EU to sanction trading partners who flout green and social values


European Union flags fly in front of the European Commission headquarters in Brussels, Belgium, June 17, 2022. REUTERS/Yves Herman/

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BRUSSELS, June 22 (Reuters) – The European Commission proposed on Wednesday to give the European Union the power to impose sanctions on future free trade agreement partners who fail to meet labor and environmental standards.

Many existing EU agreements, such as with Canada and Japan, and those negotiated but not yet in force, such as with Mexico and Chile, already include chapters on sustainability.

However, disputes in this area are settled through dialogue. Sanctions, such as revoking trade concessions through tariffs or quotas, are not an option.

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Civil society groups and many European lawmakers have argued that environmental and labor standards should be a central part of EU trade strategy and that its green push is weak.

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 labor and environmental disputes, some of which are referred to an arbitration committee. 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 speed up free trade deals. read more There is a risk that the incorporation of a sanction system will drag out the process even further.

Sanctions would be triggered for breaches of the Paris Climate Change Agreement or core principles of the International Labor Organization.

These relate to forced or child labor, discrimination in the workplace and freedom of association. The ILO can add a fifth principle on health and safety at work.

The proposal must be approved by the European Parliament and EU governments to enter into force.

Some lawmakers, notably the Greens, believe that sanctions should also be included in existing EU free trade agreements and agreements that have yet to be ratified.

Among the latter is the EU’s deal with the Mercosur bloc of Argentina, Brazil, Paraguay and Uruguay, agreed in 2019 but suspended due to EU concerns over deforestation in the region. ‘Amazon.

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Reporting by Philip Blenkinsop; Editing by Angus MacSwan

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