A week in Brussels, Anti-coercion instrument, Latest news, MC12, Social & human rights

Week in Brussels: forced labour ban, EU views on MC12, anti-coercion instrument

One can’t say the European Parliament is not working diligently. It shows in this week’s range of trade-related activities. It approved lifting  import duties on Ukraine and expedited its work on the GSP regulation overhaul.

Below is a selection of what else happened on trade in parliament this week. By Rob Francis and Iana Dreyer.

MEPs prepare recommendations for EU forced labour product ban

The European Commission is due to publish its planned market restriction on products made from forced labour by September.

Eager to feed into this process before the summer, this week the European Parliament’s international trade committee convincingly adopted a motion for resolution on the issue with 37 for, zero opposed, and five abstentions.

The motion, which was cobbled together between the political groups, will now be forwarded for debate and adopted by the plenary in the week beginning 6 June.

In their resolution parliamentarians are calling for a “new WTO-compatible trade instrument …banning the import and export of products made or transported by forced labour and that is complemented with measures for intra-EU trade”.

The definition of forced labour should be measured against International Labour Organisation indicators “which include abuse of vulnerability, restriction of movement, withholding identity documents and debt bondage”.

MEPs also recommend that forced labour products be banned on the basis of production site, importer, company, transporter, or the particular region in case of state-sponsored forced labour.

The situation of the Uyghurs in Xinjiang in China is referenced in the recitals as an example of such a region.

Where there is “sufficient evidence” that goods have been made with forced labour, public authorities should seize the goods. It will then be for the importer to prove the absence of forced labour in order for the goods to be released.

The resolution also “stresses the importance of cooperating with like-minded partners to put an end to forced labour globally and ensure that goods made by forced labour are not traded”.

It notes that “joint efforts are needed to ensure that the ban is not circumvented and that the suspected goods cannot be re-routed”.

Finally MEPs state that the “new trade instrument…should be coherent and complementary to other due diligence initiatives and human rights and sustainability provisions in force and says that the review of the action plan of the EU’s trade and sustainable development chapters in free trade agreements also be taken into account.

The resolution was adopted in conjunction with a series of questions on the future proposal to be answered by the commission during the same plenary session next month.

“We urgently need to put an instrument in place that ensures we target products whose production or transport exploit forced labour and stop their circulation,” said committee chair Bernd Lange following the vote. “We have clearly laid out the principles such an instrument needs to adhere to, now it’s time for the Commission to deliver.”

Dombrovskis calls for clear outcomes at MC12 & e-commerce moratorium extension

With less than a month until the 12th ministerial meeting at the WTO on 12-15 June, the European Commission is under pressure to create the conditions for agreement on at least some of the topics up for discussion in Geneva, namely agriculture, fish, the TRIPS waiver, and WTO reform.

In the European Parliament’s international trade committee this week European Commission vice-president and commissioner for trade Valdis Dombrovskis said that outcomes from the ministerial “need to be clear by the end of this month”.

The Russian invasion of Ukraine has made the landscape even more difficult. The EU trade chief admitted that in this context the EU is not negotiating with Russia in the room.

Discussions on the agreement reached by the ‘quad’ (EU, India, South Africa, United States) on waiving intellectual property rights for COVID vaccines are proving challenging.

Talks began earlier this month with the wider membership, but it now appears that not even all the quad members agreed with the content.

Dombrovskis explained how domestic consultations are continuing in Washington with the aim of bringing Congress onboard, after the latter seemed to suggest they had been blindsided by the announcement of the agreement.

US trade representative Katherine Tai this week “could not provide a clear timeline” on these consultations, said the commissioner. He called on all quad members to “defend the text” but acknowledged the “complex landscape”. The EU has already undertaken its internal consultations and is “ready to engage”, said the EU trade chief.

Any agreement on intellectual property would be slotted into the agreement on a broader declaration on trade and health. Dombrovskis explained that work is progressing here on new compromise text, – although he ominously referred to the need to “bring India and South Africa onboard”.

The EU top executive signalled that a deal on fisheries subsidies is “possible” next month, but the key stumbling block remains special and differential treatment for developing countries.

“It is important for other key players to compromise, otherwise there is a real risk of failure,” Dombrovskis warned.

Agriculture discussions are “more complicated”, Dombrovskis said. India is pushing for permanent provisions on public stockholding which are opposed by the US, Brazil, and Australia.

There are “good prospects”’ for a declaration to launch the WTO reform process, he explained, emphasising that dispute settlement would be an “important element” for the EU.

Prolonging the e-commerce moratorium is currently being “held hostage by India, South Africa, and Indonesia,” he continued.

The EU considers that allowing the moratorium to expire would be “detrimental” to streaming providers and would be a “serious blow for developing countries” when it comes to reaping the benefits from digital trade.

The EU will review its participation in the multilateral e-commerce programme if participating countries block the moratorium, said Dombrovskis.

European Parliament to “fine-tune” anti-coercion instrument

The legislative process of the new European Union anti-coercion instrument is slowly picking up gear.

The new instrument aims to deter countries from trying to strong-arm the EU or its member states with economic pressure when they disagree about one if its policies. The mechanism foreseen gives the European Commission unprecedented powers to adopt potentially sweeping trade restrictions (see here).

The EU’s member states are currently working on their common position on the basis of the regulatory proposal tabled by the commission last December. The European Parliament’s rapporteur Bernd Lange for his part already released his draft report on the file.

Lange’s report was discussed at the international trade committee’s monthly meeting earlier this week. The report does not fundamentally seek to alter the proposal but proposes both further powers for the EU and greater transparency in decision-making vis-à-vis his institution.

“Of course I am totally trustful towards the European Commission. But sometimes it is better to have clear, transparent steps for the procedure,” said Bernd Lange on Monday.

Fellow committee members are due to file their amendments today. There are few indications that there are fundamental disagreements among MEPs on the core premises of the regulation.

INTA committee vice-chair Anna-Michelle Asimakopoulou told fellow MEPs on Monday: “We’re doing a fine-tuning exercise. We are pretty well aligned on most of the issues”.

Bernd Lange hopes inter-institutional ‘trilogue’ negotiations can start in the second half of this year.

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