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#8 - Engagement helps making trade more sustainable, not sanctions

Modern trade agreements increasingly include provisions pertaining to sustainable development, which gives rise to questions about their effective implementation and enforcement. The European Commission contributes to the discussion in a “non-paper”, outlining two options: Enhanced engagement or a substantially changed approach which would include sanctions. We believe that there is no evidence that sanctions indeed effect positive change. On the other side, there is evidence for the positive effect of engagement in a process that involves all stakeholders. Such engagement can only work with a view to the long term and progress may appear incremental. As brands with a strong commitment and experience in improving standards in our supply chains, we strongly believe in engagement. 

Sanctions have unintended consequences

We believe that sanctions as a means to enforcing sustainability commitments may trigger unwanted effects, especially in developing countries or least developed countries. Export volumes would be decreased, the inflow of revenue and investment reduced and consequently, employment in the sanctioned country would be lost. This would hit the very workers which are meant to be protected and reduce the capability to invest in environmental protection - the loss of market share of one country would very likely be filled by its competitors without guarantees for better sustainability standards.

There is hardly enough evidence to comment on the effectiveness of EU trade and sustainable development (TSD) chapters in comparison with U.S. and Canadian models which involve sanctions, write the authors of a report entitled Implementation and enforcement of sustainable development provisions in free trade agreements – options for improvement by the Swedish National Board of Trade. Furthermore, the study finds evidence for the positive effect of the EU’s managerial approach in implementing the T&SD chapters. We strongly believe that engagement is effective, as continued critical dialogue allows the EU to maintain its influence over its trading partners and is mutually beneficial for both partners.

Our members are committed to improving social and environmental standards throughout the supply chain and are involved in various voluntary initiatives involving the relevant stakeholders which have led to significant improvements of the working conditions of textile workers and a reduction of the impact of operations on the environment.

Here are some examples:

The chain measurement tool for all industry participants to understand the environmental and social/labor impacts of making and selling their products and services. By measuring sustainability performance, the industry can address inefficiencies, resolve damaging practices, and achieve the environmental and social transparency that consumers demand.

The Ethical Trading Initiative (ETI) is a dialogue platform gathering companies, trade unions and NGOs to improve working conditions of workers in developing countries, touching the lives of more than 10 million workers annually. All corporate members of ETI agree to adopt the ETI Base Code of labour practice, which is based on the standards of the International Labour Organisation (ILO).

Zero Discharge of Hazardous Chemicals in 2020 is campaign supporting the restriction and elimination of certain chemicals during the manufacturing process of textile and footwear products. Signatories support the widespread implementation of sustainable chemistry and best practices in the textile and footwear industries to protect consumers, workers and the environment.

ILO’s Better Work Programme is a platform to improve compliance with labour regulations and competitiveness of global supply chain in the garment sector. Better Work works in 8 countries (Bangladesh, Cambodia, Haiti, Indonesia, Jordan, Lesotho, Nicaragua and Vietnam) reaching 1000 enterprises and one million workers. Areas covered include – among others – child labour, discrimination, forced labour, freedom of association, collective bargaining and national labour law regulations on compensation, contract and workplace relations, occupational safety and health, working hours and more.

The Better Cotton Initiative is a not-for-profit organisation stewarding the global standards for Better Cotton, and bringing together cotton’s complex supply chain, from the farmers to the retailers. BCI was created to make global cotton production better for the people who produce it, better for the environment it grows in and better for the sector’s future, by developing Better Cotton as a sustainable mainstream commodity.

This is the eight of ten messages on international trade. If you like this please give us a star below. If you wish to respond, please send us a message via our contact form.

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latest #tradefacts

#10 - Workers threatened by globalisation need support, not protectionism

| recourse to protectionism “to bring back jobs” is not a solution as the number of jobs put at risk will outnumber those directly protected and cause economic damage.

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| International trade makes both sides of the trade better off: It facilitates economic growth in exporting countries and increases purchasing power on the import side because consumer prices fall.

#8 - Engagement helps making trade more sustainable, not sanctions

| Modern trade agreements increasingly include provisions pertaining to sustainable development, which gives rise to questions about their effective implementation and enforcement.


| Trade defence measures such as antidumping are not well suited to modern international production chains, easily harm the EU economy and consumers.

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