Advancing human rights through trade

Why stronger human rights monitoring is needed and how to make it work

Research paper Updated 27 May 2021 ISBN: 978 1 78413 476 1

Dr Jennifer Zerk

Associate Fellow, International Law Programme

Email Jennifer

Rosie Rowe

Consultant researcher

Political shifts, the impact of the COVID-19 pandemic, and the struggle for a shared vision of how to ‘build back better’, have reignited the debate about trade and human rights.

Although many trade agreements take human rights impacts into consideration, the monitoring systems that have emerged so far are not comprehensive. Without robust human rights monitoring, trading partners have little chance of ensuring that their counterparts are meeting their commitments.

While there are considerable structural, political and resource-related challenges to conducting more systematic and effective human rights monitoring, recent experiences in this field can help policymakers design more effective monitoring mechanisms for the future.

03 Human rights monitoring and GSP schemes

GSP human rights monitoring takes place in a legal and political context that is very different from trading relationships under FTAs – but there are still lessons that can be drawn upon to improve human rights monitoring of future trade agreements.

3.1 Background

The Generalized System of Preferences (GSP) is a trade programme, enabled by the GATT/WTO trading system, designed to promote growth in developing countries by allowing developed countries to offer non-reciprocal preferential treatment (such as zero or low duties on imports) to products originating in developing countries.71 The international legal basis for this system is an ‘enabling clause’,72 adopted in 1979, which allows derogations to WTO rules on non-discrimination (i.e. most-favoured-nation (MFN) status), meaning that preferential access can be granted to developing countries without the need to afford the same treatment to other trading partners. Thirteen trade actors – Australia, Belarus, Canada, the EU, Iceland, Japan, Kazakhstan, New Zealand, Norway, the Russian Federation, Switzerland, Turkey and the US – presently use GSP trade schemes. Two of these – the EU and the US – condition eligibility for these trade preferences, to some degree and in different ways, on compliance with human rights standards, and for this reason are the focus of this chapter.

Before delving further into EU and US practices, however, it is necessary to be clear about the various ways in which the context for human rights monitoring for the purposes of GSP schemes is different from the context in which the various monitoring activities described in Chapter 2 take place. Most obviously, the monitoring scheme, and the commitments that are monitored through it, are not negotiated between trading partners. Instead, human rights eligibility criteria are imposed as a condition of joining the scheme and thereby taking advantage of the preferential and non-reciprocal arrangements it creates. Put another way, the dynamic is one of granting or administering trade actor on the one hand, and beneficiary country on the other, rather than of parties to a jointly negotiated agreement. Moreover, the manner in which this policy tool can be used will be subject to domestic legislation and various forms of (often quite detailed) legislative and executive oversight. Finally, the unilateral nature of these programmes provides the granting or administering party with the flexibility to expand or limit the scope of the scheme (i.e. as regards beneficiary countries and/or product coverage), in line with its domestic policy objectives vis-à-vis trade and development. It also means that decisions to withdraw preferences are ultimately at the discretion of the granting country within the parameters of enabling legislation (and are not mediated or adjudicated through dispute resolution procedures), although due process considerations (such as obligations to consult with the beneficiary country about human rights related concerns, and opportunities to comment on adverse findings) will tend to be written into relevant legislation and guidance.73

3.2 Human rights monitoring under EU GSP schemes

The EU’s GSP scheme encompasses three layers of preferential arrangements: Everything But Arms (EBA) for least developed countries, allowing them tariff free and quota free access to EU markets for all products except arms and ammunition; Standard GSP (for low and lower-middle income countries); and GSP+ (a special arrangement designed to incentivize the ratification and proper implementation of key international agreements relating to sustainable development, human rights and labour standards, and good governance).

The first GSP scheme of the European Community (EC) ran from 1971 to 1981 and was subsequently renewed for a further two decades.74 From 2002 to 2005, the EC introduced several important changes to the design of the scheme by including special incentive arrangements for the protection of labour rights and the environment, and introducing the EBA initiative for the least developed countries.75 These arrangements were revised from 2006 to include GSP+, a set of special incentive arrangements designed to promote sustainable development and good governance, which ran until January 2014. From this point, the current scheme came into play under a 2012 EU Regulation with the three GSP layers – EBA, Standard GSP, and GSP+.76

Human rights conditionality is a feature of each of these three arrangements, although, as can be seen from Table 2 below, the nature of this conditionality, and the monitoring arrangements used to verify compliance with human rights-related conditions, differs from scheme to scheme (and particularly as between the monitoring used for GSP+ countries, compared to beneficiaries of standard GSP and EBA schemes).

