What happens if a UK government removes benefits from EU citizens in breach of the withdrawal agreement?

 

 

Professor Steve Peers, Law School, Royal Holloway University of London

 

Photo credit: Martin Robson, via Wikimedia Commons

 

Recently the Reform Party proposed that in government it would withdraw benefits from all non-UK citizens, including from those EU citizens who had moved to the UK before the end of 2020. It acknowledged that this would breach the Brexit withdrawal agreement (for an annotated text of the rules on EU and UK citizens’ rights under the agreement, see here, particularly Article 15).

 

Legally the EU response if the UK breached the withdrawal agreement on this issue (I’m assuming the Reform government would amend UK legislation as needed, to ensure that the breach was valid as domestic law) would be to challenge it in the arbitration process which the withdrawal agreement set up. (For an annotated text of the dispute settlement rules, see here). A dispute can be settled politically; if not settled, it goes to arbitration. An arbitration decision is binding, so if a party is found in breach of the withdrawal agreement, it is legally obliged to comply with the ruling.

 

But what if it does not comply with the ruling? The key provision is Article 178, which provides first of all that fines can be imposed upon the party that remains in breach of the treaty despite an arbitration ruling. Article 178 goes on to refer to possible additional retaliation for a continuing breach, but (in paragraph 2(a)) it says that such retaliation cannot concern Part Two of the withdrawal agreement, ie the citizens’ rights provisions. Therefore, the EU cannot respond to the UK breach of EU citizens’ rights by taking UK citizens’ reciprocal rights away. Instead, Article 178 refers to possible retaliation under other agreements (paragraph 2(b)), which brings us to the Trade and Cooperation Agreement (TCA).

 

The TCA has a separate set of dispute settlement rules, which I have annotated here. The key provision on links with the withdrawal agreement is Article 749(4) of the TCA. It states that a continuing breach of the withdrawal agreement can also result in suspension of parts of the TCA, ie tariffs on goods or suspension of other provisions of the agreement (subject again to some limits on the subject-matter of retaliation, ie the retaliation cannot affect social security).

 

The retaliation must be proportionate though, and if the party in breach argues that the amount of that suspension is disproportionate, the arbitration panel can be recalled to rule on the point (Article 178(3) of the withdrawal agreement).

 

One possible form of retaliation which would arguably be proportionate would be to reimpose tariffs equal to the amount of benefits EU citizens would be losing as a result of the breach, to which they would otherwise be entitled under the withdrawal agreement. So if the breach of the agreement caused EU citizens to lose €1 billion in benefits, UK goods exports would face €1 billion in tariffs. Under the World Trade Organisation, in comparable cases, the EU has targeted high profile exports from its trading partner in breach of the rules; for the UK, that might mean higher tariffs in particular on Scottish salmon or whisky, or Jaguar cars. To be clear, this is speculation – the EU might prefer another type of retaliation which is allowed under the agreements. And the EU would be charging its usual tariff rate for countries which it does not have a free trade deal with, which would only mean a big increase for some products.

 

It’s possible it wouldn’t get to this stage: the EU might decide to negotiate changes to the withdrawal agreement; indeed the Reform Party document states that it will ‘renegotiate’ the treaty. But a treaty can only be renegotiated if all parties agree; and it seems very unlikely politically that the EU would agree, given the priority which it placed on the issue before. (On the EU side, an amendment would need to be agreed by a qualified majority of Member States, having been proposed by the Commission, after consent of the European Parliament).

 

As for additional possible sanctions, the EU might, for instance, suspend talks on other issues with the UK. It could even suspend or terminate the entire TCA, although arguably the rule on proportionality of retaliation applies here. In practice, during prior disputes with the UK, the EU has preferred the negotiation and dispute settlement route rather than escalation: both the EU and the UK have previously triggered disputes under the withdrawal agreement and the later Trade and Cooperation Agreement, although only one dispute has got as far as an arbitration decision.

 

For instance, when the EU disputed the UK’s application of (what was then) the Northern Ireland protocol to the withdrawal agreement, it suspended talks on the UK’s participation in EU research programmes and began dispute settlement proceedings, but it put the latter on hold pending negotiations, which eventually resulted in a revised version of the protocol known as the Windsor Framework – after Liz Truss lost her nail-biting contest with a lettuce.

 

As for terminating the whole withdrawal agreement, as discussed further here, there is no termination clause (apart from the trade aspects of the Windsor Framework, subject to certain conditions), and in any event the EU would have no interest in terminating the basis for the Windsor Framework and the protection of its citizens’ rights. Nor does a breach of a treaty automatically terminate it, under international law – which has a whole Latin phrase (pacta sunt servanda) for the importance of upholding treaties. (Though to be fair, international law has a Latin phrase for nearly everything)

 

Anyway, as has been pointed out, EU citizens might choose to apply for UK citizenship before any new UK rules took effect.

 

All of this points to a policy that, on this point at least, seems as ill-thought-through as Mr Farage’s decision not to declare the significant gifts he received shortly before becoming an MP, including those from a convicted money-launderer.

Free trade v freedom of association? The EU/South Korea free trade agreement and the panel report on the EU challenge to South Korean labour law

 

 

Steve Peers, Professor of Law, University of Essex

Has international trade liberalisation, in the form of the World Trade Organisation and free trade agreements between its Members, aided economic growth generally, or rather increased gaps between the rich and poor? Should the pursuit of freer trade take into account concerns about labour standards (and parallel concerns about environmental protection) – and if so, how?

Concerns along these lines have become increasingly prevalent in debates over trade policy, leading in some countries to reluctance to negotiate new free trade deals or demands to renegotiate existing treaties. For its part, the EU has moved towards more assertively applying the provisions relating to trade, labour and the environment in its free trade agreements. 

The EU’s enforcement strategy has recently had its first concrete outcome, in the form of the first panel ruling concerning labour standards under an EU free trade agreement. This concerned freedom of association under the EU/South Korea free trade deal. Note that the EU is recently more active in enforcing other aspects of its bilateral FTAs too: see the recent panel ruling in a dispute brought by the EU against Ukraine (regarding a Ukrainian export ban on wood). Dispute settlement proceedings against South Africa (regarding poultry) and Algeria (regarding import restrictions) are also underway.

