Animal Welfare, Trade and Sustainable Development by Eurogroup for Animals

ANIMAL WELFARE, TRADE AND SUSTAINABLE DEVELOPMENT

Eurogroup for Animalsâ&#x20AC;&#x2122; response to the European Commission proposals on Trade & Sustainable Development chapters in Free Trade Agreement.

Eurogroup for Animals Rue Ducale 29 â&#x20AC;&#x201C; 1000 Brussels Tel: +32 (0)2 740 08 20 â&#x20AC;&#x201C; Fax: +32 (0)2 740 08 29 Email: s.ghislain@eurogroupforanimals.org Website: www.eurogroupforanimals.org/trade-and-animal-welfare Follow on Twitter @TradeEG4A and like on Facebook Trade & Animal Welfare Project, Eurogroup for Animals 2018

TABLE OF CONTENTS Executive Summary...............................................................................................................................................................................................4

1 Introduction.....................................................................................................................................................................................................7 2 The link between sustainability and animal welfare............................................................................................................................8 2.1 Animal welfare and food security...................................................................................................................................................... 10 2.2 Animal welfare and climate change.................................................................................................................................................. 10 2.3 Animal welfare and antimicrobial resistance.................................................................................................................................. 11 2.4 Animal welfare and conservation...................................................................................................................................................... 11 2.5 Animal welfare and the social dimensions of sustainable development................................................................................. 12

3 Towards stronger enforcement of TSD chapters................................................................................................................................ 13 3.1 ECJ Opinion 2/15 and conditionality of TSD.................................................................................................................................... 13 3.2 ECâ&#x20AC;&#x2122;s proposals on better enforcement of TSD chapters................................................................................................................ 17

4 Conclusions................................................................................................................................................................................................... 22

This report is published by Stephanie Ghislain, Trade & Animal Welfare Project Leader, Eurogroup for Animals, and Iyan Offor, Associated PhD Researcher, Eurogroup for Animals. Eurogroup for Animals represents 63 animal advocacy organisations in 24 EU Member States, the USA, Australia, Serbia, Switzerland and Norway. Since its inception in 1980, the organisation has succeeded in encouraging the EU to adopt higher legal standards for animal protection. Eurogroup for Animals reflects public opinion through its membership organisationsâ&#x20AC;&#x2122; affiliations across the Union, and has both the scientific and technical expertise to provide authoritative advice on issues relating to animal welfare. The Trade & Animal Welfare Project is made possible by:

EXECUTIVE SUMMARY This report presents Eurogroup for Animalsâ&#x20AC;&#x2122; position on the Trade and Sustainable Development (TSD) chapters contained in EU Free Trade Agreements (FTAs), and their enforcement mechanisms. It reacts to the fifteen proposals published in February 2018 by EUâ&#x20AC;&#x2122;s Directorate-General for Trade (DG Trade), following a non-official consultation with Member States, the European Parliament and Civil Society Organisations started in July 2017. The first section calls on the EU to recognise the strong link existing between animal welfare and sustainable development, and therefore for TSD chapters to explicitly include animal welfare. Current TSD chapters only cover animal conservation and do not address the interlinkage between sustainable development, intensive farming practices and farm animal welfare. Nor do they consider the contribution of working animals to the sustainable development of poorer populations. Several Sustainable 4

ANIMAL WELFARE, TRADE AND SUSTAINABLE DEVELOPMENT

Development Goals are directly connected to or cannot be reached without addressing animal welfare related issues (SDG 2 on hunger, SDG 3 on health, SDG 13 on climate, SDG 14 on fisheries and SDG 15 on biodiversity). The second section discusses enforcement of the TSD chapters. It presents our vision for effective provisions on sustainable development, as well as reacts to the fifteen proposals made by DG Trade in February 2018. The section first addresses the European Court of Justiceâ&#x20AC;&#x2122;s Opinion 2/15 on the EU-Singapore FTA, which establishes the conditionality of sustainable development clauses, and thus the existence of sanctions in TSD chapters. Then, we present our vision for a more effective enforcement of these chapters: the complaint mechanism should be open to individuals, Member States, and civil society organisations; provisions in the chapter should use a more proactive and straightforward language; the monitoring power of civil Eurogroup for Animals

