Deforestation, EU Climate, Environment, Labour, Human Rights, Exclusive Interviews, Latest news, Social & human rights

INTERVIEW: Encouraging mirror clauses is playing with fire

A conversation with John Clarke about the do’s and don’ts of requiring specific production method standards for the EU’s agricultural imports.

***

The call for ‘mirror clauses’ in bilateral trade agreements is making a political comeback in the midst of farmer protests across the continent. European Union member states including France, farmers across Europe, and many members of the European Parliament are calling for such clauses to be included in the EU’s free trade agreements.

But what are mirror clauses? And why might they be problematic from a legal and trade perspective? And how to better support European farmers?

John Clarke is a former Director at the European Commission and a former head of the EU Delegation to the World Trade Organization in Geneva.

Rob Francis and Iana Dreyer spoke to John Clarke, a former director for international relations at the European Commission and a former head of the EU delegation to the World Trade Organization in Geneva.

Q: What are mirror clauses and do they make sense?

John Clarke: The idea of a mirror clause is that any imports of agri-food products must meet all EU production standards, be it about wage rates, environmental regulations, climate and animal welfare rules, or rules related to pesticides and herbicides.

In other words, the way that the food is produced in the third country must mirror exactly European production methods.

Let’s be clear though: we are not talking about imported products complying with European health and safety standards. That is not negotiable. Imports must always comply with EU health and safety standards irrespective of FTAs. If for example imported grapes carry on their skin a banned carcinogenic herbicide, they can’t be imported. If poultry meat carries salmonella it cannot enter the EU.

But it is illegal under international trade rules to ban imports from another country just because it has different production methods where this does not affect the final product. You can’t just ban a  product because of the way it was produced.

Let me give an example.  Let’s say there is a fruit imported that has been produced with a pesticide which, although banned in the EU, carries no trace in the final product. The import poses no health-and-safety issues for the EU. So there is no justification for banning it.

I do recognise that civil society has understandable concerns about how food is produced in some countries.

And there is also a justified concern amongst European farmers about social dumping.

But most problematically, there is the protectionist dimension. Every time I hear producer groups in Europe saying we need a level playing field in the face of cheaper imports, that is the cue for protectionism.

Politicians are playing with fire by encouraging mirror clauses.

This is why. It is more expensive to produce food in Norway and Switzerland. Would the EU accept Norway or Switzerland banning EU imports because the EU has lower wage rates or different animal welfare standards or different rules regarding nitrogen leakage? Of course not. The EU would regard that as imperialistic. Would we accept that we can only export beef to the USA if the animals are fed with hormones? Of course not!

If the EU uses the level playing field argument in a WTO dispute, it will lose, because that is usually a synonym for protectionism. The EU already lost a case in the WTO over hormone-fed beef as there was no scientific basis for the ban, which did not affect the final product.

Q: What do World Trade Organization rules say about environmental and labour standards?

I negotiated in 1991 the Technical Barriers to Trade agreement and drafted the provision that effectively prohibits mirror clauses.

The WTO strikes a very good balance between protecting the environment, human, animal health, and animal welfare, without allowing protectionism.

It does not in general allow you to impose your domestic production standards on imports if those standards are not reflected in the final product.

But there are two exceptions to this in the GATT.

One is the so-called public morals exception. If there is legitimate widespread public disdain for a particular production method, a country can ban the import provided it is also banned domestically.

One example is the ban on seal skins in Europe, which was taken on animal welfare grounds.  The planned regulation to phase out cages in, for example, pig rearing could also apply equally to imports due to strong public antipathy to caging.

The other exception is if the import is damaging the global commons of the environment such as harming biodiversity or exacerbating climate change.

That’s the basis for the EU’s new regulation banning the imports of products which have been produced via deforestation. This regulation is legitimate because the production method has a transboundary impact. Deforestation increases greenhouse gas emissions and damages the global climate.

And if a ban is based on a global international agreement or standard, then it is likely too to pass a WTO test. If you ban a product because the way it is made contravenes an International Labour Organisation convention to which the exporting partner belongs, then you are safe in WTO terms.

Q: Is it possible for the EU to insert mirror measures into its bilateral free trade agreements?

In its free trade agreements, the EU is at liberty to impose its domestic standards extraterritorially.

But there are limits to what other countries will accept.

We are now reaching a tipping point, where trade partners like India, Indonesia, Mercosur, and Thailand could say “thanks, but no thanks”.

As developing countries, they might not be able to meet our standards. They can and indeed must meet the EU’s health and safety standards, but they have different priorities such as poverty reduction and employing people in rural areas, and not necessarily the same priorities when it comes to e.g. the use of particular herbicides and the like.

So if we push too hard, and as a result these countries walk away from an FTA, the EU would be left empty-handed. We will not obtain better access to those markets for our French, Italian, and Spanish farmers. And we won’t succeed in getting these countries to progressively adopt higher environmental or animal welfare standards.

As for our autonomous regulations we have to ensure that we remain WTO compatible or else we will risk retaliation from our trading partners, which as the world’s biggest agri-food exporter we cannot afford.

Q: How else could the EU work with other countries to improve the sustainability of their production methods?

Cooperation and not coercion is the way forward. But that also means ensuring that we implement our rules and regulations in line with WTO rules.

We should use international standards where we have them, and we should engage with the rest of the world in international organisations to try and find multilateral agreements.

Secondly, we could agree equivalence with other countries. The EU could acknowledge that whilst a country’s production standard may be different, it achieves the same result. This equivalence is the basis of the single market and could be extended to the rest of the world.

Several of our FTAs provide a platform for equivalence. But many of our trading partners don’t regard the EU as equivalent, as a union, for their domestic health and safety purposes. This has been a major problem with Korea, Japan, and Canada etc. who approve each EU member state separately.

It’s been a great disappointment that we haven’t insisted on signing equivalence agreements as a condition of signing FTAs.

 Q: If mirror measures are not a solution, how else can we make farmers’ lives easier?

Politicians need to explain the limitations of mirror clauses. It’s not easy, as what’s not to like about insisting that imports apply EU production methods? It’s a superficially attractive proposition.

There also needs to be more financial support to compensate the higher costs of meeting the EU’s new very high environment production standards, animal welfare requirements,  and climate-related measures, and to finance currently very expensive inputs. This money could be found by taxing the rich multinationals – Big Tech etc – that don’t pay much tax in Europe.

The EU should also more seriously apply its own Directive on Unfair Trading Practices, which has not yet addressed the imbalance between the money going to processors and retailers compared to the farmgate prices.

The EU also needs to work in international organisations to obtain agreements on pesticides standards and animal welfare.

And finally, there is a case to slow down the EU’s green agenda. Its objectives are essential, but the EU could in some cases introduce longer transition periods to allow more time for domestic adjustment, especially for smaller producers and developing country farmers.

Leave a Comment

Your email address will not be published. Required fields are marked *

*

This site uses Akismet to reduce spam. Learn how your comment data is processed.