Table 2. An overview of the EU GSP scheme layers (Standard GSP, GSP+ and EBA): human rights conditions and compliance checks⁷⁷

Scheme	Who qualifies?	Benefits	Human rights eligibility criteria	Consequences of non-compliance with human rights conditions (‘negative conditionality’)
EBA	For least developed countries	Duty-free, quota-free access for all products except arms and ammunition.	Comply with the principles laid down in core human rights and labour rights conventions listed in an annex to the 2012 EU GSP Regulation.	Possibility of ‘enhanced engagement’ (see note 1 below). Possibility of launch of withdrawal procedure (see note 2 below).
Standard GSP	Low, and lower-middle-income countries	Partial or full removal of customs duties on two-thirds of tariff lines.
GSP+	Low or lower-middle-income countries	Reduction of Standard GSP tariffs (see above) to 0% (‘positive conditionality’).	Ratify and implement 27 international conventions related to human rights, labour rights, environmental protection and good governance. (On compliance monitoring arrangements see notes 3 and 4.)	Possibility of ‘enhanced engagement’ (see note 1 below). Possibility of launch of withdrawal procedure (see note 2 below).

Scheme

Who qualifies?

Benefits

Human rights eligibility criteria

Consequences of non-compliance with human rights conditions (‘negative conditionality’)

EBA

For least developed countries

Duty-free, quota-free access for all products except arms and ammunition.

Comply with the principles laid down in core human rights and labour rights conventions listed in an annex to the 2012 EU GSP Regulation.

Possibility of ‘enhanced engagement’ (see note 1 below).

Possibility of launch of withdrawal procedure (see note 2 below).

Standard GSP

Low, and lower-middle-income countries

Partial or full removal of customs duties on two-thirds of tariff lines.

GSP+

Low or lower-middle-income countries

Reduction of Standard GSP tariffs (see above) to 0% (‘positive conditionality’).

Ratify and implement 27 international conventions related to human rights, labour rights, environmental protection and good governance. (On compliance monitoring arrangements see notes 3 and 4.)

Possibility of ‘enhanced engagement’ (see note 1 below).

Possibility of launch of withdrawal procedure (see note 2 below).

Source: Compiled by the authors.

Note 1. Failures by a beneficiary country to make sufficient progress with respect to core human rights and labour rights can lead to ‘enhanced engagement’ processes in which the beneficiary country is asked to provide concrete and sustainable solutions to serious shortcomings (see below). This special form of engagement, pioneered for the purposes of the GSP+ scheme, has since been applied also to the Standard GSP and EBA schemes.

Note 2. Procedure for withdrawing trade preferences comprises:

Initial notice by Commission;
Six-month formal monitoring and evaluation period (during which time beneficiary country can submit its own observations). Third parties may intervene at this point.
Submission of report of findings to beneficiary country, with period for comment.
Final decision.

Note 3. Acceptance into GSP+ is also subject to the beneficiary country’s agreement to:

Comply with reporting requirements and treaty monitoring arrangements for the above 27 conventions.
Cooperate with Commission, including by providing relevant information (see note 4 below).

Note 4. In order to retain the benefits of GSP+ status (‘positive conditionality’), GSP+ beneficiary countries are subject to ongoing monitoring comprising:

review of relevant country reports by ILO and UN treaty bodies.
a list of issues (formally known as scorecard system) (see further discussion below).
ongoing dialogue with relevant ministries and officials (see further discussion below), including in the form of country visits.

Box 4. The EU’s approach to compliance and performance monitoring under the GSP+ scheme

‘The philosophy of the GSP+ is that of an incentive-based mechanism. It fosters the achievement of its goals by offering the “carrot” of preferences, which it provides when the relevant conventions are ratified and effectively implemented. Thereafter, preferences are used as a lever to ensure that implementation (i) does not deteriorate and (ii) improves over time. A regular dialogue with beneficiaries provides the necessary follow-up, which includes temporary withdrawal mechanisms. This approach of progressive improvement is considered the most appropriate given that the changes that need to take place to fully implement the conventions are of a complex, structural nature and involve high economic costs. Thus, they will not happen overnight, and need to be accompanied of support over longer periods.’

European Commission (2015), The EU’s Generalised Scheme of Preferences (GSP), p. 3.

As indicated in the notes to Table 2 above, the system for monitoring the compliance of the beneficiaries of the EU’s GSP+ scheme (GSP+ countries) with the terms of membership (which, as noted above, includes ratification and implementation of a series of ‘core’ human rights treaties), is complex, ongoing and multi-layered. For the verification of the ratification itself (including the implications of any reservations) and for an assessment of the extent to which commitments made under those treaties are being properly and progressively implemented, considerable reliance is placed on the comments and reports of relevant UN treaty bodies and the International Labour Organization (ILO). From these outputs, and drawing also from relevant inputs from civil society and trade unions, the Commission creates a ‘list of issues’ for each GSP+ country in which priority issues of concern are highlighted. Some refinements may then be made to this ‘list of issues’ (formerly referred to as a ‘scorecard’, see Box 5 below) in consultation with the relevant GSP+ country, and this document then becomes the framework for a more focussed programme of ongoing dialogue to provide the Commission with a more detailed picture, both of human rights issues and challenges ‘on the ground’, and of the success (or otherwise) of the relevant country at meeting specific human rights-related goals.

