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INTERVIEW – Mirror clauses: EU needs to be collaborative with trading partners

‘Mirror clauses’ are making their way in EU regulations in food production. What are mirror clauses and why are they so controversial?  Emily Rees sat down with Borderlex’s Rob Francis to explain what is at stake in the ongoing debate about these measures.

Senior Fellow at the European Centre for International Political Economy and Managing Director at the consultancy Trade Strategies

Why are we talking about mirror clauses?

Mirror clauses aim to guarantee that imported products are produced under the exact same sanitary phytosanitary, welfare, and environmental standards as those imposed on domestic products within the European Union.

For those on the offensive, the objective is to inject so-called reciprocity in trading relations and to address concerns that domestic products are not competitively undercut by imports which would be produced less sustainably.

Further sharpening the issue, the European Commission has now proposed the Farm to Fork strategy which aims to reduce the overall use of chemical pesticides by 50% and insists that 25% of the EU’s land use is devoted to organic farming by 2030.

How do mirror clauses fit in the EU’s current approach to trade?

The EU has already embarked on the journey of unilateral action, be it with the carbon border adjustment mechanism or the due diligence proposal on deforestation, amongst others.

The question now is what happens at the World Trade Organization once these proposals are enforced and start impacting trade with other countries.

There’s a lot of preoccupation as well with regard to the impact of these measures on developing countries who might already be struggling with food productivity, especially in light of climate change. Many of these countries do not have access to the same plant protection products, do not benefit from EU-style agricultural subsidies to support them in an ecological transition, nor do they have well-funded food safety agencies that parallel the European Food Safety Authority.

For example, Kenya is worried that mirror clauses for pesticides would cut off a large portion of their trade with the EU.

Are mirror clauses legal from an international standpoint?

To date those proposing mirror clauses have stood clear from defining the legal basis that would underpin such clauses.

There are two means to see a mirror clause applied to process and production methods: either negotiate reciprocity as part of a bilateral understanding or impose it as a unilateral measure.

An example of a unilateral mirror clause that could be legitimate would be the EU’s new antimicrobial provisions contained in its regulation on veterinary medicines. These have extraterritorial reach, which means that products that would be imported into the EU would have to apply these rules.

Requiring that imports stay clear of certain practices that could reduce the effectiveness of antimicrobials for treating human disease seems legitimate, but it requires that the list of the products that are going to be either restricted or prohibited from use be devised in a manner that does not constitute a disguised restriction to trade.

Is this not really about keeping competitors out?

The French government has been pushing hard for the advancement of mirror clauses during its ongoing presidency of the Council. It will surprise no-one that we are in an electoral period in France, and that President Macron wanted to use the French presidency as a campaigning platform.

A nice example to illustrate the situation relates to lentils.

France imports half of its need in lentils, with Canada being the largest lentil producer in the world. French farmers repeatedly complain about being undercut by Canadian lentils in the use of a pesticide that’s prohibited in the EU, and that would give Canadian producers a competitive edge.

The EU countries that have been most on board with France on mirror clauses are Spain and Austria, due to pressure from their farmers in anticipation of the implementation of the strategy.

The argument about using mirror clauses to create a competitive level playing field should set off alarm bells for those who favour a rules-based over a power-based trading system.

Without sitting down with trading partners to seek collaborative solutions, Brussels risks designing eurocentric rules that will be considered discriminatory towards imports.

How can mirror clauses be made to stick to societal goals?

In some cases, there are warranted societal justifications to impose measures to protect humans, animals, plants, and ecosystems.

To remain legitimate under international law however, mirror clauses need to be stress-tested to avoid being applied as a means to gain competitiveness, and that’s what I did in a recent paper I published for ECIPE on mirror clauses.

Plant health is obviously a paramount consideration. Regional conditions must be considered, not only to avoid inconsistency with WTO rules, but also to ensure that mirror clauses do not result in a practical barrier on imports from developing countries which would unfairly impact livelihoods.

The European pesticides regime is tailored to the risks of Europe, and not the rest of the world, so requesting that countries with other prevailing conditions and agricultural production systems use only EU authorised pesticides seems utterly disproportionate.

But again, much depends on whether we’re talking about a bilaterally negotiated clause, in which case the trading partner agrees to it and it wouldn’t be necessarily considered protectionist.

An example of that is the inclusion of the Laying Hens Directive in the EU-Mercosur trade deal, whereby Mercosur egg producers can benefit from duty-free access to the EU market if they certify they respect EU-equivalent rules for laying hen welfare.

Alternatively, the EU could decide to go it alone without consulting trading partners. This could be considered protectionist, or at least possibly protectionist.

It depends on how you stress-test the measure.  Does it constitute a disguised barrier to trade, or in certain cases, not even a disguised barrier to trade, simply a barrier to trade?

And the WTO rule-book in all this?

There is some case precedence at WTO level on mirror clauses, always with a repeated message that WTO members should attempt to negotiate a consensual means of protection and conservation rather than apply a unilateral measure.

There is also article XX of the GATT which can be used to justify various environmental measures in international trade. But this article isn’t a joker card: there are also rules to its application, and that’s ultimately how you make the difference between a legitimate or a non-legitimate measure.

Depending on whether the WTO rulebook is a primary concern, we could certainly imagine extending the principle of mirror clauses into a great range of areas such as social rights, governance, perhaps even services. But first we need to see if agri-food mirror clauses are going to stick.

Let’s see how the EU’s first enforced unilateral measures are received by trading partners and take it from there.

We’re going to hear a lot more about mirror clauses, especially as the discussion moves from Brussels to Geneva.

2 Comments

  1. Philippe MUSQUAR

    Thanks for this excellent summary. The issue is neither easy to fathom nor easy to explain. What makes it so mind-boggling is that even the strongest promoters of the concept (the French Council Presidency) have thus far failed to provide a clear definition of the “mirror-clause” concept.
    To a lawyer the very use of the term “clause” (which belongs to the field of conventional rules) sounds odd to begin with if meant to cover unilateral measures.
    And when it comes to provisions agreed with preferential partners in the framework of FTAs, the concept remains very ambiguous.
    In your example concerning the inclusion of the Laying Hens Directive in the EU-Mercosur trade deal “whereby Mercosur egg producers can benefit from duty-free access to the EU market if they certify they respect EU-equivalent rules for laying hen welfare”, what would happen if Mercosur egg producers exported to the EU without such a certificate(*)? Would the consignments in question be denied access to the EU market altogether or simply deprived of the preferential tariff treatment foreseen by the Agreement? I would suggest that both scenarios raise issues of WTO compatibility (in relation to Article XX GATT in the former case and in relation to Article XXIV GATT in the latter).
    There would also be a lot to say about the repeated use (and abuse) of the term “reciprocity” in this context.
    Cannot agree more therefore with your conclusion that we are going to hear a lot about this topic in the months and years to come.

    (*) Assuming of course the Agreement ever comes into force or provisional application

  2. Emily Rees

    Dear Philippe,
    To your questioning on Latin American eggs: the current FTA provisions foresee that only eggs produced under the (arguably imperfect) standards of the laying hens Directive 1999/74/EC be enabled a preferential access under the agreed TRQ. In this case, given the framework of the bilateral understanding, there is no questioning of WTO incompatibility. It is an actionable and enforceable clause.
    With best wishes,
    ER

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