society organisations through domestic advisory groups should be strengthened; cooperation mechanisms should be based on detailed scorecards to better assess progress on specific issues; technical assistance should be increased to foster progress on the ground; and finally, last resort sanctions should be included. The EU must build upon its experience with TSD chapters to guarantee they deliver concrete results and that EU trade policy respects the objective of sustainable development, as enshrined in WTO agreements. By expanding the coverage of its TSD chapters and by strengthening their enforcement mechanisms with last-resort sanctions, the EU can achieve these objectives. Its huge market position can be used as a leverage to promote sustainable development, including better welfare and protection for all animals on this planet.

ANIMAL WELFARE, TRADE AND SUSTAINABLE DEVELOPMENT

INTRODUCTION

In February 2018, the European Commission published fifteen proposals to improve the enforcement of Trade and Sustainable Development (TSD) Chapters in EU Free Trade Agreements (FTAs).1 In this report, Eurogroup for Animals will comment on these proposals and further develop arguments supporting the inclusion of animal welfare in the scope of TSD chapters. The Commission’s proposals are based on a non-official consultation started with Member States and Civil Society Organisations after the publication, in July 2017, of a first ‘non-paper’ on ‘Trade and Sustainable Development (TSD) chapters in EU Free Trade Agreements (FTAs)’.2 In its initial contribution to this debate,3 Eurogroup for Animals argued both for a widening of the scope of existing TSD chapters, and for the reinforcement of their enforcement mechanisms with the inclusion of last resort sanctions. Introduced for the first time seven years ago in the EUKorea FTA, the provisions on sustainable development have since then been at the heart of EU’s trade policy, especially since the publication of the ‘Trade for All’ strategy. The enforcement mechanism contained in the chapters has however never been triggered, despite clear violations of commitments made on labour and environmental standards occurring in certain partner countries. The debate on the impact and enforcement of TSD Chapters is thus welcomed by Eurogroup for Animals; it is unfortunately progressing very slowly and in the meantime, new trade agreements are concluded at a fast pace.

European Commission, Feedback and way forward on improving the implementation and enforcement of Trade and Sustainable Development chapters in EU Free Trade Agreements, 26 February 2018, https://bit.ly/2FuA7kz

European Commission, Non-paper on Trade and Sustainable Development (TSD) chapters in EU Free Trade Agreements (FTAs), 11 July 2017, https://bit.ly/2uNvYEq

Eurogroup for Animals, Animal Welfare, Trade, and Sustainable Development, October 2017, https://bit.ly/2IZOGmh

Eurogroup for Animals

The usual argument made by DG Trade is that while trade can contribute to promoting our values it cannot solve all problems in the world. Most NGOs, including Eurogroup for Animals, do agree with this statement. However, trade has an impact on animals, on the environment and on labour conditions, and it should not aggravate existing situations by increasing animal suffering, illegal wildlife trafficking or biodiversity losses. In 1995, the EU fought for the respect of the objective of sustainable development to be included in the preamble of the WTO agreement. Today it needs to prove that sustainable development is still its main objective, and that trade is a means through which to achieve it, that rather than an objective in itself. Before reacting to the EC’s fifteen proposals, we will first focus on two key issues that are not addressed in the Commission’s document. Firstly, while the Commission has recognised in this paper that sanitary and phytosanitary issues may have an impact on sustainability, it still does not explicitly identify the complex but strong link between animal welfare and sustainable development. Secondly, the Commission’s paper affirms that sanctions “would not guarantee that [they] will result in effective, sustainable and lasting improvement of key social and environmental standards”. While one can agree that nothing can guarantee changes in a sovereign country, it would be wrong to imply that the threat of sanctions never leads to lasting results. We will thus further develop why we consider that the EU is already legally allowed to impose sanctions in the framework of existing TSD chapters and that there is a need for such last resort sanctions, in addition to key improvements in the language of TSD chapters and of the cooperation mechanisms they set up.