Box 5. An overview of the European Commission’s approach to monitoring compliance by GSP+ countries with human rights eligibility criteria

‘Once a country is granted GSP+ [status], the Commission and the European External Action Service (EEAS) must, therefore, monitor that it abides by its commitments, namely to:

maintain ratification of the international conventions covered by GSP+;
ensure their effective implementation;
comply with reporting requirements;
accept regular monitoring in accordance with the conventions; and
cooperate with the Commission and provide all necessary information.

In order to meet its monitoring responsibility, the Commission prepares a List of Issues (“scorecard”) for each GSP+ beneficiary, which serves to measure the GSP+ countries’ compliance with the abovementioned commitments. Beneficiaries receive their individual scorecard upon GSP+ entry or immediately thereafter.

The scorecard is a clearly structured document highlighting salient shortcomings which should be addressed by the beneficiary in order to effectively implement the conventions. The basic elements of the list of issues are the shortcomings identified by the monitoring bodies of the relevant core international conventions and which are set out by the Commission in its assessment of the GSP+ entry applications.

The entry assessment thus constitutes a first ‘snapshot’ of a beneficiary’s situation; scorecards then build on this analysis with a view to further identifying the issues that beneficiaries will be expected to address. Naturally, all lists of issues look different reflecting each beneficiary’s performance under the various conventions.’

European Commission (2019), ‘European Union’s GSP+ scheme’, fact sheet, https://trade.ec.europa.eu/doclib/docs/2017/january/tradoc_155235.pdf.

The activities that comprise the ‘ongoing dialogue’ part of the monitoring can take a range of different forms, depending on need and the issues at hand, but will typically include meetings, evaluation exercises, self-assessments, and (prior to the COVID-19 pandemic) country visits and a range of in-country stakeholder consultation exercises (potentially involving representatives of international organizations, civil society organizations, trade unions and industry).

The Commission’s reflections on the progress and achievements of GSP beneficiary countries as regards human rights issues, as well as any areas of concern, are communicated to the European Parliament and Council in the form of a biennial report.78 As well as the economic effects of the various GSP schemes (including GSP+), these reports also set out specific legislative and policy initiatives that have been undertaken within the relevant jurisdictions during the reporting period, as well as comments about issues and trends (including on a regional basis) of particular concern. For instance, the most recent (2020) report singles out for special mention concerns about shrinking civic space, political shifts in favour of increased use of the death penalty, failures to effectively tackle child labour and environmental concerns.79

Countries that appear unwilling to address and engage on areas where there are human rights concerns are subjected to ‘enhanced engagement’. The most recent Commission report on GSP+ implementation flags enhanced engagement processes for Bangladesh, Cambodia and Myanmar ‘to press for concrete actions on and sustainable solutions to serious shortcomings in respecting fundamental human and labour rights’.80 Enhanced engagement may lead to the development of agreed action plans (including targets and timelines) with respect to specific issues.81 As noted in Table 2 above, a lack of results through these processes may lead to the withdrawal of tariff preferences.82 In February 2020, the European Commission announced its decision to withdraw some of the tariff preferences granted to Cambodia under the European Union’s EBA trade scheme due to ‘serious and systematic violations of the human rights principles enshrined in the International Covenant on Civil and Political Rights’.83

The EU GSP+ ‘positive conditionality’ monitoring system is widely recognized and generally admired for its level of ambition, in terms of the proactivity with which human rights issues are identified and followed up, the measured and ‘graduated’ approach to problems of poor or non-compliance, as well as for the wide scope of human rights issues that it seeks to cover. However, concerns have been raised, too, about the lack of transparency around the process used to formulate the list of key issues that are to be monitored through the ‘list of issues’ system, and the benchmarks that are used to determine whether specific goals or targets have been met. From civil society organizations and trade unions in particular comes the criticism that the lack of transparency around process and benchmarking makes it difficult for them to engage effectively.84

The renewal of the legislative framework for the EU’s GSP scheme in 2023 provides an opportunity for further consultation and reflection on the strengths and weaknesses of the current monitoring systems, and the extent to which there may be scope for improvement. In a resolution on the implementation of the EU GSP regulation passed on 14 March 2019, the European Parliament makes a number of comments as to ways that monitoring of sustainability development, human rights and governance issues could be improved, including ‘by stepping up cooperation between all actors so as to improve information gathering and in-depth analysis by using all the available information and resources, such as the reports from international monitoring bodies, including the UN, the ILO, the Organisation for Economic Cooperation and Development (OECD), and including direct involvement of civil society and social partners in the process’,85 stressing that ‘this is necessary in order to ensure the full potential of the GSP+ scheme to improve the situation with regard to workers’ rights, promotion of gender equality and the abolition of child and forced labour through the effective implementation of the 27 conventions’.86 The Parliament goes on to request the Commission ‘to explore further options for the structured, formal and independent participation of civil society, trade union representatives and the private sector, which could serve as potential avenues to strengthen the monitoring process’.87

