BW4_Trade

As US authorities commence preparations for a possible future trade deal with UK, stakeholders have been invited to submit their comments. Among the 133 responses, several came from US NGOs. 

The Sierra Club highlighted the negative impacts trade agreements have had on communities and environment, pushing for a different approach this time. Their main asks concern transparency standards for the negotiations, in requesting US authorities to make public their proposals and promote stakeholder involvement along the process. The environmental organisation also positioned itself against the investor-state dispute settlement system, said to be favourable to corporations that systematically challenge environmental and health standards in arbitral tribunals.

Along with the Sierra Club, the International Fund for Animal Welfare (IFAW) stressed that a future trade deal must include a strong environmental section. IFAW insisted on the need of addressing marine conservation and providing mechanisms and funds for limiting wildlife trafficking. They also stated that the prospects of a deal should not seek to undermine UK standards, such as those relating to agricultural and pharmaceutical products tested on animals, which are more advanced than many US laws and regulations.

The Sierra Club’s comments on a future US – UK trade deal
International Fund for Animal Welfare’s (IFAW) comments on a future US – UK trade deal
List of 133 replies to the public consultation

In view of a post-Brexit UK-US trade deal, the American authorities have started preparations by seeking public consultation. Out of the 133 replies, the vast majority comes from US industry associations.

For example, The Society of Chemical Manufacturers & Affiliates and National Grain and Feed Association wish to remove the precautionary principle that is applied to food standards and chemicals safety within the EU. Another demand relates to the “mutual recognition of equivalence in safety measures”, which implies the introduction of hormone-treated beef or chlorine-bleached chicken to the UK. The UK’s tests and labels on GMOs are also targeted due to the potential risk on bilateral trade flows for US exporters. The safety-first approach of chemicals regulation could also be affected, as the EU “precautionary hazard system” was noted to likely be an overburden for American companies. SOCMA suggests that REACH data sharing requirements, introduced in order to reduce animal testing, are not sufficiently protecting confidential business information. The US Grains Council wants the UK to follow US pesticides rules which allow the use of neonicotinoid ingredients currently banned in the EU due to risks to bees.

List of 133 replies to the public consultation
Huffington Post on US lobbyists’ asks to Donald Trump
The Society of Chemical Manufacturers & Affiliates’ demands
National Grain and Feed Association’s demands

A leaked official joint trade review between the UK and India shows how Indian policymakers would demand more regulatory flexibility as part of a new trading relationship with the UK. This includes relaxing REACH chemical regulations, which are said to raise compliance difficulties to Indian businesses. India has also frequently challenged REACH regulations at the World Trade Organisation.

Greenpeace article on UK-India trade review

(29/01/2019) The ECJ’s advocate general finds in an opinion that the Investor State Dispute Settlement (ISDS) mechanism, part of the EU-Canada trade agreement CETA, is compatible with EU law given that the ISDS mechanism would only decide on compensations in case of breaches, while it would be bound by the ECJ’s interpretation of EU law. The ISDS mechanism is accused by campaigns across Europe for putting business above people’s interest. It was also challenged by Belgium over whether it interferes with the exclusive jurisdiction of the ECJ and giving preferential treatment to investors.

See new campaign: “Rights for People, Rules for Corporations – Stop ISDS”

(30/01/2019) Labour leader Jeremy Corbyn has revived his proposal for a customs union in a meeting with Theresa May, while UK’s Trade Union Congress is pushing for a dynamic alignment on labour standards.

A customs union holds less guarantees for an environmental level playing field compared to the rejected Withdrawal Agreement. Taking the example of Turkey’s customs union and the proposals for its modernisation (similar to CETA provisions), one could expect rather weak environmental provisions: ratification and implementation of Multilateral Environmental Agreements, and a commitment to a high level of environmental protection, but with uncertain procedures for effective implementation. The backstop was a customs union as well, but with a non-regression clause for the whole UK and more specific environmental legislation requirements for the Northern Ireland. These environmental guarantees would then be the base for a future trade relationship negotiation, according to EU officials.

Commission staff working document on the modernisation of the customs union with Turkey
Draft Withdrawal Agreement

The Norway Plus option made headlines this week as an alternative landing point to the customs union in the Northern Ireland backstop, which is the most contentious arrangement under the Withdrawal Agreement. It would entail UK’s accession to the European Free Trade Association (EFTA), the European Economic Area (EEA) and remaining within the internal market, plus a customs union arrangement to avoid a hard customs border in Ireland.

The EEA Agreement provides for a dynamic alignment with EU environmental legislation and its Annex XX sets a list of those norms. It includes amongst others EU laws on water, air, chemicals or environmental impact assessments. EEA countries adopt EU laws, though often with some delay, a practice which is called “fax-democracy” in Norway (as laws used to arrive from Brussels by fax). Nature management (which covers the Birds and Habitat Directives, as well as Natura 2000 Network) are not included, but are subject to close co-operation. Annex XX is frequently updated according to new relevant EU legislation developments. Norway is also a member of the European Environment Agency and the European Chemicals Agency (as an observer of the latter). Hence, the level playing field requirements would be higher than those provided by the Northern Ireland backstop set out in the Withdrawal Agreement.

European Economic Area (EEA) Agreement (1994)
Annex XX of the EEA Agreement

The Political Declaration on the future EU-UK relationship describes in its last chapter on the economic partnership, in very general terms, the elements for a level playing field to ensure “open and fair competition”. It should cover state aid, competition, social, employment and environmental standards, climate change and relevant tax matters. These provisions should build on what already exists in the Withdrawal Agreement.

Also, a new chapter on regulatory aspects was added last minute to the Political Declaration. Stakeholders believe this allows for deeper cooperation and for a dynamic alignment, which is a key element for policy areas with regular revisions, such as chemicals safety.