THE LINK BETWEEN SUSTAINABILITY AND ANIMAL WELFARE

Sustainable development has no single legal definition. However, generally two themes are identified which have been described as ‘specific and recurrent enough to act as definitions’.4 First is the concept of intergenerational equity which stems from the Brundtland report’s description of sustainable development as a development that meets the needs of the present, without compromising the ability of future generations to meet their own needs.5 Second, there is also a three-pillared interpretation of sustainable development which consists of economic development, social welfare and environmental protection:6 A system is said to be sustainable if it is environmentally sound, economically viable and socially responsible. From this latter vision, and from the concerns about contentious trade-offs between animal welfare, human well-being and environmental sustainability, stemmed the

Emily Barrett Lydgate, Sustainable development in the WTO: from mutual supportiveness to balancing (2012) 11:4 World Trade Review 621, 627.

GH Brundtland and World Commission on Environment and Development, ‘Our Common Future: Report of the World Commission on Environment and Development’ (1987) (The Brundtland Report).

United Nations, World Summit on Sustainable Development: Plan of Implementation, Division for Sustainable Development A/Conf.199/L.7, 4 September 2002.

ANIMAL WELFARE, TRADE AND SUSTAINABLE DEVELOPMENT

concept of “One Welfare”. This idea was first suggested by Colonius and Earley in 2013: “in a global economy where animal welfare policy decisions in one country can impact food costs, wildlife habitats, and energy consumption across multiple nations, these concerns can no longer be addressed without a broader vision.”7 The “One Welfare” approach “recognises the interconnections between animal welfare, human wellbeing and the environment”, and “fosters interdisciplinary collaboration to improve human and animal welfare internationally.”8 It can also be seen as an approach complementing One Health, a concept already adopted by the European Commission which recognises that “human health and animal health are interdependent and bound to the health of the ecosystems in which they exist”,9 and as in line with the 2017 OIE Global Animal Welfare Strategy.10

Colonius & Earley, One welfare: a call to develop a broader framework of thought and action, J Am Vet Med Assoc 2013;242:309–310.

http://www.onewelfareworld.org

OIE, One Health at a glance, 2017, https://bit.ly/2IBKsBS

The strategy is based on a vision of “a world where the welfare of animals is respected, promoted and advanced, in ways that complement the pursuit of animal health, human well-being, socio-economic development and environmental sustainability”, https://bit.ly/2wZkH75

protecting animal welfare is essential to sustainable development in its own right, it ““While is thus also complementary to a number of other aspects of sustainable development. Among the UN Sustainable Development Goals (SDGs) set by the UN 2030 Agenda for Sustainable Development, several are either directly connected to animals or cannot be achieved without addressing animal welfare related issues. As we will see below, it is notably the case for SDG 2 on hunger, SDG 3 on health, SDG 13 on climate change, SDG 14 on seas and marine resources and SDG 15 on biodiversity loss.

The “One Welfare” approach can contribute to achieve these goals; it was notably defined to promote similar key global objectives “such as supporting food security, sustainability, reducing human suffering and improving productivity within the farming sector through a better understanding of the value of high welfare standards.”11

Eurogroup for Animals

http://www.onewelfareworld.org

2.1

END USE OF CROP PROTEINS

ANIMAL WELFARE AND FOOD SECURITY In order to eradicate world hunger, SDG 2 includes targets not only to “double the agricultural productivity and incomes of small-scale food producers” but also to “ensure sustainable food production systems and implement resilient agricultural practices that increase productivity and production, that help maintain ecosystems, that strengthen capacity for adaptation to climate change [etc] ...”. As claimed by the UK Farm Animal Welfare Council (FAWC) in a recent report discussing sustainable intensification of livestock agriculture:

agriculture cannot be considered “““[...] sustainable if it is achieved at an unacceptable cost to animal welfare.”12 The relentless focus on a global scale on cost-cutting and competitiveness has driven the livestock sector into an increasing industrialisation, which is based on intensive animal confinement that intrinsically negates the possibility to respect animal welfare, cramming animals into tiny and barren spaces where they cannot express natural behaviour, and where they are more vulnerable to diseases