An interim report published in November 2020 as part of ongoing efforts to assess the impact of the current EU GSP regulation (which will be fed into discussions about possible improvements when the regime is renewed)88 considers a number of potential options for strengthening current arrangements, including the possibility of a stricter admittance procedure, measures to improve transparency and inclusiveness, more rigorous benchmarking of progress, the possibility of a new ‘intermediary’ body to coordinate expert input from civil society organizations and unions, and a possible new ‘complaints’ mechanism. However, the same report also notes a number of difficult policy trade-offs associated with some options (for instance as between the need for transparency and the need for a relationship of trust and candour between the EU and beneficiary countries under its GSP scheme, especially given the political sensitivities surrounding some of the issues involved), a theme that is taken up further in Chapter 4 below. In the meantime, the very recently unveiled initiative of the newly appointed EU chief trade enforcement officer to create a ‘single entry point’ through which EU companies, trade organizations or non-governmental organizations can submit complaints89 (including about the extent to which beneficiaries of trade preferences under GSP schemes may not be living up to human rights-related conditions and commitments) will be interesting to watch.

3.3 Human rights monitoring under the US GSP scheme

The US GSP programme presently comprises a GSP and three regional programmes designed to help advance specific US foreign policy objectives (and covering additional products not covered by the GSP scheme); the Caribbean Basin Initiative (CBI), the Nepal Trade Preference Program (NTPP) and the African Growth and Opportunity Act (AGOA) programme. A number of different US agencies – including the Office of the US Trade Representative (USTR), the US International Trade Commission and the US departments of commerce, labor, state and treasury – play a part in administering or implementing various aspects of the scheme. An interagency mechanism known as the ‘Trade Policy Staff Committee’ is used to coordinate monitoring efforts.90 While reporting requirements vary from programme to programme, the legislative arrangements for the GSP scheme require annual reports to Congress about the status of international worker rights in each beneficiary country, including the secretary of labor’s findings as to the extent to which each beneficiary country has implemented commitments relating to the elimination of the worst forms of child labour.91 To this end, the following reports are prepared on an annual basis:

An annual report on GSP (USTR), which includes, in addition to outcomes of annual reviews of product eligibility, a review of the country’s observance of international standards as regards worker rights, with particular focus on issues that have been raised through petitions, see further below;92
Country reports on human rights practices (State Department); and
Findings on the worst forms of child labour (Department of Labor).

The US GSP scheme differs from the EU GSP scheme (see section 3.2 above) in a number of important respects. The US GSP scheme is often described as being less ‘progressive’ than its EU counterpart on the basis that it covers a narrower range of human rights, with the advancement and protection of labour rights being the primary focus. Under the US GSP scheme,93 beneficiary country status is conditional on being able to show (among other things)94 that the country has taken or is taking steps to protect internationally recognized worker rights (see Box 6 below).95 A further criterion is that the beneficiary country ‘implements its commitments to eliminate the worst forms of child labour’.96 Two of the regional schemes (AGOA and NTPP) include an additional eligibility criterion that the president must have made a determination that the beneficiary country does not engage in gross violations of internationally recognized human rights, and there are additional reporting requirements relating to that criterion in particular.

Box 6. Internationally recognized worker rights covered by the US GSP scheme

the right of association;
the right to organize and bargain collectively;
no use of any form of forced or compulsory labour;
a minimum age for the employment of children, and prohibitions on the worst forms of child labour; and
acceptable conditions of work with respect to minimum wages, hours of work and occupational safety and health.

To maintain their status under the US GSP system, GSP beneficiary countries are required to continue to show progress as regards protection of these ‘core’ labour rights. However, the US GSP monitoring system does not include the same kinds of proactive ‘positive conditionality’ monitoring techniques that are used for the EU’s GSP+ system (see section 3.2 above), US policymakers having favoured a more complaints-based approach for highlighting potential non-compliance to eligibility criteria. While the US trade representative has the power to launch eligibility reviews on its own initiative, in practice these reviews tend to be initiated following a petition by interested parties concerned about labour rights compliance in a beneficiary country, such as a civil society organization or a trade union (see Box 3 above).97