This blog post summarises the relevant law in the free trade agreement and its interpretation by the panel, then comments on the ruling in the context of the broader debate about the relationship between trade and labour standards. Finally, I discuss how the ruling might be relevant by analogy to disputes about trade and the environment, to the controversial new EU/China investment agreement and to EU/UK disputes under the new post-Brexit trade deal (see further my summary of that deal and discussion of dispute settlement and human rights, as well as Markus Gehring’s analysis of the environmental rules in the deal).

 

The trade and sustainable development provisions of the free trade agreement

The term ‘level playing field’ is commonly used to refer to these issues (and some other issues) in the recent UK/EU treaty, but the phrase ‘trade and sustainable development’ is used in the EU/S Korea treaty (and more commonly by trade lawyers generally). The EU/S Korea rules are similar to those in a number of other recent FTAs with the EU, and so the panel report may well be relevant by analogy to potential disputes between the EU and (some) other non-EU countries. They are also broadly similar to the recently agreed EU/China investment agreement (not yet in force). However, as discussed further below, the ‘Brexit deal’ provisions go further.

Also, it should be noted that ‘trade and labour’ rules are not unique to agreements with the EU. For instance, free trade agreements with the US contain some provisions on the issue. Indeed, as also discussed below, the panel report distinguishes itself from the ruling in a case between the US and Guatemala.

Chapter 13 of the FTA, the ‘trade and sustainable development’ Chapter, first defines its ‘context and objectives’: the parties ‘reaffirm their commitments to promoting the development of international trade in such a way as to contribute to the objective of sustainable development’ (Article 13.1.1). They ‘recognise that economic development, social development and environmental protection are interdependent and mutually reinforcing components of sustainable development’ (Article 13.1.2). Also, they ‘recognise that it is not their intention in this Chapter to harmonise the labour or environment standards of the Parties, but to strengthen their trade relations and cooperation in ways that promote sustainable development’.

The scope of the Chapter is then defined (Article 13.2.1):

Except as otherwise provided in this Chapter, this Chapter applies to measures adopted or maintained by the Parties affecting trade-related aspects of labour and environmental issues in the context of Articles 13.1.1 and 13.1.2.

Having linked trade with sustainable development, Article 13.2.2 then pushes back:

The Parties stress that environmental and labour standards should not be used for protectionist trade purposes. The Parties note that their comparative advantage should in no way be called into question.

The mixed message continues in Article 13.3, titled ‘right to regulate’, which first refers to ‘the right of each Party to establish its own levels of environmental and labour protection, and to adopt or modify accordingly its relevant laws and policies’, but then qualifies that immediately by stating that ‘each Party shall seek to ensure that those laws and policies provide for and encourage high levels of environmental and labour protection, consistent with the internationally recognised standards or agreements referred to in Articles 13.4 and 13.5, and shall strive to continue to improve those laws and policies.’

What are those international standards exactly? Article 13.4 defines the international labour standards:

1. The Parties recognise the value of international cooperation and agreements on employment and labour affairs as a response of the international community to economic, employment and social challenges and opportunities resulting from globalisation. They commit to consulting and cooperating as appropriate on trade-related labour and employment issues of mutual interest. 

2. The Parties reaffirm the commitment, under the 2006 Ministerial Declaration of the UN Economic and Social Council on Full Employment and Decent Work, to recognising full and productive employment and decent work for all as a key element of sustainable development for all countries and as a priority objective of international cooperation and to promoting the development of international trade in a way that is conducive to full and productive employment and decent work for all, including men, women and young people.

3. The Parties, in accordance with the obligations deriving from membership of the ILO and the ILO Declaration on Fundamental Principles and Rights at Work and its Follow-up, adopted by the International Labour Conference at its 86th Session in 1998, commit to respecting, promoting and realising, in their laws and practices, the principles concerning the fundamental rights, namely:

(a) freedom of association and the effective recognition of the right to collective bargaining;

(b) the elimination of all forms of forced or compulsory labour;

(c) the effective abolition of child labour; and

(d) the elimination of discrimination in respect of employment and occupation.

The Parties reaffirm the commitment to effectively implementing the ILO Conventions that Korea and the Member States of the European Union have ratified respectively. The Parties will make continued and sustained efforts towards ratifying the fundamental ILO Conventions as well as the other Conventions that are classified as ‘up-to-date’ by the ILO.

Article 13.5 then defines international environmental standards. I’ve discussed the application of this ruling to them by analogy separately below.

Article 13.6 is a general statement about the links between trade and sustainable development. Article 13.7 then sets out a rule about ‘upholding levels of protection’, ie reducing standards or failing to enforce domestic labour law.

Skipping over a number of general provisions, the Chapter ends with rules on dispute settlement. Article 13.14 first calls for consultation between the parties on a ‘matter…arising under’ the Chapter. If these do not lead to a settlement within 90 days, a party can call for a panel of experts to be set up (Article 13.15). The panel is to make recommendations, and the parties ‘shall make their best efforts to accommodate advice or recommendations of the Panel of Experts on the implementation of this Chapter.’ This replaces the main dispute settlement system of the FTA, which is switched off for any ‘matter arising under’ this chapter (Article 13.16).

The panel report

The EU’s argument was based on two separate parts of Article 13.4.3 of the FTA, which was set out in full above. First, South Korea’s domestic labour law had not fully complied with ILO obligations as regards freedom of association. Second, South Korea had not made sufficient efforts towards ratifying core ILO treaties. 

Rules of interpretation

The report starts out by asserting that the level playing field provisions must be interpreted in accordance with the normal rules of interpretation of international law, in Articles 31 and 32 of the Vienna Convention of the Law of Treaties (VCLT). This followed from the obligation in the FTA for dispute settlement arbitrators to apply those rules; and the panel of experts was acting in lieu of arbitration.

Jurisdiction

Next, the panel turned to its jurisdiction to hear the case. Jurisdiction can be a dry technical issue, but here the dispute went to the core of the trade/labour nexus.  South Korea argued that the dispute was not ‘a matter arising under’ the Chapter, so could not be subject to dispute settlement at all, because Article 13.2.1 limited the Chapter to measures by a party ‘affecting trade-related aspects of labour and environmental issues’ (emphasis added). There was no direct impact on trade here, therefore no matter could arise under the Chapter.