¢ Back to human diet

¢ Lost

¢ Non fed to animals

2.2

ANIMAL WELFARE AND CLIMATE CHANGE In addition, producing meat is not an efficient way to feed the world. Intensive farms require high amount of feed and vast areas of land are being given over to feed farm animals, diverting grains from people to livestock. Studies have shown that, while 36 percent of the world’s crop calories are fed to animals, only 12 percent of these calories are returned for human consumption as meat or milk.13 This is insufficient and unsustainable. The earth cannot sustain humankind’s demands for food if we do not find a more environmentally friendly way to feed ourselves. The targets established by the UN SDG can only be achieved simultaneously if higher welfare farming techniques are adopted. EU trade policy must take this into account and ensure that it favours small-scale farmers, rather than intensive production systems.

According to a report published by the FAO in 2013, emissions produced the livestock sector amount to 14.5% of all global emissions.14 This is higher than emissions produced by all transport combined.15 According to GRAIN, a non profit organisation supporting small farmers and social movements, and to the Institute for Agriculture and Trade Policy, the top 20 meat and dairy companies emit more greenhouse gases (GHGs) than Germany, and the top 5 combined more than either Exxon, Shell or BP.16 Projections, even supposing efficient growth, still forecast that in 2050 livestock emissions will amount to 70% of the sustainable maximum level of GHGs planned.17 Emissions produced by the livestock sector will have to be lowered, and this means that there is a strong need to move towards less intensive, higher welfare production systems, emitting fewer GHGs. The scale at which animals are being reared for meat and dairy across the globe is

FAWC, Sustainable agriculture and farm animal welfare, 2016, https://bit.ly/2x0Sz5t

Cassidy E.M et al., Redefining agricultural yields: from tonnes to people nourished per hectare, 2013, University of Minnesota Environ Res Lett 8, p.1.

Gerber et al., Tackling climate change through livestock – A global assessment of emissions and mitigation opportunities, Rome, FAO, 2013, p.15, https://bit.ly/2KM8Ugt

GRAIN, Grabbing the bull by the horns – it’s time to cut industrial meat and dairy to save the climate, January 2017, https://bit.ly/2kjWm6g

Infographics developed by GRAIN and IATP available here: https://bit.ly/2yH4ztm

Pelletier & Tyedmers, Forecasting potential global environmental costs of livestock production 2000-2050, Proceedings of the National Academy of Sciences of the United States of America 107(43):18371-18374.

ANIMAL WELFARE, TRADE AND SUSTAINABLE DEVELOPMENT

leading to vast environmental degradation due to the waste, the freshwater footprint and soil degradation caused by intensive farming methods. Livestock production is also considered one of the main drivers of deforestation as forests are replaced by grazing or arable land to produce food for intensive livestock systems. This also contributes to increasing GHG emissions. The case of the Amazon illustrates this phenomenon perfectly: there all deforested land has been used for the purpose of rearing livestock: 80% has been transformed into pasture while the remaining 20% is now used to grow animal feed.18 Climate change also has an impact on the welfare of animals: wild animals are seeing the gradual destruction of their habitat. An emblematic example is that increasingly polar bears are struggling to feed themselves due to the melting ice. Farm animals are also affected as many countries are not able to ensure they are rescued or protected in case of natural disasters. As the EU is strongly committed to fight climate change, it must recognise the role played by the meat and dairy industries in this process, and ensure that its trade policy does not contradict its climate objectives, nor those of its partners.

