EU trading partners who breach international labor standards or climate commitments, face being slapped with sanctions, under EU Commission proposals on Wednesday (22 June).
“While our approach should remain centered on cooperation and engagement, there may be circumstances where sanctions are warranted,” EU trade commissioner Valdis Dombrovskis said in a news conference.
Dombrovskis was referring to circumstances where a partner country breaches the principles of the International Labor Organization and commitments under the 2015 Paris Climate Agreement.
But the commission insisted that sanctions would remain the last resort.
The proposal comes after civil society organizations and MEPs raised concerns over, for example, child labor and deforestation risks not being properly addressed in trade agreements between the EU and third countries.
Sanctions would apply to future trade agreements currently under negotiation, but not to existing trade agreements or those finalized but not yet ratified – such as the controversial EU-Mercosur trade deal.
Nevertheless, many modern trade agreements such as those with Japan or Mexico already include sustainability chapters.
The European Union is currently involved in negotiations with New Zealand, Australia, and Indonesia, and wants to launch talks with India and Indonesia soon.
The new sanctions approach could be first applied to the trade agreement being negotiated with New Zealand since talks are very advanced, Dombrovskis said.
But EU member states will have to greenlight the commission’s inclusion of the sanctions regime into each new trade agreement.
The proposals come after 15 EU countries called on the commission to accelerate the work to finalize and ratify trade agreements to increase the EU’s overall credibility as “a serious trade partner”.
They argued that the Regional Comprehensive Economic Partnership (RCEP), the world’s largest trade agreement including China, Japan, South Korea, New Zealand and Australia, should be a “wake-up call” for Europe.
Nevertheless, the new sanction scheme could be considered an obstacle to completing future negotiations.
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