On the other hand, the arguably greater degree of transparency surrounding the US GSP monitoring system – demonstrated by more frequent reporting, against clear worker rights and child labour criteria, and with the complaints mechanism providing a clear and well-established means of engagement for interested stakeholders – is often cited as an area where the US GSP monitoring system may provide a better model. Moreover, while there is not yet any clear indication that the new US administration may be considering expanding the scope of human rights eligibility criteria, a shift towards a more proactive system of monitoring was signalled by the USTR’s October 2017 announcement of a new ‘triennial assessment process’ to ensure that all beneficiary countries fulfil the eligibility criteria.98 This process began with Asian countries in the first year, the intention being to roll the review process to other regions in later years.99 As a result, more recent USTR annual reports to Congress (see above) have begun to include more discussion of the outcomes of self-initiated country practice review processes, in addition to the outcomes of the petition processes mentioned above.100

3.4 Some reflections on experiences with human rights monitoring in the context of GSP schemes

The non-reciprocal nature of GSP schemes makes it possible to attach trade-related incentives to compliance with a wide range of different human rights.101 Moreover, the fact that these schemes are unilaterally applied, rather than negotiated between trading partners, can give the granting party (depending on the value of these preferential arrangements to different sectors of beneficiary countries’ economies) significant leverage through which it can advance different human rights-related aspects of its external and foreign policy objectives. Attaching specific benefits to specific product lines allows for the possibility of quite targeted use of both positive and negative conditionality, creating opportunities for initiatives directed at addressing human rights problems at a sector level (as well as at a country level) and thus making GSP schemes a potentially less ‘blunt instrument’ for advancing human rights objectives than free-trade agreements.102

Might there be elements of monitoring methodologies developed for the purposes of GSP schemes that could be applied to other kinds of trading relationships? The question is not just an academic one. In addition to the potential advantages from the perspective of efficiency and opportunities for knowledge sharing, there is also the possibility that greater convergence of approaches might help to smooth the transition as countries pass from GSP schemes to trading under negotiated FTAs. However, some caution is necessary. Firstly, the political and legal context, against which human rights monitoring takes place, is somewhat different for GSP schemes than for FTAs.103 Secondly, it is important to recognize that there are a range of motivations for human rights monitoring of trade agreements, which will have a bearing on the kinds of arrangements that will be most realistic and effective in any given context.104 Nevertheless, there are some lessons that can potentially be gleaned from experiences with GSP scheme monitoring that may be relevant to human rights monitoring of other types of trading relationships.

An important lesson that can be taken from human rights monitoring in the GSP context is the way that different methodologies and approaches can be combined in ways that allow them, if done well, to become more than the sum of their parts. For instance, although a review of a country’s ratification records and the comments of international treaty monitoring bodies may provide a reasonable starting point for researching a trading partner’s commitment to different human rights issues, it is recognized implicitly in the way that the EU’s approach to GSP+ monitoring is constructed, that, in order to obtain a realistic view of the quality of implementation of these standards at domestic level (including the human rights conditions in which specific goods traded under the agreement have been produced or manufactured), more of a ‘deep dive’ is needed. For the purposes of in-country work, local ministries, officials and domestic regulatory bodies with human rights-related mandates are potentially vital sources of information. Monitoring practitioners will be on particular lookout for agencies that regularly gather data on issues coming within the purview of human rights monitoring activities, such as on employment trends (including the informal economy), wages and cost of living, health and life expectancy, gender inequality, agricultural production or land use. Local agencies are also likely to be best placed to provide the contextualization needed, for instance, for a proper understanding of sources of inequalities in the way that positive and negative economic effects of trade are distributed (e.g. between regions, or between people of different ethnic background, or between genders).

A further takeaway concerns the potential human rights benefit of more graduated, and potentially more cooperative, responses to resolving human rights compliance problems. These may be tailored to the particular circumstances at hand as an alternative to more prescriptive, possibly confrontational procedures, which may have the effect of worsening human rights outcomes. The European Commission credits the success and impact of its GSP+ scheme, in large part, to this approach.105 Relatedly, a more consultative and cooperative approach is also potentially helpful in addressing concerns (expressed by governments of developing countries in particular)106 that human rights standards – whether as part of GSP eligibility criteria or as part of the mutual commitments made between the parties to a trade agreement – might be used to further narrow protectionist or political aims. Although it would be naïve to overlook the presence of potential protectionist and political agendas in the way that human rights criteria or commitments are framed,107 a more cooperative and consultative approach can provide the relevant trading actors with the space and flexibility needed to properly analyse the options for course of action likely to yield the best outcomes in human rights terms (see the case study in Box 7 below for an example of the conflicting considerations that can arise). As noted above, the unilateral nature of GSP schemes would seem to provide trade actors with greater flexibility to achieve this effect in the GSP context than in the context of a trade agreement, although it must be acknowledged that there are already elements of these approaches in the way that ‘trade and sustainable development’ chapters of EU trade agreements have been constructed.