2.3

ANIMAL WELFARE AND ANTIMICROBIAL RESISTANCE Antimicrobial resistance (AMR), the ability of microorganisms to resist antimicrobial treatments such as antibiotics, is according to the World Health Organisation (WHO) “one of the biggest threats to global health, food security, and development today”.19 This threat has also economic implications that the European Commission assesses to be around €1.5 billion per year due to the costs of treatments and of reduced productivity.20 According to DG SANTE, “AMR is responsible for an estimated 25,000 deaths per year in the EU”, and around 700,000 worldwide. Several reports predict that this number will only get higher: for instance the AMR review commissioned by the UK Government in 2016 forecasts ten million deaths per year in 2050.21

In its “One Health” Action Plan against AMR, the European Commission recognizes the link between the increase of antimicrobial resistance and poor farm welfare practices, by indicating as an objective the need to “continue to promote animal husbandry, including aquaculture and livestock farming systems, and feeding regimes, which support good animal health and welfare to reduce antimicrobial consumption”. Furthermore, the action plan underlines the importance of considering those issues when negotiating trade agreements by recognizing that “as one of the largest markets for agricultural products, the EU can play a major role in promoting its AMR-related standards, measures in food production, and standards on animal welfare.” The WHO also identifies a clear link between the two concepts by listing the improvement of animal welfare and hygiene as a way to in turn improve biosecurity on farms and thus “prevent and control the spread of antibiotic resistance”.22 In September 2016, the United Nations General Assembly admitted that overuse of antimicrobials in livestock production is the primary cause of the surge in antimicrobial resistance.23 This phenomenon is not due to small-scale productions, but to the spread of intensive farming systems, in which antimicrobial products are used routinely and increasingly. Due to the density in which animals are kept, treating one animal for a specific disease generally means treating them all, as any infection is likely to have spread throughout the entire group of animals. In addition medication is often used to compensate for poor hygiene and bad welfare practices. Intensive farming has thus an impact not only on animal but also on human health. The EU cannot overlook this when it negotiates trade agreements and further opens its market. As reported by Greenpeace, “in 2010, the five countries with the largest shares of global antimicrobial consumption in food animal production were China (23%), the United States (13%), Brazil (9%), India (3%), and Germany (3%). By 2030, this ranking is projected to be China (30%), the United States (10%), Brazil (8%), India (4%), and Mexico (2%).”24

trade policy needs to favour higher ““EU welfare methods that eliminate the need for the routine use of antimicrobial substances. In addition, intensive farming is worsening the occurrence of zoonoses (infectious animal diseases that can naturally be transmitted to humans) and devastating animal disease epidemics (e.g. avian flu and African swine fever) as well

Machovina & Feeley (2014) in Greenpeace, Less is More, 2018.

https://bit.ly/1kfP5RE

DG SANTE website on Antimicrobial resistance: https://bit.ly/2tsS4y9

https://bit.ly/2s32QYZ

According to Van Boeckel et al. (2017) in Greenpeace, Less is More, 2018.

https://bit.ly/2cYSQa4

Eurogroup for Animals

as the vast global costs associated with dealing with such outbreaks. The World Bank estimates the direct economic cost of zoonotic diseases over the past decade to be US$20 billion (with further indirect losses estimated at over US$200 billion).25

2.4

ANIMAL WELFARE AND CONSERVATION Preserving the various ecosystems and the environment is only possible if the survival of animal species is ensured. The concepts of animal welfare and conservation differ: welfare concerns the quality of life of individual animals while conservation concerns the survival of groups of animals making up a species. Nonetheless, the two topics have interlinking goals. For example, the ways in which animal species are being driven to extinction frequently harm their welfare. Overfishing and overhunting are unsustainable practices because they will make it impossible for future generations to meet their own needs. The Living Planet Index (LPI), which measures biodiversity abundance levels based on 14,152 monitored populations of 3,706 vertebrate species, shows a persistent downward trend. Since 1970, there has been a 58 percent overall decline in the numbers of species of fish, mammals, birds and reptiles worldwide; the decline, which is defined as the sixth mass extinction, is likely to reach 67 per cent by the end of the decade.26 If accurate, that will mean wildlife across the globe is vanishing at a rate of 2 percent a year. Animals are a vital aspect of the Earth’s ecosystems and of “the environment”. Living systems keep the air breathable and water drinkable and provide nutritious food. To continue to perform these vital services they need to retain their complexity, diversity and resilience. Biodiversity also plays an important role in ecosystem processes by providing the regulating, cultural and supporting services. The simple knowledge that diverse and rich forms of life are populating our forests and oceans provides humankind with a sense of contentment and wellbeing. The latter cannot be underestimated and is becoming increasingly recognised as valuable to humankind’s sustainable development, as highlighted by one useful study on the value of wildlife.27