If this argument had been accepted, it would have ended not only this particular dispute but also (if the ruling had been taken as a precedent) potentially many other disputes under this and other EU FTAs (as well as the EU/China investment treaty).  However, the panel did not accept it. It pointed instead to the words at the start of Article 13.2.1: ‘Except as otherwise provided in this Chapter…’, which indicated that there were exceptions to the rule that the Chapter only related to trade-related aspects. Article 13.4.3 was one of those exceptions. This was confirmed by the broad references to ILO obligations, the ‘fundamental rights’ aspects of those obligations, the reference to the abolition of ‘all’ compulsory labour, and the impossibility of ratifying ILO Conventions only as regards a limited category of workers. It was further confirmed by a contrario comparison with Article 13.4.1 and 13.4.2, which refer to trade (as to Articles 13.7 to 13.9), and by interpreting the scope of the Chapter in light of the broad context and objectives set out in Article 13.1 and the preamble to the FTA.

South Korea also argued that the EU aimed to harmonise the labour law of the parties, in breach of Article 13.2.2. The panel did not accept this either. Harmonisation meant ‘alignment of actual standards such as minimum rates of pay, maximum hours of work, or access to job security procedures’ as distinct from ‘fundamental principles and rights and core labour standards’, which ‘do not require harmonisation of domestic labour laws or outcomes’. The proof of this was that ‘many of the member States which have ratified the relevant Conventions both comply with their international obligations and maintain disparate systems of industrial relations, with very different substantive outcomes in terms of levels of economic development’. The panel also noted that the domestic right to regulate in Article 13.3 was subject to the obligation to uphold core standards.

Likewise, the panel rejected the argument that the EU aimed at protectionism, referring to ILO research that asserts no link between competitiveness and raising labour standards. With respect, a better argument here might be that the EU was not arguing for a protectionist measure (ie trade retaliation), if only because of the limits on remedies set out in the FTA itself. If there is no link between lower labour standards and trade, why does this Chapter often make that link in the first place? The panel’s interpretation is a hostage to fortune because it might make it harder for the EU to bring a claim in a different case relating to reduction or non-enforcement of labour standards, where it would have to show an effect on trade or investment to win the case.

On that point, next, the panel rejected any comparison with the ruling in the US/Guatemala dispute, because the rule in the FTA in question was a requirement that a party ‘shall not fail to effectively enforce its labour laws, through a sustained or recurring course of action or inaction, in a manner affecting trade between the Parties…’. While this was nearly identical to Article 13.7.1 of the EU/S Korea FTA (‘(a) Party shall not fail to effectively enforce its environmental and labour laws, through a sustained or recurring course of action or inaction, in a manner affecting trade or investment between the Parties’ – though note the extension to include environmental law, and an effect on investment), the EU was not alleging a breach of Article 13.7, ie a failure to enforce South Korea’s labour law. It was  instead alleging a breach of the separate obligation for that domestic labour law to meet minimum standards. More broadly, the context of the two treaties is different: the US/Central America/Dominican Republic treaty ‘does not have the same contextual setting of sustainable development as the EU-Korea FTA, nor does it refer to the range of multilateral and international agreements and declarations which the Parties have included in the EU-Korea FTA’.

Substance: domestic labour law

The panel then turned to the EU’s arguments about South Korean labour law, which were fourfold: a narrow definition of ‘workers’ who can join trade unions (excluding self-employed or dismissed or unemployed workers); the definition of ‘trade union’ as excluding bodies who admit persons excluded from the category of ‘worker’ as members; the requirement that only members can be trade union officials; and the discretionary registration of trade unions.

It started with looking at the different elements of Article 13.4.3. As regards the requirement to act ‘in accordance with the obligations deriving from membership of the ILO’, the panel found that it included the obligation to ensure freedom of association, even where (like South Korea) a country had not signed up to specific treaties on that issue. Moreover, the rulings of the ILO’s Committee on Freedom of Association could be taken into account.

As for ‘the ILO Declaration on Fundamental Principles and Rights at Work and its Follow-up’, the panel decided that the EU was not claiming that it was legally binding as such. What was legally binding between the parties was Article 13.4.3, taken as a whole.

Next, the panel considered the legal strength of the term ‘commit to’. Here the panel rejected South Korea’s argument that this wording was purely aspirational, ruling instead that ‘this represents a legally binding obligation of commitment to respecting, promoting and realising the obligations arising from membership of the ILO and the 1998 ILO Declaration in relation to the principles concerning the fundamental rights’.

It then turned to those specific terms. ‘Respecting’ meant a ‘negative obligation not to injure, harm, insult, interfere with or interrupt freedom of association’. ‘Promoting’ meant a ‘positive obligation on States, which in human rights statements on the content of the freedom of association means that States should ensure third parties do not disrupt workers engaging in their right to freedom of association’. Also, ‘States should create a ‘climate’ in which the civil rights of workers and employers allow them to freely exercise their rights to freedom of association’. As for ‘realising’, this meant ‘a binding requirement involving a commitment to realising the principles concerning the fundamental right of freedom of association’ as distinct from ‘a binding requirement that a Party comply with the terms of Conventions’ as such – which was the subject of a separate complaint, considered below.

Finally, ‘the principles concerning the fundamental rights’ did not mean that there was no legally binding obligation, and the panel was unconvinced by the South Korean argument that these principles were not sufficiently clear.  It did, however, hint that the freedom of association principles were clearer than the others referred to (forced labour, child labour and discrimination), raising the prospect that a case concerning those principles might face an extra hurdle to be successful.

Applying these principles to the EU’s specific complaints, first of all South Korea had wrongly excluded self-employed or dismissed or unemployed workers from joining trade unions. On the first point it noted that this issue arose under some EU Member States’ law too – noting that this might be an issue for discussion between the parties going forward. On dismissed workers, it noted in particular that there were insufficient safeguards against being dismissed for trade union-related activity.

Next, the panel concluded that South Korea had wrongly defined ‘trade unions’ as excluding bodies who admit persons excluded from the category of ‘worker’ as members, noting in particular that some trade unions had been deregistered because their members had been dismissed. Needless to say, this gives employers considerable power over not only individual employees but also entire trade unions by threatening dismissal of a union member. It also ruled against the national law requirement that only union members can be trade union officials, on the basis that ti was up to union members to choose who to represent them.

On the other hand, the panel ruled against the EU complaint regarding the discretionary registration of trade unions, holding that the evidence was contradictory and it was not sufficiently certain that the complaint was well-founded.

Substance: ratification of ILO Conventions

As a reminder, treaty provides that South Korea ‘will make continued and sustained efforts towards ratifying the fundamental ILO Conventions as well as the other Conventions that are classified as “up-to-date” by the ILO’. The EU argument related only to the ‘fundamental’ Conventions.