On the other hand, as will be discussed in more detail in the next chapter, the lack of enforceability of commitments in ‘trade and sustainable development’ chapters of trade agreements, and the limited human rights content of those chapters, are key factors in the present lack of ‘teeth’, influence and direction of the consultative bodies established under those chapters with respect to the monitoring of human rights risks and compliance issues relevant to a trading relationship. As we will see, the tensions that exist between the need for legal certainty versus the need for flexibility, or the need for transparency versus the need to provide an environment to enable politically sensitive and challenging discussions to take place at all, are just two of many dilemmas that trade actors seeking to improve their human rights monitoring systems might be confronted with. The aim of the next chapter is to analyse these dilemmas from a human rights perspective, in order to ascertain the extent to which there might be scope for improvement of human rights monitoring in the trade context.

Box 7. Balancing different human rights needs: the EU’s decision to partially withdraw Cambodia’s preferential access to the EU market against the background of the COVID-19 pandemic

In February 2020, the European Commission announced its decision to withdraw part of the tariff preferences granted to Cambodia under the European Union’s EBA trade scheme due to ‘serious and systematic violations of the human rights principles enshrined in the International Covenant on Civil and Political Rights’.108 The Commission further announced that the decision, affecting selected garment and footwear products and all travel goods and sugar, would take effect (unless objected to by the European Parliament or the European Council) on 12 August 2020.

The EU High Representative for Foreign Affairs and Security Policy (and Vice-President of the European Commission) Joseph Borrell explained the decision as being necessary in light of ‘[t]he duration, scale and impact of Cambodia’s violations of the rights to political participation and to the freedoms of expression and association’ adding that ‘[t]he European Union will not stand and watch as democracy is eroded, human rights curtailed, and free debate silenced… For the trade preferences to be reinstated, the Cambodian authorities need to take the necessary measures.’109 Commissioner for Trade Phil Hogan further commented ‘[t]he European Union is committed to supporting Cambodia’s economic and social development through trade preferences. However, the respect for human rights is non-negotiable for us. We recognise the progress Cambodia has made, but serious concerns remain. Our aim is that the Cambodian authorities end human rights violations, and we will continue working with them in order to achieve that.’110

The move has been broadly welcomed by EU-based civil society organizations and international trade unions. ITUC General Secretary Sharon Burrow responded that ‘[t]he Cambodian government is fully responsible for the withdrawal of benefits, and we regret its lack of commitment to Cambodia’s working people. The government and companies doing business in the country must finally listen to the concerns of workers and act to ensure that freedom of association and the right to collective bargaining are fully respected. The trade benefits should only be restored once the government changes its course on democracy and labour rights.’111 However, Cambodian affiliates of the global union IndustriAll have expressed concerns about the economic damage and unemployment that could result, arguing in a letter to EU Trade Commissioner Cecilia Malmstrom that the risks of severe economic hardship and unemployment to rural women working in garment factories were particularly great.112

Since the decision was taken further representations have been made by EU-based clothing retailers urging the Commission to postpone implementation of the decision in light of the likely economic fallout from the COVID-19 pandemic. In a letter to the European Commission President Ursula von der Leyen, the European Branded Clothing Alliance argues that the COVID-19 pandemic had ‘created challenges unprecedented in our globalised world’ and calls on the European Commission to ‘postpone the withdrawal of the EBA status of Cambodia because of the exceptional circumstances and already severely impacted global industry.’113

For a general history of the development of GSP schemes within the international trading system, see Kennedy, K. C. (2011), ‘The Generalized System of Preferences after Four Decades: Conditionality and the Shrinking Margin of Preference’, Michigan State International Law Review, 20(3): pp. 521–668, https://ssrn.com/abstract=1933756; UNCTAD (n.d.). ‘GSP – Handbooks’, https://unctad.org/publications-search?f[0]=product%3A498; UNCTAD (2015), Generalized System of Preferences: Handbook on the scheme of the European Union, New York and Geneva: United Nations, https://unctad.org/system/files/official-document/itcdtsbmisc25rev4_en.pdf; European Commission (2015), The EU’s Generalised Scheme of Preferences (GSP), August 2015, https://trade.ec.europa.eu/doclib/docs/2015/august/tradoc_153732.pdf.

Decision on differential and more favourable treatment reciprocity and fuller participation of developing countries of 28 November 1979 (L/4903). See: https://www.wto.org/English/docs_e/legal_e/enabling1979_e.htm.

It is important to acknowledge, however, that due process safeguards of this kind are rarely sufficient to overcome a number of broader criticisms that can legitimately be made about the way that GSP schemes can operate in practice, such as a lack of even-handedness by administering countries in their approach to monitoring and suspension of benefits depending on the political and economic interests at stake, and the overtones of paternalism and coloniality. The scope and inclination of an administering country to respond to non-compliance by a beneficiary country with human rights-related eligibility criteria, and the practical impact such action might have, will also differ depending on the coverage of the scheme (i.e. in terms of tariff lines), and these can vary significantly from country to country and from scheme to scheme. A further criticism, highlighted below (see esp. Box 7), concerns the possibility (perhaps even likelihood) that a decision to withdraw preferences could actually exacerbate human rights harms in beneficiary countries (and certainly in the short term), for instance where mass lay-offs of factory workers force vulnerable workers into poverty or even more dangerous working situations.

