The TTIP sustainability chapter should aim at promoting the social, environmental and labour aspects of trade. The EU and US approaches to sustainability chapters in free trade agreements are different in terms of scope and enforcement, the first privileging a highly developed scope and language but relying on soft pressure, the second remaining vague as to the scope but including stronger provisions on enforceability. Therefore, the challenge will be to find the right balance between the EU and the US approaches.
When it comes to enshrining ILO core labour standards in TTIP, a constructive approach has already been taken in the negotiation mandate with the reference to the 1998 “ILO Declaration on Principles and Rights at Work”. With this Declaration, all ILO Member States – including the US – commit to the principles set out in the core labour standards independent of whether or not the ILO Conventions in question have been formally ratified. Accordingly, the United States has also clearly committed to respect, to promote and to effectively implement vital worker rights such as freedom of association. Therefore, and building on the EU’s existing free trade agreements with third countries, the sustainability chapter in TTIP can promote decent work on both sides of the Atlantic through reference to the 1998 ILO Declaration.
As a consequence we believe it is neither necessary nor appropriate to include in the sustainability chapter a commitment by parties to ratify ILO core Conventions. TTIP should however encourage effective domestic implementation of ratified ILO Conventions at central and sub-central levels.
Furthermore, using TTIP to force ratification of ILO Conventions by the US or EU Member States who have not done so would be unrealistic. In the US, the political decision-making structure as well as the 1988 Tripartite Agreement stipulating that no ILO convention will be forwarded to the U.S. Senate for ratification if ratification would require any change in U.S. federal or state laws, render ratification of ILO Conventions a highly complicated process. A similar situation applies to the EU, where only individual EU member states can ratify ILO conventions, not the EU itself.
Likewise, the sustainability chapter should encourage effective domestic implementation of ratified Multilateral Environmental Agreements at central and sub-central levels but not include binding commitments by parties to further ratifications.
BUSINESSEUROPE welcomes cooperation on trade-related aspects of the current and future international climate change regime, as well as means to promote low-carbon technologies, renewable energy goods and related services and energy efficiency, however we believe negative impacts on trade by unfairly discriminating between products and sectors should be avoided.
European companies have company-wide ethical standards that they apply globally in their business operations via their corporate social responsibility (CSR) approaches. These already integrate a number of social and environmental standards and best practices that in many cases go beyond existing regulations.
As regards CSR, we support the inclusion in the sustainability chapter of TTIP of explicit references to the OECD guidelines for multinational companies as done in previous EU FTAs, a reference to the UN Global Compact, the ILO Tripartite Declaration of Principles concerning multinational enterprises and social policy (MNE Declaration) and the UN Guiding Principles on Business and Human Rights.
To conclude, CSR can further sustainability objectives but we believe provisions in TTIP should not interfere with voluntary and business-driven approaches by companies. These have the merit of better adjusting to different business models and supply chains structures.