The panel started out by noting that of the eight ‘fundamental’ ILO Conventions, South Korea had yet to ratify four: two on forced labour and two on trade unions. The first issue here was the legal strength of the word ‘will’: the panel rejected South Korea’s argument that it was not really binding, holding that it ‘establishes a binding legal obligation’.

But a legal obligation to do what exactly? Here the panel rejected both South Korea’s argument that the status quo was sufficient, and the EU’s argument that progress towards ratification must continue ‘without interruption’. There was no concrete requirement or target date, and the parties had ‘leeway’ in achieving the objectives. This was an obligation of effort, not result.

Was there sufficient effort then? The panel ruled that it was sufficient that the South Korean government had tabled bills before Parliament in 2019 to ratify three of the treaties concerned. As for the other treaty, concerning prison labour, the panel accepted South Korea’s argument that changes to penal law take time. (One might note that they take very little time when a State responds to a terrorist bomb or other outrage). Overall, while expressing mild disappointment, the panel did not think that South Korea had breached its obligation to make effort towards ratifying the Conventions.

What happens when and if these treaties are ratified? That’s a hypothetical issue, and the panel was not called upon to address it. But it should be recalled that Article 13.4.3 also provides for a ‘commitment to effectively implementing the ILO Conventions that Korea and the Member States of the European Union have ratified respectively’. This would apply already, of course, to ILO Conventions which both sides have ratified. Logically much of the panel’s analysis would apply by analogy to this provision: it falls within its jurisdiction; there is no requirement to show a link to trade or investment; and the word ‘commitment’ entails a legally binding obligation. But here the wording is stronger than the obligation to make ‘efforts towards ratifying’ treaties: ‘effectively implementing’ them arguably suggests rather an obligation of result, going beyond halting and partial ‘efforts’ to do so.   

 

Comments

The EU has won some significant victories here, as regards: jurisdiction; the legal effect of some vague quasi-soft law terms; the absence of a requirement for a trade or investment impact; the references to some ILO Conventions; and the use of ILO ‘soft law’. All of this sends a signal to other non-EU countries, should the EU seek to invoke the relevant provisions (where they exist) in other FTAs or the EU/China investment treaty. Of course, the obligations also apply to the EU – as the panel points out at several places – although labour unions and environmental groups would likely be happy to see the EU held to account as well.

The EU has been successful also on some key points of criticism of domestic labour law. The panel’s close attention to the effect of labour law rules in practice – ie as a means to decertify trade unions simply by firing a member – is significant. On the point where the EU failed to table enough evidence to convince the panel, that is a pointer for how such disputes might be litigated in future.

The EU will likely be disappointed by the panel’s approach to ILO Conventions, where it held that they created a legal obligation but applied a relatively low threshold to assessing South Korea’s compliance with the obligation to move towards ratifying them. As noted above, some aspects of its reasoning (as regards the prison labour Convention, and the ‘disguised protectionism’ point) are particularly unconvincing, with great respect. This sends a converse message to non-EU countries: that a delay of nearly a decade in ratifying such Conventions, including extra tardiness in ratifying one important Convention, is acceptable. However, it should be noted that as discussed above, the obligations to implement ILO Conventions after ratification, while not discussed by this panel report, are arguably stronger.

Of course, the EU’s partial success in its action is inevitably limited by the lack of any further remedies to enforce the panel ruling. It might be possible that the process has some effect on domestic political opinion in the other party, perhaps helping to persuade the government to move faster on the relevant issues. However, considerations like these are only relevant where there is a form of democracy in the other party – so they are hardly relevant in the context of the EU/China investment agreement.  

The context of the panel ruling includes the gradual development of the EU’s own trade policy. A revision of internal EU law on trade remedies (which does not apply to investment treaties) is about to be formally adopted, and will be accompanied by a statement from the Commission, including the following commitment to enforcement of sustainable development provisions in the EU’s FTAs:

In deploying the enhanced enforcement system [regarding alleged breaches of trade agreements], the Commission will pay equal attention to alleged breaches of the trade and sustainable development provisions of EU trade agreements as to alleged breaches of market access systems. The processing of alleged breaches of trade and sustainable provisions will be fully integrated into the system. The Commission will prioritise those cases which are particularly serious in terms of their effect on workers or the environment in a trade context, which have systemic importance and which are legally sound.  

In the same context, the panel ruling is comparable to the 2017 CJEU judgment on the EU’s legal competence to agree the EU/Singapore free trade agreement, which decided (at paras 139 to 167) that the ‘sustainable development’ provisions fell within the scope of the EU’s common commercial (ie trade) policy. Having said that, it is striking that the CJEU took a different view from the panel as to whether lower labour standards might have an effect on trade, ruling that the sustainable development provisions:

are such as to have direct and immediate effects on trade between the European Union and the Republic of Singapore since they reduce the risk of major disparities between the costs of producing goods and supplying services in the European Union, on the one hand, and Singapore, on the other, and thus contribute to the participation of EU entrepreneurs and entrepreneurs of the Republic of Singapore in free trade on an equal footing (para 159).

There’s a context beyond the EU as well: while the new US President will not be tweeting angrily in the middle of the night about trade issues, the Biden administration is nevertheless lukewarm about further trade liberalisation. Whether this means ruling out trade deals entirely, or insisting on more account being taken of labour and environmental standards in such deals, remains to be seen.  

More broadly, concern in wealthier countries about opening up (or retaining) free trade without more enforceable labour and environmental standards may have reached a tipping point. One might draw comparisons with the EU’s own moves to adopt more labour and environmental law in the context of completing the internal market. Free trade’s hardcore advocates have long resisted making a strong link between trade and labour or environmental standards. They may now face a choice not necessarily between socialism or barbarism, but at least between legalism or nativism.

 

Application to environmental law

As noted above, some parts of the panel ruling are relevant to environmental disputes by analogy – in particular to the equivalent provisions on multilateral environmental treaties in Article 13.5:

2. The Parties reaffirm their commitments to the effective implementation in their laws and practices of the multilateral environmental agreements to which they are party.

3. The Parties reaffirm their commitment to reaching the ultimate objective of the United Nations Framework Convention on Climate Change and its Kyoto Protocol. They commit to cooperating on the development of the future international climate change framework in accordance with the Bali Action Plan.

First of all, interpretation in accordance with the VCLT is equally relevant to environmental issues. The panel’s analysis of jurisdiction applies also to environmental disputes by analogy:  Articles 13.5.2 and 13.5.3 are equally exceptions to the rule that the Chapter only covers trade-related aspects of the environment, given that there is no reference to trade only here.