As we have seen in previous section, the welfare of farm animals has an impact on conservation. Livestock production is said to be “the single most powerful driver of habitat loss on Earth”28 and 80% of terrestrial birds and mammal species currently considered as threatened are challenged by the loss of habitat driven by agricultural activities.29 Most of this is due to the need to use lands to produce animal feed, but not only. The extension of both grazing pastures and fields to grow crops deeply affects the balance of the existing ecosystem. Increasing livestock production has put pressure on large carnivores as well: they face persecution because of the fundamental change in farming and husbandry systems observed during the last century.

2.5

ANIMAL WELFARE AND THE SOCIAL DIMENSIONS OF SUSTAINABLE DEVELOPMENT The eradication of poverty and the development of the world’s third countries are an integral aspect of sustainable development. Eradication of poverty is the very first listed goal amongst the United Nations’ Sustainable Development Goals and failing to protect animal welfare may seriously hinder the ability of the world’s poorest people to develop. The world’s poorest people rely disproportionately on animals for their livelihood. Livestock provides underdeveloped populations with a source of income. Working animals are also essential for people living in least developed countries to continue with their way of life. Failing to protect the welfare of these animals will result in poor communities being less able to develop. For example, recent increases in demand for donkey skin products has led to working donkeys being stolen from their owners and populations being slaughtered at an unsustainable rate. This is having an increasingly harmful impact on those who rely on donkeys for their livelihood. Protecting the welfare of animals will help eradicate poverty by ensuring that the animals are healthy and able to work, that they do not contract zoonotic diseases before being eaten by humans, and that their populations survive through sustainable management which will provide longer-term benefits for poverty reduction.

World Bank, People, Pathogens and Our Planet, Vol 1: Towards a One Health Approach for Controlling Zoonotic Diseases, Report (2010) 50833-GLB.

WWF, Living Planet Report, 2016.

P Chardonnet et al., The value of wildlife (2002), 21(1) Rev Sci Tech 15, 38.

Machovina iet al (2015) quoted in Greenpeace, Less is More, 2018, p.25.

Tilman in Greenpeace, Less is More, 2018, p.28.

ANIMAL WELFARE, TRADE AND SUSTAINABLE DEVELOPMENT

TOWARDS STRONGER ENFORCEMENT OF TSD CHAPTERS

3.1

ECJ OPINION 2/15 AND CONDITIONALITY OF TSD Now that we have established that animal welfare should be explicitly covered by TSD chapters, it is important to look into how these chapters can be enforced. If provisions are too weak, we will not be able to foster progress for animals, neither in terms of welfare nor conservation. Before discussing the approach to enforcement that we support, it is important to underline that Eurogroup for Animals shares the view expressed by several NGOs that the EU is already legally allowed to adopt trade sanctions under existing TSD chapters. This has been confirmed by the Opinion provided by the European Court of Justice (ECJ) on the EU-Singapore FTA.

In May 2017, the European Court of Justice published its long-awaited Opinion regarding competences to ratify the EU-Singapore FTA (EUSFTA).30 The procedure used by the Commission allows it to request, a priori, the Opinion of the Court as to whether the EU has the competence to ratify a specific agreement.31 While an Opinion is not binding, it is certain that it should inform the EUâ&#x20AC;&#x2122;s future trade policy. Among other points, the Opinion contains important provisions on the sustainable development chapter which should impact future chapters in other trade deals.

Court of Justice of the European Union, Opinion 2/15: Opinion of the Court (Full Court) of 16 May 2017 â&#x20AC;&#x201C; European Commission (2017) C 239/03, https://bit.ly/2GE5Lgi.

Treaty on the Functioning of the European Union (2008) OJ C115/1 (TFEU), Art 218(11).

