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6 Sep 2021

David Lawrence, Trade Justice Movement

How will post-Brexit trade deals affect human rights?

UK parliament

In response to a recent grilling from MPs, Trade Secretary Liz Truss said the UK’s “trade policy must reflect our values”. Her comments followed frustration among MPs, businesses and civil society that the UK has failed to set out what its aims are for trade after Brexit. My organisation, the Trade Justice Movement, shares these concerns. We represent 60 NGOs and trade unions campaigning to make trade work better for people and planet.

While the UK Government has made a lot of noise about new trade deals, it has not made clear what the aim of these deals are: how they will support jobs and a post-Covid recovery at home, and how they will promote human rights and environmental protection abroad. The guiding philosophy of the Government seems to be to do whatever it takes to secure as many trade deals as possible.

The Trades Union Congress recently found that more than a third of the non-EU nations with which the UK has secured trade deals are abusing workers’ rights, including five out of the 10 “worst countries in the world for workers”. This suggests the UK is not using trade deals as a means through which to support and reward greater action on human rights internationally.

Of course, that’s not to say the UK itself has a clean record when it comes to protecting rights domestically.

The system of Investor-State Dispute Settlement (ISDS), which the UK continues to include in its trade policy, is also at odds with a rights-centred trade policy. ISDS allows international investors to sue governments in secretive international tribunals for any measures which harm their profits. These controversial clauses have been criticised by human rights groups such as Amnesty International, and have been used to challenge anti-discrimination legislation in South Africa, workers’ rights in Egypt, has been shown to impact on the rights of indigenous communities in Peru and health legislation in Australia. Furthermore, ISDS can lead to ‘regulatory chill’, where governments choose not to introduce rights legislation for fear it will be challenged.

ISDS has no place in a rights-centred trade policy. Aside from its direct challenge to environmental, social and other rights, ISDS also undermines the sovereignty of national courts and creates unequal legal representation between investors and ordinary citizens. While corporations have access to ISDS recourse, citizens cannot use the same mechanisms for challenging companies when their own rights are harmed.

Despite the UK’s support for ISDS, pressure from Australia and New Zealand means the mechanism is unlikely to be included in deals with those countries. This is welcome progress, although it could be undermined by the UK’s negotiations to join the Trans-Pacific Partnership (CPTPP), which already has ISDS baked into the agreement. Unless the UK follows in the footsteps of New Zealand, which successfully negotiated side-letters with CPTPP members to exempt itself from ISDS provisions, these harmful clauses could seriously put at risk the rights of citizens - both in the UK and in the Pacific region.

In 2019, Prime Minister Boris Johnson pledged his government would make Britain the “cleanest, greenest country on Earth”. However, the Department for International Trade has been given free rein to negotiate new FTAs with countries which have far lower environmental standards than the UK, including the US and Australia, which adopt carbon-intensive approaches to farming and score poorly on climate action measures. It is still unclear what, if any, climate protections these deals will contain.

Furthermore, trade deals increasingly include regulatory cooperation chapters which empower negotiators to align regulations, with minimal public scrutiny. There is a fear this could lead to a ‘race to the bottom’, as countries adopt the lowest common denominator. Aside from being a threat to democratic decision-making, regulatory cooperation chapters could undermine efforts to tackle climate change if free trade is consistently prioritised over high standards. The frequent use of ISDS to challenge environmental regulations, including in Germany and Canada, illustrates another threat posed by trade agreements.

For all the challenges and threats raised in this short blog post, the fact remains that Brexit offers the UK an opportunity to improve on the EU’s trade policy. The Covid-19 pandemic has led many countries to question the prevailing global economic model - from vaccine hoarding and technology transfer to state-led industrial strategy and reshoring of key industries. The scale of the climate challenge means citizens and businesses are rethinking existing models and are willing to embrace change. Even the Biden administration in the US has demonstrated some fresh thinking on trade policy, and seems to be moving away from an obsession with deep, bilateral trade deals of the kind the UK has prioritised.

The UK has an opportunity to develop a rights-centred trade policy. A good starting point would be firmly ruling out ISDS from all new trade agreements, particularly the CPTPP, and publishing a comprehensive trade strategy which puts human rights and the environment at its heart. Finally, the Government must involve MPs and the public in the trade negotiation process through strengthening parliamentary scrutiny and transparency. These measures would be key first steps towards a trade policy that delivers for people and planet.

David Lawrence is Senior Political Advisor with the Trade Justice Movement

Trade and corporate accountability

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