As with the labour provisions, one can interpret the scope of those rules a contrario by comparison with Article 13.5.1 (which does mention trade) and Articles 13.7 to 13.9, and in light of the broad context of Article 13.1 and the preamble. The indivisibility of ILO Conventions applies equally to environmental treaties. The limited scope of the ban on harmonisation of law, the distinction between the right to regulate and the obligation to uphold core standards, and the absence of a requirement to show an effect on trade applies equally to the clause on multilateral environmental treaties.

By analogy with the panel ruling, the words ‘commit’ and ‘commitment’ as regards environmental treaties – appearing three times here – denote a legally binding obligation. A commitment to cooperation is arguably too vague to define in concrete terms; but on the other hand, a ‘commitment to reaching the ultimate objective’ of a treaty is a stronger obligation than ‘continued and sustained efforts towards ratifying’ the ILO Conventions at issue in part of the labour dispute.

The strongest obligation here may be the obligation ‘to the effective implementation in their laws and practices of the multilateral environmental agreements to which they are party’. This closely parallels the commitment in the labour provisions ‘to effectively implementing the ILO Conventions that Korea and the Member States of the European Union have ratified respectively’ – discussed further above.

Just as the panel report may be relevant by analogy to the labour provisions in other EU FTAs and the EU/China investment treaty, this extension of its reasoning could be relevant to the environmental provisions of those FTAs and the EU/China treaty too.

Application to the EU/China investment treaty

Comparing the EU/S Korea FTA with the EU/China investment treaty, the latter (understandably) refers only to investment aspects throughout, rather than trade also. However, it does not limit its scope in the same way as the EU/S Korea treaty, so South Korea’s jurisdictional objections (which were unsuccessful anyway) would not be applicable. The two treaties have a similar clause on their context, and comparable provisions on environmental treaties.

As regards labour standards, the non-regression and non-enforcement clauses are similar to the EU/S Korea treaty. The provision on ILO standards and domestic law, and ratification of ILO Conventions, provides:

1. Each Party, in accordance with its obligations assumed as a member of the International Labor Organization (“ILO”), and its commitments under the ILO Declaration on Fundamental Principles and Rights at Work and its Follow-up, shall respect, promote and realize, in good faith and in accordance with the ILO Constitution, the principles concerning the fundamental rights which are the subject of the fundamental ILO Conventions.

2. Each Party is, in accordance with the commitments of the members of the ILO and the 2019 ILO Centenary Declaration for the Future of Work, committed to effectively implement the ILO Conventions it has ratified and work towards the ratification of the ILO fundamental Conventions. In particular, in this regard, each Party shall make continued and sustained efforts on its own initiative to pursue ratification of the fundamental ILO Conventions No 29 and 105, if it has not yet ratified them. The Parties will also consider the ratification of the other Conventions that are classified as "up to date" by the ILO.

It is notable that this wording leaves out the list of fundamental rights in question, thereby omitting to mention forced labour explicitly. However, it is nevertheless covered by the general reference to ILO principles, in light of the panel interpretation.

The wording is basically similar to the clause in the EU/S Korea treaty which the panel interpreted, and so should logically be interpreted the same way, particularly in light of the use of the stronger word ‘shall’ at two points. Remember that the panel interpreted the word ‘committed’ (here referring to effective application of ILO Conventions once ratified) as legally binding.

As with the EU/S Korea FTA, the weak message on ratification of ILO Conventions (in this case, two forced labour Conventions) is arguably compensated for by the stronger wording on the domestic implementation of ILO principles. But this is subject to the important caveat above – that the recent panel ruling suggests that freedom of association principles might be easier to identify than the other ILO principles being referred to. The particular risk here is that the crucial issue of forced labour could not be effectively addressed. Whether this is sufficient will likely be subject to much debate in the near future. 

Finally, the dispute settlement system is essentially the same as for the EU/S Korea FTA, although the parties merely ‘discuss measures’ following any panel ruling.

Application to the EU/UK treaty

Comparing the EU/S Korea FTA with the EU/UK deal (chapter 8 of the ‘level playing field’ rules), the list of international measures includes some later measures in the latter treaty, but the references to integrating sustainable development into the EU/UK relationship are shorter. Conversely, the EU/UK treaty makes more references to transparency. The wording relating to ILO Conventions is only slightly different, bringing together the rules on promoting and effectively implementing such Conventions: ‘each Party commits to respecting, promoting and effectively implementing the internationally recognised core labour standards, as defined in the fundamental ILO Conventions’.

But there are additional commitments to: implementing the parts of the Council of Europe Social Charter that each party has signed up to; promoting the ILO Decent Work Agenda; protecting the social dialogue; and cooperating in multilateral fora on ‘trade-related’ labour issues.  There is a much longer list of environmental obligations as compared to the EU/S Korea FTA.  

Crucially, there is no general clause limiting the scope to ‘trade-related’ matters; such wording appears only in a handful of provisions of chapter 8. There is no rule against harmonisation or protectionism either.  So the various jurisdictional objections raised by South Korea could not so easily be made; and in any event, this panel report’s rejection of such arguments might well serve as a precedent. The panel’s findings that terms like ‘will’ and ‘commitment’ contain are legally stronger than one might think could also be relevant by analogy.

However, one similarity between the UK/EU and UK/S Korea treaties is crucial: the relevant provisions are both subject to a relatively limited form of dispute settlement, consisting of consultation followed by expert panels. No trade remedies can result, even if the panel finds a breach of the treaty. On the weak legal effect of a panel report, the EU/UK treaty is even blunter than the ‘best efforts’ clause in the EU/Korea treaty: ‘the Parties share the understanding that if the Panel makes recommendations in its report, the responding Party does not need to follow these recommendations in ensuring conformity with the Agreement.’

Conversely, though, the references to upholding domestic legal standards – ie the cases similar to US/Guatemala, not EU/S Korea – are removed from the ‘fluffy’ sustainable development chapter, being placed instead in separate chapters in the UK/EU treaty, where trade retaliation can apply.  It is worth comparing the substantive test in full. First of all, the EU/UK treaty provides:

A Party shall not weaken or reduce, in a manner affecting trade or investment between the Parties, its labour and social levels of protection below the levels in place at the end of the transition period, including by failing to effectively enforce its law and standards.

