Trade and sustainability

The EU is committed to promoting sustainable development and universal values in all areas of its external action, including in trade and investment. EU trade policy promotes and protects sustainability standards and human rights in third countries by means of various trade policy instruments, including EU’s unilateral trade preferences, bilateral and regional free trade agreements and export control policy.

Through the Generalised Scheme of Preferences (GSP) the EU grants unilateral trade preferences to vulnerable developing countries with the aim to reduce poverty and contribute to sustainable development in those countries. Beneficiary countries must ensure respect for the principles of core international conventions on human rights, labour rights, environmental protection and good governance. The Commission and the EEAS regularly monitor the implementation of those principles and conventions under the special GSP+ and Everything-But-Arms arrangements. In September 2021, the Commission has adopted the legislative proposal for the new EU’s GSP for the period 2024-2034, improving some of the key features of the scheme to better respond to the evolving needs and challenges of GSP countries and reinforcing the scheme’s social, labour environmental and climate dimension.

EU Comprehensive Free Trade Agreements (FTAs) include a chapter on Trade and Sustainable Development with binding obligations on the parties to implement fundamental labour and environmental standards. Furthermore, the EU’s bilateral agreements contain a clause on the protection of human rights as an essential element of the agreement, allowing the parties to suspend or terminate the agreement in case of breach of the clause. The Commission and the EEAS hold regular dialogue and consultations with stakeholders involved in the monitoring and implementation of sustainable development and human rights commitments by trading partners, including civil society organisations, human rights defenders, national human rights institutions, the business sector and other relevant stakeholders. The Commission has put in place the Single Entry Point (SEP), a new platform for stakeholders to submit complaints to the Commission concerning violations of sustainability commitments by trading partners.

The EU Action Plan on Human Rights and Democracy 2020-2024 includes as a priority to strengthen the implementation of human rights provisions in EU trade policy, including through the GSP and by promoting labour rights in the context of FTAs.

 

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Responsible business conduct

The EU is a global leader on Responsible Business Conduct and has a solid body of legislation and measures to enhance respect of sustainability standards by businesses. EU law imposes due diligence obligations on importers of timber and certain minerals from conflict-affected areas, requires certain large EU companies to report on the sustainability aspects of their operations, and guarantees the rights of victims in cases of human rights abuses. The Commission has adopted a proposal on Corporate Sustainability Due Diligence with the aim to introduce mandatory human rights and environmental due diligence across sectors.

The EU is also committed to combatting forced labour in global supply chains. In July 2021 the Commission and the EEAS published Guidance on due diligence for EU companies to address the risk of forced labour in the operations and business relations, in line with international standards. The Commission is preparing a legislative initiative to prohibit the placing on the EU market of products made by forced labour.

The EU promotes the global implementation of the UN Guiding Principles on Business and Human Rights, the first globally agreed standard to prevent, address and remedy negative human rights impacts caused by business activities. The EU Action Plan on Human Rights and Democracy 2020-2024 sets as a priority to reinforce the EU’s global leadership on the Business and Human Rights, in particular by enhancing the coordination and coherence of EU actions in this area.

 

The EU and the WTO

The EU is committed to multilateralism and the central role of the WTO in rule-making, trade liberalisation and sustainable development. The EU and its Member States are collectively the largest Aid for Trade donor, representing a third of all support provided globally. In recent years, the EU has taken on a leading role in WTO reform, not least to ensure that the WTO remains fit for purpose to support a green and inclusive recovery from the COVID 19 crisis and greater future resilience to such crises.

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