Trade policies for fair trade

Uncontrolled free trade, based on the premise who can pay least to those who produce goods, has run its course. Trying to target its adverse effects, proponents of fair trade are pushing for value-based trade policies, advocating for rules of conducts that will connect trade with respect for human rights, labour standards and the environment.

The recently passed legislation by the European Union to stem trade in conflict minerals and torture goods herald a promising shift in that directions.

Chairperson of the Committee of International Trade at the European Parliament since 2014, the German social-democrat Bernd Lange sheds light to the objectives and future of EU trade policy and what can be done to ensure that trade doesn’t happen to the detriment of people’s rights to decent life and work and a possible future where these are a norm.

How is EU trade policy shaped? Who forms and what informs the objective of EU trade policy?

Trade policy is an exclusive competence of the European Union - one of the few policy areas in which the Union itself is in the driving seat.

I think that there are very good reasons why member states and their parliaments decided that the European level should deal with trade issues. In our globalised world, in which nation states play a less and less important role, we need to act together or risk becoming obsolete. But that does not mean that member states or their parliaments have no say in the matter, far from it. They are actively engaging through their representatives in the Council and through contacts to their ministries at home.

There are three main institutions that govern the European Union’s trade policy: the European Parliament and the Council of Ministers (where member states are represented). Together, these two bodies form the legislative. And the European Commission, the executive. All three institutions have to work together to ensure that we deliver results.

What I find very important, especially when we speak about democratic legitimacy, is that over the years the European Parliament has turned into a self-confident actor, and today exercises the same rights and responsibilities as the European Council.

How has the direction of EU policy changed throughout the years?

The current Commission has promised a shift to a more value-based trade policy. This means that economic interests alone should not be the driving forces of our policy, but rather only one of many factors - fair trade, not free trade, should be the new motto.

There is a noticeable shift in attitude, and recently passed legislation to stem trade in conflict minerals and torture goods shows that we are heading in the right direction.

While I welcome this change in direction, I still think there remains a lot of work to be done to live up to the high ambitions set out in the current trade strategy. We need to tackle the challenges of global value chains and are currently working on the right tools to do the job.

Where is EU trade policy heading - in the age of Brexit and "Trumpism"?

We are only strong when we stand united and speak with one voice.

That is why I think the UK’s decision to leave the EU can only produce losers. I hope that this was a wake-up call to other member states and may even prod member states to work more closely together.

What is also clear is that we stand for certain values. We will always champion the rule of law, not the rule by the powerful. If the current US administration truly wants to brush aside rules-based trade relations, they will run into trouble.

Has EU trade policy been successful in promoting social standards?

It’s a very mixed picture. While I’m usually very optimistic, I’m not convinced that the glass is half full rather than half empty.

What we do very well is setting up the necessary fora to have in-depth discussions on social standards with our partners and civil society actors. But not all our partners share the same approach to social standards, and we have seen time and again that if the approaches differ and the situation of workers in third countries deteriorates, there is very little that we can do, especially in the short run. We need to find ways to fix this.

What could be done to make EU trade policy more effective in this regard?

We have a wide range of policy instruments, and should be precise when we talk about what we expect each instrument to deliver.

I think when it comes to our trade agreements, there is quite a bit of room for manoeuvre. The European Commission has so far been very reluctant to put pressure on partner countries to ensure their compliance with the provisions of our trade and sustainability chapters. On the one hand, this is understandable - a confrontational approach will surely do more harm than good. One the other hand, I see potential to engage in a more constructive dialogue which could result in an improvement of the situation of workers.

Then we have our legislation, first and foremost the generalised system of preferences, which enables us to grant preferential market access to developing countries. The idea is good, but the implementation tricky - especially challenging is the monitoring of 27 core conventions that beneficiaries may not violate.

What role can trade unions and NGOs play in EU trade agreements and preferential schemes?

Many NGOs and trade unions have a global network that they can make use of to inform decision makers back in Europe.

I am of course especially close to the Friedrich-Ebert-Stiftung and find their work invaluable. Whenever I lead a delegation from my committee to a foreign country, I make sure to find time to sit down with the local FES office to get undiluted information on the situation on the ground. I do not know any other organisation that offers a similar depth of information.