UNCTAD (2015), Generalized System of Preferences: Handbook on the scheme of the European Union.

Ibid.

EU (2012), ‘Official Journal of the European Union, L 303, 31 October 2012’, Regulation (EU) No 978/2012 of the European Parliament and of the Council of 25 October 2012: Applying a Scheme of Generalised Tariff Preferences and Repealing Council Regulation (EC) No 732/2008, [2012] OJ L 303/1: pp. 1–82, https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=OJ:L:2012:303:TOC.

Ibid.

For the most recent report, see European Commission (2020), ‘Joint Report to the European Parliament and the Council: Report on the Generalised Scheme of Preferences covering the period 2018-2019’, 10 February 2020, https://trade.ec.europa.eu/doclib/docs/2018/january/tradoc_156536.pdf.

Ibid.

Ibid., p. 2.

As has been the case with Bangladesh in relation to improvement of labour rights protection. Ibid., p. 3.

See EU (2012), ‘Regulation (EU) No 978/2012 [2012] OJ L303/1, Article 24’, https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32012R0978&from=EN. Such action has recently been taken with respect to Cambodia, see European Commission (2020), ‘Joint Report to the European Parliament and the Council: Report on the Generalised Scheme of Preferences covering the period 2018-2019’, p. 3. Cambodia’s tariff preferences under the European Union’s EBA trade scheme were partially withdrawn in February 2020 due to the ‘duration, scale and impact of Cambodia’s violations of the rights to political participation and to the freedoms of expression and association’.

See European Commission (2020), ‘Trade/Human Rights: Commission decides to partially withdraw Cambodia’s preferential access to the EU market’, press release, 12 February 2020, https://ec.europa.eu/commission/presscorner/detail/en/ip_20_229.

See GSP Platform (2016), ‘Scrutinising the new GSP+ mechanism after two years: Will it deliver on human and labour rights?’, factsheet, https://justiceandpeace.nl/wp-content/uploads/2020/01/Factsheet-GSP-after-two-years.pdf.

European Parliament (2019), ‘Implementation of the Generalised Scheme Preferences (GSP) Regulation (EU) No 978/2012’, European Parliament Resolution, 14 March 2019, para. 9, https://www.europarl.europa.eu/doceo/document/TA-8-2019-0207_EN.pdf.

Ibid.

Ibid., para. 10.

See BKP Economic Advisors (2020), Study in support of an impact assessment to prepare the review of GSP Regulation No 978/2012: Inception Report, European Commission, 18 May 2020. https://trade.ec.europa.eu/doclib/docs/2020/april/tradoc_158710.pdf.

European Commission (n.d.), ‘Chief Trade Enforcement Officer’, https://ec.europa.eu/trade/trade-policy-and-you/contacts/chief-trade-enforcement-officer.

See US Government Accountability Office (2020), ‘International Trade: Observations on whether women’s rights and economic interests are protected or promoted by U.S. Trade Preference Programs’, 9 December 2020, p. 10, https://www.gao.gov/products/GAO-21-190.

Ibid., pp. 8–9 provides a useful summary of the present reporting requirements.

See Congressional Research Service (2021), ‘Generalized System of Preferences (GSP): Overview and Issues for Congress’, updated 7 January 2021, pp. 14–15, https://fas.org/sgp/crs/misc/RL33663.pdf.

19 U.S. Code Section 2462(b)(2), https://www.govinfo.gov/content/pkg/USCODE-2011-title19/pdf/USCODE-2011-title19-chap12-subchapV-sec2462.pdf.

Ibid., e.g. Not being a ‘communist country’ or ‘dominated or controlled by international communism’, 19 US. Code Section 2462 (B)(2)(A)(iii), https://www.govinfo.gov/content/pkg/USCODE-2011-title19/pdf/USCODE-2011-title19-chap12-subchapV-sec2462.pdf.

19 U.S. Code Section 2467, https://www.govinfo.gov/content/pkg/USCODE-2011-title19/pdf/USCODE-2011-title19-chap12-subchapV-sec2467.pdf.

Ibid., (G) and (H).

‘According to the publicly available information on USTR’s website, until recently [i.e. June 2017], the U.S. government had not self-initiated an eligibility review of any country for at least ten years.’ See International Corporate Accountability Roundtable (ICAR) (2018), ‘Tools of Trade: The Use of U.S. Generalized System of Preferences to Promote Labor Rights for All’, February 2018, p. 10, https://static1.squarespace.com/static/583f3fca725e25fcd45aa446/t/5a723ff1ec212d3d586635d9/1517436916673/ICAR+GSP+Report+FINAL.pdf.