(There’s an identical provision for environmental law). The EU/S Korea treaty provides:

1. A Party shall not fail to effectively enforce its environmental and labour laws, through a sustained or recurring course of action or inaction, in a manner affecting trade or investment between the Parties.

2. A Party shall not weaken or reduce the environmental or labour protections afforded in its laws to encourage trade or investment, by waiving or otherwise derogating from, or offering to waive or otherwise derogate from, its laws, regulations or standards, in a manner affecting trade or investment between the Parties.

Note that there are two rules in the EU/S Korea treaty – non-enforcement and non-regression – which are in effect merged in the EU/UK treaty. In the EU/S Korea treaty, non-enforcement is subject to two different thresholds: not only ‘in a manner affecting trade or investment’ but also ‘sustained or recurring course of action or inaction’. As for non-regression, it is also subject to the ‘manner affecting trade or investment’ test, but also a requirement that the reduction in standards must take the form of a waiver of a derogation of its laws ‘to encourage trade or investment’.

By comparison, while the EU/UK treaty also contains a threshold of ‘in a manner affecting trade or investment between the Parties’, it does not contain the requirement that any non-enforcement must take the form of a ‘sustained or recurring course of action or inaction’. Nor does it require that a reduction in standards take the form of a waiver of a derogation of its laws ‘to encourage trade or investment’. Any reduction of standards will do, not just a waiver or derogation of them, although unlike under the EU/S Korea treaty, the time period to judge the reduction of standards is fixed at a particular date: the end of the transition period. On the face of it, there is no scope for a dynamic interpretation, ie a reduction of standards in 2025 from a higher level which was legislated in 2022 would not fall within the scope of the EU/UK clause, unless that drop in standards went so far as to drop also below the level at the end of 2020.

However, a development like that might fall within the scope of the ‘rebalancing’ clause in the EU/UK treaty, which concerns future developments, and is also subject to potential trade retaliation.  Here there is a different threshold: the rule applies where ‘material impacts on trade or investment between the Parties are arising as a result of significant divergences between the Parties’ as regards labour, environment or subsidy laws.

Finally, just for fun: it’s a moot point now, but can we make any analogies between the EU/S Korea panel’s interpretation of the obligation to move toward ratification of the ILO treaties and the provision in the withdrawal agreement about negotiating a future relationship treaty? Here’s that text:

The Union and the United Kingdom shall use their best endeavours, in good faith and in full respect of their respective legal orders, to take the necessary steps to negotiate expeditiously the agreements governing their future relationship referred to in the Political Declaration of 17 October 2019 and to conduct the relevant procedures for the ratification or conclusion of those agreements, with a view to ensuring that those agreements apply, to the extent possible, as from the end of the transition period.

The wording is far from identical. But in general, remember that the panel report found an obligation of effort, not result, which was moreover not very strict. So the panel report is far from helpful to those who claimed that the EU was in breach of the clause for being ‘mean’ to the UK by not agreeing with the UK’s negotiation position. (Nor would it help anyone making an argument the other way around).  And suffice it to say that while the panel made extensive reference to primary and secondary literature, it did not find that any legal obligations derived from power point slides or tweets from EU officials.

Barnard & Peers: chapter 9; chapter 24; chapter 27; chapter 20; chapter 22

Analysis 5 of the Brexit Deal: Environment and Climate Provisions

 

 

Markus W. Gehring, University of Cambridge; J.S.D. (Yale), LL.M. (Yale), Dr jur. (Hamburg), MA (Cantab). This short piece shares thoughts with the Marios Tokas and Markus W. Gehring, Briefing 4: The UK’s Draft Position - Exploring the basis for negotiation with the EU, CISDL Legal Brief 2020

 

Introduction

 

With the beginning of the new year, the relationship between the UK and the EU was fundamentally reset as the Brexit transition period ended and the new EU-UK Trade and Cooperation Agreement (TCA) came provisionally into force. This blog post looks at the provisions of the TCA on environment and climate change, following on from four earlier analyses on this blog, on: an overview of the TCA; the social security provisions; human rights; and dispute settlement. (Updated April 28 2021 to refer also to the final Article numbering of the TCA).

 

This new agreement is not just the first ‘less free trade’ agreement, but also contains a number of important innovations that are not normally found in free trade agreements (FTAs). This paper offers an initial, tentative review of the TCA and compares it with the UK and EU draft agreement texts on matters relating to the environment, particularly climate change.

 

It is worth noting that the TCA leaves the (limited) climate cooperation in the Withdrawal Agreement untouched. The Withdrawal Agreement recognised the need for close climate cooperation, particularly in the Ireland/Northern Ireland Protocol (Backstop) and includes a carbon price as an important element. However, it does not mandate the full participation of Northern Ireland in the EU Emissions Trading System outside the energy sector.

 

Despite the Political Declaration mandating no more than a discussion about climate cooperation, “both Parties could choose to safeguard strong climate legislation within a side agreement or a chapter of a new UK-EU trade deal.” As we indicated in 2019, much inspiration could be drawn from existing FTAs through ‘[a] combination of the most robust provisions – that ensure full compliance with the Paris Agreement and the highest level of ambition”, which could have the “potential to blaze a trail for deep climate cooperation in future free trade agreements, potentially for all Paris Agreement Parties around the world.” (Markus Gehring and Freedom-Kai Phillips, ‘Legal Options for Post-Brexit Climate Change and Energy Provisions in a Future UK-EU Trade Agreement’ (European Climate Foundation Paper, 2019)) The resulting set of TCA provisions is innovative in that it constitutes the “first trade agreement to make the climate crisis a ‘make-or-break issue” (See my comments to The Independent)

 

Preambles

 

Environmental protection and climate change feature prominently in the TCA Preamble. While the text of the preamble is similar to that of other EU FTAs, the TCA is the first EU FTA to immediately elevate climate change as an essential element of the agreement:

 

“REAFFIRMING their commitment to democratic principles, to the rule of law, to human rights, to countering proliferation of weapons of mass destruction and to the fight against climate change, which constitute essential elements of this and supplementing agreements”

 

Due to its prominence in the preambular text, reneging on climate commitments by either party could lead to a material breach of the treaty and a subsequent suspension or termination. Notably, the three dimensions of sustainable development, namely the economic, social, and environmental dimensions, as underlined in the preamble are resonant of both the EU treaties and previous FTAs. The second relevant preambular paragraph is a new addition and uses language agreed to in the Withdrawal Agreement Political Declaration, underlining high levels of environmental protection and climate change ambition as priorities, while ensuring a level playing field for “open and fair competition and sustainable development”. Preambular language has proven to be a significant element of trade agreements, particularly in light of the WTO DSB in the US-Shrimp dispute, where preambular language was used to add colour and shading to their interpretation of Art. XX GATT.

