A Sustainability Toolkit for Trade Negotiators:

Trade and investment as vehicles for achieving the 2030 Sustainable Development Agenda

3.7 Other Environmental Commitments

RTIAs can involve the parties committing to any number of environmental efforts of joint interest, though usually (but not always) they would be restricted to those with some relation to trade and investment. Sample text is not offered here, but rather a few positive examples are presented and briefly discussed.

Environmental goods and services

The WTO’s Doha Ministerial Declaration included a mandate to negotiate “the reduction or, as appropriate, elimination of tariff and non-tariff barriers to environmental goods and services” (Para. 31.3). Those talks have not yet borne fruit, but they have sparked interest in other regional forums, including an ongoing plurilateral effort among a group of WTO members to reach an environmental goods agreement.

Several RTIAs have also committed the parties to working on liberalization of trade in environmental goods (but not usually services). The most substantial of these were the Asia-Pacific Economic Cooperation’s agreement, reached in 2012 and implemented in 2015, to reduce tariffs on a list of 54 environmental goods to 5 per cent or less, and the New Zealand-Taiwan agreement to eliminate tariffs on hundreds of environmental goods on entry into force of the treaty in 2013. Others are much more hortatory in nature, and may reflect a desire to highlight and reaffirm commitment to work ongoing in other forums:

Examples

“The Parties are resolved to make efforts to facilitate and promote trade and investment in environmental goods and services, including through addressing the reduction of non-tariff barriers related to these goods and services.” (CETA, Article 24.9(1))

How Commonly Used

Examples

“… we are pleased to endorse the below APEC List of Environmental Goods that directly and positively contribute to green growth and sustainable development objectives on which we will reduce applied tariff rates to 5 per cent or less by the end of 2015 taking into account economies’ economic circumstances and without prejudice to their positions in the World Trade Organization (WTO) …” (20th APEC Economic Leaders’ Declaration; Annex C)

How Commonly Used

Examples

” … the Parties shall eliminate all tariffs on environmental goods* upon entry into force of this agreement.

*  For the purposes of this Agreement, environmental goods are those which positively contribute to the green growth and sustainable development objectives of the Parties. Alist of environmental goods is attached as Annex 7.” (Agreement between New Zealand and the Separate Customs Territory of Taiwan, Penghu, Kinmen, and Matsu on Economic Cooperation, Chapter 17, Article 3.2(a))

How Commonly Used

Subsidies

Several of the most environmentally harmful sorts of subsidies are also arguably trade and investment distorting: fisheries subsidies and fossil fuel subsidies. While there has not yet been any agreement to work on the latter in the context of a RTIA, the former was addressed with substantial and binding commitments in TPP. Among other things, the parties agreed that:

Examples

“… no Party shall grant or maintain any of the following subsidies … :

a)      subsidies for fishing that negatively affect fish stocks that are in an overfished condition; and

b)      subsidies provided to any fishing vessel while listed by the flag State or a relevant Regional Fisheries Management Organisation or Arrangement for IUU fishing …” (Article 20.16(5))

How Commonly Used

Corporate social responsibility (CSR)

Several RTIAs contain hortatory pledges to work cooperatively on CSR. No treaty to date has binding commitments on CSR.

One way in which such commitments might be effected is by use of Article 10bis of the Paris Convention as incorporated into the Agreement on Trade-Related Intellectual Property Rights (TRIPs) (Article 2.1). Article 10bis commits the parties to protecting other parties against unfair competition. Parties could agree that, in respect of this commitment, they will make companies’ obligations on CSR subject to disciplines of unfair competition law in domestic legislation.

The more common hortatory CSR provisions may have positive impact, but only if they are pursued with an adequate measure of political will.

Examples

“Each Party should encourage enterprises operating within its territory or jurisdiction, to adopt voluntarily, into their policies and practices, principles of corporate social responsibility that are related to the environment, consistent with internationally recognised standards and guidelines that have been endorsed or are supported by that Party.” (TPP, article 20.10)

How Commonly Used

Examples

The EU’s draft Trans-Atlantic Trade and Investment Partnership (TTIP) negotiating text [Article 20] (tabled October 19, 2015) contains a substantial article on CSR committing the parties, among other things, to promoting CSR and encouraging its uptake.

How Commonly Used

Examples

“The Parties, in accordance with their domestic policies, agree to promote corporate social responsibility (CSR), provided that CSR-related measures are not applied in a manner that would constitute a means of arbitrary or unjustifiable discrimination between the Parties or a disguised restriction on trade. Promotion of CSR includes among others exchange of information and best practices, education and training activities and technical advice. In this regard, each Party takes into account relevant internationally accepted and agreed instruments, that have been endorsed or are supported by the Party, such as the OECD Guidelines for Multinational Enterprises, the UN Global Compact, the ILO Tripartite Declaration of Principles concerning Multinational Enterprises and Social Policy.” (EU – Vietnam FTA, Chapter 15, Article 9(e)).

How Commonly Used

Examples

“Investors and their investment shall strive to achieve the highest possible level of contribution to the sustainable development of the Host Party and the local community, through the adoption of a high degree of socially responsible practices, based on the voluntary principles and standards set out in this Article.

The investors and their investment shall develop their best efforts to comply with the following voluntary principles and standards for a responsible business conduct and consistent with the laws adopted by the Host Party receiving the investment:

  1. Stimulate the economic, social and environmental progress, aiming at achieving sustainable development;
  2. Respect the human rights of those involved in the companies’ activities, consistent with the international obligations and commitments of the Host Party;
  3. Encourage the strengthening of local capacities building through close cooperation with the local community;
  4. Encourage the development of human capital, especially by creating employment opportunities and facilitating access of workers to professional training;
  5. Refrain from seeking or accepting exemptions that are not established in the legislation of the Host Party, relating to environment, health, security, work or financial incentives, or other issues;
  6. Support and maintain good corporate governance principles, and develop and apply good practices of corporate governance;
  7. Develop and apply effective self-regulatory practices and management systems that foster a relationship of mutual trust between the companies and the society in which the operations are conducted;
  8. Promote the knowledge of workers about the corporate policy, through appropriate dissemination of this policy, including programs for professional training;
  9. Refrain from discriminatory or disciplinary action against the employees who submit grave reports to the board or, whenever appropriate, to the competent public authorities, about practices that violate the law or violate the standards of corporate governance that the company is subject to
  10. Encourage, whenever possible, the business associates, including service providers and outsources, to apply the principles of business conduct consistent with the principles provided in this Article; and
  11. Respect local political activities and processes.” (Brazil – Malawi BIT, Article 9)

How Commonly Used

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