Office of the US Trade Representative (2017), ‘USTR Announces New Trade Preference Enforcement Effort’, press release, https://ustr.gov/about-us/policy-offices/press-office/press-releases/2017/june/ustr-announces-new-trade-preference.

ICAR (2018), ‘Tools of Trade’, p. 11.

See Congressional Research Service (2021), ‘Generalized System of Preferences (GSP): Overview and Issues for Congress’, p. 22, https://fas.org/sgp/crs/misc/RL33663.pdf.

See Borchert, I., Conconi, P., Di Ubaldo, M. and Herchelegiu, C. (2020), The Pursuit of Non-Trade Policy Objectives in EU Trade Policy, EUI Working Papers, RSCAC, 2020/26 Global Governance Programme-391 [Global Economics], pp. 11–18, and pp. 23–29, https://cadmus.eui.eu/handle/1814/66882.

Ibid., pp. 18–23.

Zerk (2019), Human Rights Impact Assessment of Trade Agreements, p. 12.

See section 1.3 above.

European Commission (2020), ‘Joint Report to the European Parliament and The Council: Report on the Generalised Scheme of Preferences covering the period 2018-2019’.

Velluti (2016), ‘The Promotion and Integration of Human Rights in EU External Trade Relations’, pp. 53 and 59.

Harrison et al. (2019), ‘Labour Standards Provisions in EU Free Trade Agreements’, p. 655; Gammage (2018), ‘A critique of the extraterritorial obligations of the EU’, p. 9.

European Commission (2020), ‘Commission decides to partially withdraw Cambodia’s preferential access to the EU market’.

Ibid.

International Trade Union Confederation (2020), ‘The European Trade Union Confederation (ETUC) and the International Trade Union Confederation (ITUC) welcomes lifting of EU trade benefits to Cambodia’, press release, 12 February 2020, https://www.ituc-csi.org/EU-stops-EBA-trade-benefits-Cambodia. See also Fair Wear Foundation, Clean Clothes Campaign, Ethical Trading Initiative et al. (2020), ‘International community urges Cambodian government to take action’, joint statement, 14 February 2020, https://www.fairwear.org/stories/statement-international-community-urges-cambodian-government-to-take-action.

Thul, P. C. (2019), ‘Cambodia businesses, unions ask EU not to impose trade sanctions’, Reuters, 21 January 2019, https://www.reuters.com/article/us-eu-trade-cambodia/cambodia-businesses-unions-ask-eu-not-to-impose-trade-sanctions-idUSKCN1PF1JI.

European Branded Clothing Alliance (2020), ‘EBCA request for relief measures related to COVID-19 crisis’, 30 March 2020, https://www.ebca-europe.org/files/userdata/news_upload/EBCA%20COVID-19%20Request%20von%20der%20Leyen.pdf.

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Advancing human rights through trade

Dr Jennifer Zerk

Rosie Rowe

03 Human rights monitoring and GSP schemes

3.1 Background

3.2 Human rights monitoring under EU GSP schemes

Table 2. An overview of the EU GSP scheme layers (Standard GSP, GSP+ and EBA): human rights conditions and compliance checks⁷⁷

Box 4. The EU’s approach to compliance and performance monitoring under the GSP+ scheme

Box 5. An overview of the European Commission’s approach to monitoring compliance by GSP+ countries with human rights eligibility criteria

3.3 Human rights monitoring under the US GSP scheme

Box 6. Internationally recognized worker rights covered by the US GSP scheme

3.4 Some reflections on experiences with human rights monitoring in the context of GSP schemes

Box 7. Balancing different human rights needs: the EU’s decision to partially withdraw Cambodia’s preferential access to the EU market against the background of the COVID-19 pandemic

Advancing human rights through trade

Rosie Rowe

03 Human rights monitoring and GSP schemes

3.1 Background

3.2 Human rights monitoring under EU GSP schemes

Table 2. An overview of the EU GSP scheme layers (Standard GSP, GSP+ and EBA): human rights conditions and compliance checks77

Box 4. The EU’s approach to compliance and performance monitoring under the GSP+ scheme

Box 5. An overview of the European Commission’s approach to monitoring compliance by GSP+ countries with human rights eligibility criteria

3.3 Human rights monitoring under the US GSP scheme

Box 6. Internationally recognized worker rights covered by the US GSP scheme

3.4 Some reflections on experiences with human rights monitoring in the context of GSP schemes

Box 7. Balancing different human rights needs: the EU’s decision to partially withdraw Cambodia’s preferential access to the EU market against the background of the COVID-19 pandemic

Table 2. An overview of the EU GSP scheme layers (Standard GSP, GSP+ and EBA): human rights conditions and compliance checks⁷⁷