 

Material Breach

 

Article 764 (previously COMPROV.5) declares the fight against climate change as a one of the bases for cooperation alongside democracy, the rule of law, human rights and the non-proliferation of WMDs. Further, Article 771 (previously COMPROV.12) affirms that Article 764(1) (previously COMPROV.5(1)) is an essential element of the partnership established by the TCA as well as “any supplementing agreement.”

 

In the May 2020 EU Draft, the collective goal of combating climate change was elevated to a guiding principle, informing the operation of the entire treaty and was consequently placed at its beginning. This strongly worded provision, with mandatory language, was left almost unchanged in the TCA; the only slight change incorporated the gender-neutral language of “human-caused” climate change, as opposed to “man-made climate change” found in the EU draft, with no difference to its material meaning.

 

The language is one of the strongest found in any trade agreement, declaring that “climate change represents an existential threat to humanity”, requiring each Party to “respect the Paris Agreement and the process set up by the UNFCCC and refrain from acts or omissions that would materially defeat the object and purpose of the Paris Agreement.” Both trading partners also commit to be advocates of the fight against climate change in international fora.

 

Essential elements are important when determining suspension or termination of a treaty in international law. The TCA contains also Article 772 (previously INST.35) on the fulfilment of obligations described as “essential elements”: a provision that displaces in part the customary principles contained in the Vienna Convention on the Law of Treaties. It allows either party to suspend or terminate the TCA or any subsequent agreement in whole or in part after a specific process which mandates consultations and qualifies the invocation of a breach of an essential element. The provision singles out the Paris Agreement and helpfully clarifies that “an act or omission which materially defeats the object and purpose of the Paris Agreement shall always be considered as a serious and substantial failure for the purposes of this Article” meaning that it makes it somewhat easier to invoke the provisions when the object and purpose of the Paris Agreement is breached.  The TCA has thus become the first instance in which climate change is an essential element of a trade treaty. While the issue might be seen as essential for association agreements leading to EU Membership, this could potentially be the first agreement, provisionally in force, to contain climate change as an essential element, that is, a make-or-break issue.

 

Level playing field

 

Under ‘Title XI: Level Playing Field for Open and Fair Competition and Sustainable Development’, environment, climate change, and sustainable development more broadly, play a key role. The title is a slight misnomer as the obligations in these fields consist of non-regression obligations rather than any form of dynamic alignment, or indeed level playing field. The TCA, however, contains a quasi-unilateral set of measures that the Parties could adopt if divergence in these fields becomes too great in terms of ‘rebalancing measures’, subject to dispute settlement provisions.

 

Three different chapters of the level playing field title are relevant: the non-regression rules (chapter 7), the rebalancing rules (chapter 9), and the sustainability rules (chapter 8).

 

Environment and climate (Chapter 7)

 

This chapter groups some of the provisions on climate change and emission trading that the EU had proposed, subject to consultation, a panel of experts and, more importantly, a Panel of experts for non-regression areas.

 

It delineates the areas of law that determine the “environmental levels of protection”, to include laws in the majority of the most significant areas of current EU legislation such as industrial emissions, air quality, nature and biodiversity conservation, waste management, marine and aquatic environment, chemicals, agricultural environmental impacts. Non-EU laws are only included if they are ‘common’ to the Member States meaning that not the highest level found in any of the Member States will be used but rather the UK would have to prove that a Member State law is common which might be very difficult to prove in the expert or arbitration process.  

 

There is a separate definition of the “climate level of protection”, somewhat controversially defined in part as the reduction and removal of greenhouse gases emissions: “for the Union, the 40 % economy-wide 2030 target, including the Union’s system of carbon pricing [and] for the United Kingdom, the UK’s economy-wide share of this 2030 target, including the United Kingdom’s system of carbon pricing.” In law, that means a 37% reduction by 2030 based on 2005 levels for the UK.

 

Neither of these definitions reflects the new ambitions agreed within the EU of 55% reduction, nor do they align with the announced 68% reduction from 1990 levels for the UK. Evidently, this leaves some room for discretion for both trading partners with regard to their 2030 targets. Unfortunately, the 2050 objective is currently described in Art. 355(3) (previously 1.1.3) of Title XXI (Level Playing Field) as just an ambition: “Each Party reaffirms its ambition of achieving economy-wide climate neutrality by 2050”. The climate change definition also includes “the phase-out of ozone depleting substances”.

 

Article 391(2) (previously 7.2.2) contains one of the strictest formulations of a non-regression provision by adopting mandatory language prohibiting the weakening or reduction of levels of environmental or climate protection as defined in Art. 390(1) (previously 7.1) “below the levels that are in place at the end of the transition period”, including “by failing to effectively enforce its environmental law or climate level of protection”, with the sole caveat that this regression shall not occur “in a manner affecting trade or investment.”

 

In my view this is a strong provision, despite the nominal caveat, as WTO panels have repeatedly interpreted “affecting trade” in the GATT and GATS as having an economic impact without any qualitative level beyond de minimis, for example in cases like China – Publications and Audiovisual Products:

 

“The word 'affecting' covers not only measures which directly regulate or govern the sale of domestic and imported like products, but also measures which create incentives or disincentives with respect to the sale, offering for sale, purchase, and use of an imported product 'affect' those activities.” Panel Report, China – Publications and Audiovisual Products, para. 7.1450.

 

 

or EC – Bananas III:

 

“[t]he ordinary meaning of the word 'affecting' implies a measure that has 'an effect on', which indicates a broad scope of application. This interpretation is further reinforced by the conclusions of previous panels that the term "affecting" in the context of Article III of the GATT is wider in scope than such terms as 'regulating' or 'governing'.217 (emphasis added, footnote omitted).” Appellate Body report, EC — Bananas III, para. 220.

 

Art. 392 (previously 7.3) obligates both parties to “have in place an effective system of carbon pricing” and suggests that they give serious thought on linking their respective carbon pricing systems to preserve the system’s integrity and possibly increase its effectiveness. It is worth highlighting that both sides are now committed to a carbon price for “from electricity generation, heat generation, industry and aviation.” This commitment could support the ICAO CORSIA implementation or indeed domestic carbon pricing of aviation between both parties. It does not include shipping but then the EU discussions on expansion of the ETS to shipping are still ongoing but could start in 2023.

