1. Form Follows Function: Why Social Standards are Stricter in U. S
Form Follows Function: Why Social Standards are Stricter in U.S. than in EU Preferential Trade Agreements
Governance and Integration through Free Trade Agreements (GIFTA)
SOCIAL AND LABOUR IMPACTS OF FREE TRADE AGREEMENTS
Brussels, July 7 and 8, 2016
Tobias Leeg, Research Fellow, Free University of Berlin,
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2. 1. Social Standards in U.S. and EU Preferential Trade Agreements (PTAs)
U.S. and EU Social Standards obligate PTA signatories to adhere to several labour standards of the ILO and Multilateral Environmental Agreements (MEAs)
In contrast to EU member states, the US failed to ratify a large number of key ILO conventions and MEAs
The scope of labor and environmental standards in U.S. PTAs is therefore more limited than in EU PTAs
The enforcement mechanism of Social Standards in U.S. PTAs, however, is much stricter than in EU PTAs
Social Standards are now regular features of both US and EU Preferential Trade Agreements
They obligate PTA signatories to adhere to a number of ILO conventions and multilateral Environmental Agreeements
In contrast to EU member states, the EU failed to ratify a large number of key ILO conventions and MEAs
Since the US eschews to refer to conventions in PTAs to which itself is not a party to, the social standards in US PTAs are more limited than in EU PTAs
The enforcement mechanism of Social Standards in U.S. PTAs, however, is much stricter than in EU PTAs
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3. 1. Social Standards in U.S. and EU Preferential Trade Agreements (PTAs)
Social Standards in U.S. PTAs: The coercive approach
Derogations from social standards can be penalized with
the imposition of financial penalties
or the withholding of trade privileges.
Social Standards in EU PTAs: The cooperative approach
The compliance with social standards should be achieved through
governmental consultations,
civil society dialogue mechanisms
and - in the case of disputes - through non-binding recommendations of expert panels.
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4. 2. The Preferences of Societal Actors
The constellation of societal preferences with regard to social standards in PTAs was almost identical in the US and the EU
U.S. and EU business groups oppose enforceable (!) social standards
U.S. and EU labor and environmental groups demand social standards that are equally enforceable as commercial provisions of PTAs
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5. 3. The Preferences of Policy-makers
The more office-holders depend on interest groups for their re-election, the more control these groups exert over policy-makers decisions.
Unelected bureaucrats in the European Commission are shielded from societal pressures
Executives elected in large constituencies are able to balance conflicting interest groups’ pressures
Legislators elected in small constituencies are more susceptible to narrow interest groups in their electoral districts
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6. 4. The Institutional Form of Delegation
Trade Policy-Making in the US: A Legislative-dominated Process
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7. 4. The Institutional Form of Delegation
Trade Policy-Making in the EU: An Executive-dominated Process
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8. 5. The Negotiations of the US and the EU with Colombia and Peru: A crucial case
Pre-negotiation Stage in the US
U.S. administration opposed to social standards
Congress split between Republicans and Democrats
U.S. administration agrees to compromise language on social standards to create majority in the House in favor of Trade Promotion Authority
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9. 5. The Negotiations of the US and the EU with Colombia and Peru: A crucial case
Pre-negotiation Stage in the EU
Member States split over social standards
European Parliament supportive, but only vague statements since EP excluded from setting negotiation objectives
Commission drafted soft social standards that didn‘t create opposition in the Council
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10. 5. The Negotiations of the US and the EU with Colombia and Peru: A crucial case
International Negotiations
Both the US and the EU can push through their preferred model of social standards in negotiations
International Negotiations without effect on their model
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11. 5. The Negotiations of the US and the EU with Colombia and Peru: A crucial case
Ratification Stage in the US
Democrats win House majority in congressional elections of November 2006
U.S. administration has to accomondate further Democratic demands in order to secure majority for ratification
Renegotiates PTAs with Peru and Colombia to include fully enforceable social standards
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12. 5. The Negotiations of the US and the EU with Colombia and Peru: A crucial case
Ratification Stage in the EU
Council approves PTA without complications
EP criticizes weak social standards, but approves PTA with large majority (486 votes in favor ,147 against and 41 abstentions)
Why support for PTA in EP greater than in the House?
Election modalities for EP, make MEPs less susceptible to special interest groups than U.S. Representatives
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13. 6. Outlook Social Standards in the TTIP Negotiations:
EU wants the two sides to agree first on substance
„We have deliberatly not yet addressed the issue of how these commitmments would be implemented and enforced“
EU Trade Commissioner Cecilia Malmstroem, cited in Euobserver.com, November 6th 2015
14. November 2018