The EU’s Free Trade Agreement: can the moral dilemma be easily solved?

The beginning of this month marked an EU free trade agreement with Colombia and Peru to liberalise trade in the agricultural, manufacturing and fisheries industries. This is the first of what is predicted to be several deals with South American nations.

Free trade has always been vociferously supported by neo-liberal, free-market capitalists, and the European Parliament is now more able to initiate and consolidate these trade agreements. This illustrates a notable dedication to reinforcing trade ties between the EU and developing economies.

It is speculated that the trade agreement could be worth €250million (nearly £215,000,000) for the next ten years, but it has met with its fair share of opposition. The European Parliament and workers unions have expressed concern over whether increased trade with Colombia and Peru contravenes one of the EU’s chief principles: defending human rights. The debate focuses on the issue of the rights and working conditions of workers in Colombia and Peru; like the rest of Latin America, the situation is a far cry from the relatively comfortable conditions of European workers. Moreover, trade unionists have been targeted by right-wing groups in Colombia and murdered in recent years. According to the ITUC (International Trade Unions Confederation) 89 trade unionists were murdered between 2007 and 2009.

There has been an even angrier response from Human Rights groups, who claim that this free trade agreement is an example of the EU’s preference of economic liberalisation over human rights. Conversely, the EU’s perspective is that this trade agreement will further the spread of human rights and that this principle is incorporated in the agreement; additionally, the consequences regarding human rights were discussed in the European Parliament and a supervisory group was established to oversee the observance of labour rights. Columbia and Peru already have laws respecting human rights, and this issue is one that is not going to subside immediately by any means.

Despite its claims, the EU’s new legislation might not be the best vehicle for affecting real change for workers in South America. By ratifying this treaty, employers might gain an incentive to include clear and unambiguous labour rights in their modus operandi.

Luxury goods are being traded more extensively and more often than ever before, and the consequent high margins are an encouraging aspect of increased trade. Colombian and Peruvian manufacturers might take solace in this when considering the conditions of their workers.  Furthermore, it represents an active effort by the EU to concentrate on the humanitarian side of trade agreements; consider that trade-dumping (the exporting of commodities to developed economies at prices equal to or lower than within the domestic market) is not as prevalent as it once was. However, it is not simply a change in economic perspective that will make a difference, and the problem of workers’ conditions is not automatically solved.

Free trade and trade liberalisation might not increase overall investment by the amount required to address all the social injustices of countries such as Peru or Colombia. It is undeniable that it will benefit wealthier countries and those who manage Colombian and Peruvian industries. On the other hand, it will also mean that Peru and Colombia will trade with Europe far more than their neighbours. The only proviso for the EU is that it will need to make human rights and working conditions in these countries the highest of priorities if it is to retain moral integrity.

Finally, the EU needs to make sure that prospective investors and European companies perceive their actions as responsible and more proactive than the national governments in South America are likely to be. Considering the legislative stagnation in these countries, the EU’s incentivisation in the form of trade could prove a more reliable platform for positive change. Critics may argue that this progress of human rights is a drop in the ocean, but it would be unwise to ostracise countries such as Colombia and Peru.

The answer could be in increasing the scrutiny of Peru and Colombia’s commercial activities, as well as providing them with both the tools and incentives to change the methods of operation in a way that is precisely in line with the EU’s stance on human rights. What is clear is that there seems to now be an open dialogue surrounding the issue of human rights in this area of the world, which will hopefully lead to positive development for the unions and workers of Peru and Colombia.

By Rohan Pai

Tags: , , , ,

Categories: International politics

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