 

In keeping with the aim of not wanting to be bound by EU law, the parties agreed to be bound instead by “the internationally recognised environmental principles” (Article 393): principles to which they are committed through various multilateral environmental agreements: Particularly, “(a) the principle that environmental protection should be integrated into the making of policies, including through impact assessments; (b) the principle of preventative action to avert environmental damage; (c) the precautionary approach referred to in Article 356(2) (previously 1.2(2) [Right to regulate, precautionary approach and scientific and technical information]); (d) the principle that environmental damage should as a priority be rectified at source; and (e) the polluter pays principle.” The final provision could be interpreted as a stronger formulation of the TFEU’s “polluter pays” formulation, which simply states that the “polluter should pay”. 

 

Non-regression obligations include enforcement of environmental laws, including the obligation of each Party to ensure that “domestic authorities competent to enforce the relevant law with regard to environment and climate give due consideration to alleged violations of such law that come to their attention” and that “those authorities shall have adequate and effective remedies available to them, including injunctive relief as well as proportionate and dissuasive sanctions, if appropriate; and national administrative or judicial proceedings are available to natural and legal persons with a sufficient interest to bring actions against violations of such law and to seek effective remedies including injunctive relief, and that the proceedings are not prohibitively costly and are conducted in a fair, equitable and transparent way.” (Article 394, previously 7.5) These commitments are similar to the boarder Aarhus Convention access to justice obligations but include injunctive relief, costs and include the administrative not just the judicial process. The previous proposals about the independence of the Office for the Environment in the EU draft text was also dropped.

 

The enforcement of level playing field provisions follows a special panel process. The special rule on dispute settlement (Article 396, previously 7.7) highlights that in place of the general dispute settlement rules, Articles 408-410 (previously 9.1 to 9.3) of the level playing field provisions apply, which still includes the possibility of trade retaliation if the non-regression rule is breached.

 

Rebalancing

 

What makes these provisions particularly significant is the inclusion of the level playing field provisions, now called “Article 411 (previously 9.4): Rebalancing”. While both parties recognise that each Party has the right to determine its own “future policies and priorities with respect to labour and social, environmental or climate protection, or with respect to subsidy control, in a manner consistent with each Party’s international commitments, including those under this Agreement,” they also acknowledge that “significant divergences in these areas can be capable of impacting trade or investment between the Parties in a manner that changes the circumstances that have formed the basis for the conclusion of this Agreement”, as similarly stated in the Political Declaration.

 

If “material impacts on trade or investment are arising as a result of significant divergences between the Parties”, Art. 411(2) (previously 9.4.2) gives each Party the right to take rebalancing measures that are strictly necessary and proportionate to address such a situation.  Even though this instrument is predominantly relevant for future divergence and does not considerably affect the non-regression obligations, it ensures that if one Parties goes further than the other it could adopt “rebalancing” measures in the future. While these would be automatic, they are reviewable by an arbitration process. It should be highlighted that “material impacts” should be seen as a relatively high barrier, meaning that every future divergence will not necessarily qualify for rebalancing measures. On the other hand, and given that there is an arbitration process available, any significant departure in the fields of labour and social, environmental or climate protection, or with respect to subsidy control could, in the future, qualify for “rebalancing measures.”

 

Environment and Sustainable Development (Chapter 8)

 

Unlike chapter 7 of the LPF provisions or the rebalancing rules, this Chapter is not subject to normal dispute settlement. It should be noted, however, that it is subject to both consultation and the well-known EU ‘panel of experts’ process, which several other EU FTAs have introduced. Generally, we should not underestimate the latter in its ability to shine a light on environmental shortcomings, as it can be quite important in practical terms.

The trade and environment provisions in the TCA in Chapter 8 are extensive. While the UK draft text was essentially not used, its influence is evident in the formulation of the provision on forests where present and future generations are mentioned:

 

“Article 403 (previously 8.7): Trade and forests

 

1. The Parties recognise the importance of conservation and sustainable forest management for providing environmental functions and economic and social opportunities for present and future generations, and the role of trade in pursuing that objective.“

 

The provisions which integrate the sustainable development goals into the objectives of the “Chapter 8 on Sustainable Development” follows the EU Draft closely in its provisions on forests, biodiversity and climate change. A blackline reveals that the parties of the TCA weakened the language compared to the EU draft text by introducing in the provision of 8.5 on “Trade and Climate Change”:

 

Similarly, the provision on trade and biodiversity was changed, employing less binding and more optional language.

 

 

A dedicated provision in the main agreement, recognizing the importance of climate change, was derived from Art 2.42 of the EU Draft, as well as paragraphs 18, 75, and 76 of the Political Declaration, to a lesser extent. Like many other EU FTAs, the EU Draft would have committed both parties to “effectively implement the United Nations Framework Conventions on Climate Change, and the Paris Agreement of 2015 adopted thereunder.” This content can be traced to the EU-Japan Agreement, which was the first FTA to contain a comprehensive commitment to implementing the Paris Agreement. Under EU-Japan, each party commits to work together to realise UNFCCC aims, take steps to meet the objectives of the Paris Agreement, and promote trade as a means of reducing greenhouse gas (GHG) emissions and achieving climate-resilient development. Similarly, the EU Draft provision also envisioned a transition to a low GHG economy and climate resilient development. In addition, the Draft employed innovative language, extending climate commitments to encompass EU-UK cooperation on:

 

“Trade-related aspects of climate change policies and measures bilaterally, regionally and in international fora, as appropriate, including in the UNFCCC, the WTO, the Montreal Protocol on Substances that Deplete the Ozone Layer, the International Maritime Organisation (IMO) and the International Civil Aviation organization (ICAO)” (Art. 2.42 para. 3 EU Draft).

 

Article 403(3) (previously 8.5.3) does not mandate cooperation as such but now obligates the Parties to ‘work together to strengthen their cooperation’; but all EU proposed fora for climate cooperation were included in the TCA.

 

Conclusions

 

In sum, TCA contains the most far-reaching commitments toward sustainable development beyond broad facilitation and cooperation provisions, going considerably further than the more recent EU FTAs. The combination of elevating climate change to an essential element of the treaty, strong non-regression provisions and future balancing measures mean that in this field the TCA is trailblazing.

Barnard & Peers: chapter 22, chapter 26

Photo credit: MichealisScientists, via Wikimedia Commons