Eurogroup for Animals

3.1.1 Sustainable development as an integral part of EU trade policy In this Opinion, the ECJ ruled that sustainable development is now an integral part of the EU’s common commercial policy.32 This is extremely welcome. Finding sustainable development to be ‘integral’ to the common commercial policy recognises that the EU has set a precedent by including sustainable development in its free trade agreements. While the European Commission seems in no way likely to drop TSD provisions from its FTAs, it is nonetheless encouraging to have such reassurance from the ECJ. An official legal opinion makes it more difficult for the EU to u-turn on this policy. If the EU were to better recognize how improving animal welfare can contribute to sustainable development, this Opinion could eventually help achieve results for animal welfare using the TSD chapters. It is already positive that wildlife protection is covered by the provisions included in the TSD chapters and are therefore regarded as an integral part of free trade agreements, but if the scope of TSD chapters expands to cover animal welfare more holistically, this too could become an ‘integral part’ of TSD chapters.

3.1.2 Sustainable development within the realm of exclusive competence Trade has always been seen as one of the most fundamental competences of the EU. The EU’s Common Commercial Policy, as defined by article 207 (1) of the Treaty on the Functioning of the European Union (TFEU), falls under the exclusive competence of the EU.33 Thus, generally, the EU operates alone in setting trade policy for the Member States and in negotiating international agreements with third countries. Member States still have a decisive role in the ratification of the final deals. Over the past decade, the scope and coverage of free trade agreements has been increasing and the fight between the Commission and the Member States over the nature of EU trade deals has reached a climax. Since the conclusion of the EUKorea FTA in 2009, the Commission has repeatedly but unsuccessfully sought to get Member States to agree to its

exclusive competence over trade negotiations. A decision by the ECJ was seen as the only way to settle this persistent disagreement. Environmental and social regulations - both linked to provisions contained in the TSD chapters - are competences shared between the EU and the Member States.34 However, by ruling that the sustainable development provisions contained in the EUSFTA are considered an integral part of the common commercial policy, the ECJ ruled that certain aspects of sustainable development fall squarely within the ambit of the EU’s exclusive competence. The ECJ’s Opinion on sustainable development was somewhat surprising because it is at odds with the Advocate General’s opinion on the matter.35 The Advocate General, Eleanor Sharpston, opined that the environmental provisions in the EU-Singapore free trade agreement fell out with the common commercial policy and the exclusive competence of the EU. Her argument was that the international conventions listed in the agreement did not have the required ‘direct’ impact on trade but merely an indirect one.36 The Advocate General found that the absence of sanctions or conditionality in the TSD provisions meant that they existed in order to regulate standards notwithstanding the impact on trade.37 For this reason, Sharpston felt that these provisions did not fall within the common commercial policy. In most cases, the ECJ follows the Advocate General’s opinions but, in this case, the full court disagreed. The ECJ deviated from the Advocate General’s opinion in a number of key respects. As the EU Member States have no competence to act on issues that fall within the EU’s exclusive competence, the set of exclusive competences are narrowly and carefully constricted. If sustainable development provisions in trade policy are now considered to fall within the EU’s exclusive competence, the presence of such provisions in EU FTAs would not justify the “mixed” nature of trade agreements anymore.38 The ratification of the FTA would therefore not require a unanimous agreement from the Council or the consent of Member States’ national or regional parliaments, and if the agreement is still considered “mixed” (for instance in the cases of association

ECJ Opinion 2/15, para 147.

Treaty on the Functioning of the European Union (2008) OJ C115/1 (TFEU), Art 3(1)(e).

TFEU, Art 4(2)(e).

https://bit.ly/2s0QII8

Opinion of Advocate General Sharpston delivered on 21 December 2016, Opinion 2/15 pursuant to Article 218(11) TFEU – Free Trade Agreement between the European Union and the Republic of Singapore (2016) EU C 2016/992, https://bit.ly/2wZNQB9, para 482.

Opinion of Advocate General Sharpston, paras 490-491.

If an agreement covers the EU’s exclusive competences as well as competences shared between the EU and the Member States, it is deemed “mixed”. In such case, the approval of the agreement requires the unanimity of the Council, the consent of the European Parliament and the ratification by every assembly that is competent at national level. If an agreement covers only EU exclusive competences, its approval only requires a qualified majority of the Member States in the Council and the consent of the European Parliament.

