Jun 21 2019

The Geopolitics of Trade Deals and How They Threaten Human Rights

By David Lawrence 

BRENDAN SMIALOWSKI/AFP/Getty Images

Brexit means that the UK is reviewing its trade policy, hitherto an EU competence, for the first time in over forty years. So far, the Conservative government has not offered any radical overhaul, and has done little to reassure campaigners that post-Brexit trade deals will take human rights commitments seriously. However, one positive sign is that civil society is increasingly cognisant of the relationship between trade and human rights. As Brexit unfolds, this is likely to be a key battleground on which human rights campaigners must hold the Government to account.

Perhaps the most important thing I’ve learned since leaving Parliament to work for the Trade Justice Movement is that trade deals have less to do with trade and more to do with politics. This is an important realisation, because it challenges the assumption that trade deals necessarily increase prosperity, and opens up the possibility that there are winners and losers in our global trading system. Furthermore, the political nature of international trade has important implications for human rights.

No one exemplifies the political nature of trade better than Donald Trump, who recently threatened Mexico with crippling tariffs unless they accepted his demands on immigration. Indeed, the new US-Mexico-Canada trade agreement (which replaces NAFTA), is a reflection of US domestic politics, with protections for industries in parts of the US that voted for Trump. The trade war with China, threatened tariffs on India, and sanctions on Venezuela and Iran illustrate this truth further.

The Economist describes Trump’s approach to trade as a “wholesale weaponisation of economic tools,” which “used to be reserved for times of war”. But this is not a new phenomenon. Over the last forty years, the reality is that the content of trade deals has been shaped by political priorities.

The political nature of trade deals mean that they affect human rights. This can take place in less direct ways; for instance, trade agreements often include requirements for governments to liberalise domestic industries, including public services. Recent research highlights how this can have a disproportionate effect on women’s rights. Similarly, consumer rights and public health can be impacted by trade agreements which increasingly include ambitions to harmonise regulations. In each of these examples, policy which would usually be designed and agreed at the state-level, subject to democratic oversight, is instead designed in the context of international trade deals.

There are also more direct ways in which trade affects human rights. Investor protection clauses in trade agreements (known as ‘ISDS’) allow multinational companies to sue governments in secretive international tribunals for passing policy which damages their profits. These controversial clauses have been criticised by human rights groups such as Amnesty International. ISDS has been used to challenge anti-discrimination legislation in South Africa, has been shown to impact on the rights of indigenous communities in Ecuador and health legislation in Australia. Furthermore, ISDS can lead to ‘regulatory chill’, where governments choose not to introduce rights legislation for fear that it will be challenged.

Ultimately, these problems stem from the fact that trade agreements are not subordinate to international human rights law. While trade agreements tend to have a high degree of enforceability, international human rights agreements, such as the UN Guiding Principles on Business and Human Rights, are difficult for states to enforce. This means that where there is a conflict, the trade interest often wins out.

In the aforementioned case, Canadian firm Bear Creek won US$18 million in compensation because Peru cancelled a mining license after the company failed to obtain informed consent from indigenous land owners, ignoring the ILO Convention 169 on indigenous peoples. US firm Chevron recently challenged Ecuador in a similar case, after domestic courts ruled that the firm’s polluting activities in the Amazon violated human rights.

The disparity between the enforceability of international human rights agreements and trade agreements has led many civil society campaigners to call for a multilateral Binding Treaty at the UN, which would empower states to prosecute multinationals which abuse human rights under the cover of trade deals. The campaign has a long way to go to win the backing of major Western economies, but offers a model for international human rights enforcement which takes trade deals seriously.

In the interim, and as the Brexit debate unfolds, human rights campaigners must take seriously the need to hold governments to account on trade policy.

David Lawrence is Senior Political Adviser at the Trade Justice Movement, which represents 70 civil society organisations campaigning for trade rules that work for people and planet. He studied MSc Political Theory at LSE and previously worked in Parliament.

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One Response to The Geopolitics of Trade Deals and How They Threaten Human Rights

  1. Newsography says:

    Great piece. I discovered your work on twitter.

    Yeah, I have observed how Canada-US were negotiating the dairy section on the USMCA and when digging deeper noticed talk of a ‘cartel’.

    Apparently there are quotas on how farmers could produce and have to follow. Sort of like OPEC!

    Thank you for the insight with the mining examples.

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