Agreement aims to promote environmental protection and sustainable development in both countries. It commits the Parties to effectively enforce their environmental laws and to work cooperatively to protect and enhance the environment and promote sustainable development.
It contains remedies that are available to help ensure effective enforcement. Citizens and NGOs can make submissions on enforcement matters asserting that Canada or Chile is failing to effectively enforce its environmental law. These submissions will be considered by an independent Joint Submission Committee and can result in an independent assessment through the preparation of a factual record.
A consultation and dispute settlement process is available to the Parties where a persistent pattern of failure to effectively enforce an environmental law is alleged. This process can lead to the creation of an arbitral panel which can recommend a remedial action plan and, in some cases, impose a monetary enforcement assessment. Article 5 on Government Enforcement Actions is a key article in the Agreement.
The article provides 12 examples of appropriate government action such as; appointing and training inspectors; monitoring compliance and investigating suspected violations; seeking voluntary compliance agreements; promoting environmental audits; encouraging mediation and arbitration; using licenses, permits and authorizations; initiating judicial, quasijudicial and administrative enforcement proceedings; providing for search and seizure; and issuing administrative orders.
The article specifies that Parties shall ensure that judicial, quasijudicial or administrative proceedings are available to sanction or remedy violations of environmental laws and that sanctions and remedies are appropriate and include compliance agreements, fines, imprisonment, injunctions, closure of facilities and the cost of containing or cleaning up pollution. As outlined in the introduction, sustainability provisions can also directly relate to market access conditions.
This can be the case for example when it comes to sanitary and phytosanitary SPS measures that take the form of specific trade or import conditions. The SPS chapters outline market access conditions and the procedures to follow in case the parties disagree on standards and requirements. Reference is made to international and domestic standards, and the agreements include specific provisions on regional conditions, equivalence, audits, certification requirements and import checks.
When it comes to domestic standards, the FTAs ensure that trade, particularly regarding products of the agri-food sector, is fostered and made faster, by setting common sanitary standards, facilitating transit of goods through customs and by reducing costs due to export procedures and certifications. Provisions on the adaptation to regional conditions further foster predictability of trade.
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More specifically, provisions regarding import conditions, risk analysis and certifications are present in the majority of the agreements. The aim is to simplify the procedures, while ensuring the fulfilment of all SPS measures and the exchange of relevant information between the parties. When it comes to imposing certification requirements, this is done only in accordance with international standards and in the least disruptive way possible.