Global Trade and Social Fundamental Rights : the Perspective of the European Union

The current work analyses the dialectic between European Union external action principles, global trade, and social rights under a legal perspective. While trade liberalization internally and externally has always been one of the pillars of the process of European integration, over the past few decades international investment treaties signed by the EU with other global players have turned the same EU into the world’s largest trade power. More particularly, this paper focuses on the EU’s strategy to promote respect for social and human rights in its external action. Firstly, it will explore the systematic potential of the ‘horizontal social clause’, as contained in Article 9 TFEU after the Lisbon Treaty, stipulating that EU policies must take social requirements into account to ensure consistency between various actions and social objectives. This clause will be discussed having regard to EU external dimension under Articles 2 and 3 of the same Treaty. At an empirical level, the work will discuss the approach of the EU to labour rights and social standards in the latest free trade agreements (i.e., Japan, Canada, Vietnam, South Korea).Secondly, and with the double aim to identify and analyse EU labour commitments, other social provisions of EU external action will be dealt with, including the promotion of International Labour Organization labour standards in free trade agreements (i.e., in the Cariforum), Corporate Social Responsibility and the Generalized System of Preferences (GSP), in particular the GSP Plus scheme: the thesis is that the GSP model draft by the EU is an exemplar model of positive linkage between international trade and social rights. The study will also assess the impact of cooperation mechanisms in the EU Trade agreements by considering either the Trade and Sustainable Development Chapters or the Regulatory Cooperations Chapters, including the specific cooperation activities undertaken by the parties. Thirdly, a particular attention will be given to the complaint and dispute settlement mechanisms, essentially the Investor–State Dispute Settlement (ISDS) clause, which is, under a legal viewpoint, a system of enforceability of corporations’ interests over the right of States to govern their own affairs. In particular, the paper will emphasize that such a legal tool represents a sort of private self-regulation of sanctions for violations of the rules of mega-treaties on trade, between corporations and States, with the risk of a possible prevalence of corporations’ interests on States’/citizens’ ones. Under a de jure condendo approach, and despite the progress made by recent agreements signed by the EU, the paper will propose to cancel from all investment treaties the provision of an ISDS clause (or similar and more recent mechanisms) in the field of labour issues, as it may represent a serious threat to social rights if deemed as human rights. In the final section it is argued that labour provisions in EU bilateral trade agreements have widened and deepened over the past decade, due to the stronger influence of the European Parliament, path-dependencies stemming from the EU’s previous template, and the need to gain public support in the face of criticism of free trade agreements. In any case, the analysis does not want to overstate the importance of the linkage between fundamental social rights and global trade in the EU strategy: indeed, despite a certain social and economic homogeneity among the EU Member States and some other States (i.e., Canada, South Korea or Japan), the investment treaties are not able to automatically ensure that labour rights will be maintained without bottom-down changes, or that there will be an automatic convergence of labour legislations of the involved regional systems, due to their different historical and political patterns. Moreover – even if the author does not underestimate the difficulties along the way ahead and refuses to offer simplifications – it must be considered that currently everywhere neo-liberal tendencies to deregulate labour law in the interest of market needs are becoming more and more dominant.