ANIMAL WELFARE, TRADE AND SUSTAINABLE DEVELOPMENT

agreements), the national parliaments would not be able refuse ratification on the basis of TSD provisions. Member States would thus have less of a voice over how sustainable development is tackled in free trade agreements. This is not necessarily a democratic problem because, of course, the EU is a democratic union. However, it has been argued recently that the EU must improve its transparency and accountability measures to allow more European citizens to be included in discussion on topics that are important to them. This is particularly true for animal welfare, a topic proven to be close to the hearts of European citizens. There is overwhelming popular support for using trade policy to improve the lives of animals.39 The recent crisis around the ratification of the EU-Canada Comprehensive and Economic Trade Agreement (CETA) started by the regional parliament of Wallonia in Belgium proved just how important EU Member States are in ensuring a fair and democratic process. If the EU opted to restrict the scope of its future trade deals in order for them to remain within the bounds of its exclusive competence (as defined by the ECJ Opinion), it might lead to national and regional parliaments being excluded from such discussions in the future.

QB13: The EU is working with other countries to build a common understanding on internally recognised animal welfare standards. To what extend do you agree or disagree with each of the following statements? Imported products from outside the EU should respect the same animal welfare standards as those applied in the EU

31 3 1

It is important to establish animal welfare standards that are recognised across the world

ART 207 (1) – TFEU The common commercial policy shall be based on uniform principles, particularly with regard to changes in tariff rates, the conclusion of tariff and trade agreements relating to trade in goods and services, and the commercial aspects of intellectual property, foreign direct investment, the achievement of uniformity in measures of liberalisation, export policy and measures to protect trade such as those to be taken in the event of dumping or subsidies. The common commercial policy shall be conducted in the context of the principles and objectives of the Union’s external action.

5 2

The EU should do more to promote a greater awareness of animal welfare internationally

38 5 2

Figures from the European Commission,’Eurobarometer 442 on Attitudes of Europeans towards Animal Welfare’ (2015), https://bit.ly/2dJ7Iis

Eurogroup for Animals

Totally agree Tend to agree Tend to disagree Totally disagree

Don't know

3.1.3 Uncertainties around sustainable development provisions As much as the ECJ has given scope for some aspects of sustainable development to fall within EU exclusive competence, other aspects remain under shared competences. Some key paragraphs of the ECJ opinion imply that, if environmental provisions in a future free trade agreement aim to harmonise or regulate the levels of protection, then they would be considered a shared competence. The EU does not generally seek to harmonise standards of environmental protection in its FTAs. It has generally only looked at such harmonisation in partnership agreements with potential accession candidates or with its neighbouring countries. Nonetheless, it is interesting to study the ECJ’s Opinion to see what the consequences of pursuing such an approach would be. Paragraph 164 of the Opinion states that the exclusive competence of the European Union ‘cannot be exercised in order to regulate the levels of social and environmental protection in the Parties’ respective territory’. The ECJ also notes that Article 3(1)(e) of the Treaty on the Functioning of the European Union requires that ‘the exercise of the competences conferred … in the field of the common commercial policy shall not affect the delimitation of competences between the Union and the Member States …’. The ECJ notes in paragraph 165 that the parties, in the EU-Singapore agreement, do not intend to harmonise their labour or environmental standard and it uses this factor to justify its decision in paragraph 166 that the sustainable development provisions in this agreement falls under the EU’s exclusive competence. Thus, it seems that the intention to harmonise standards can constitute a test for whether or not the sustainable development provisions will fall within the exclusive competence of the EU or whether they will be a shared competence between the EU and the Member States. The EU’s more common practice of specifying that the parties have the right to regulate their own standards may however push any TSD provision back into the EU’s exclusive competence. If the right to regulate individually is included in an agreement, it would amount to a strong indication that the parties do not intend to change the levels of protection, even if some harmonisation efforts are included. The ECJ did not make the dividing lines between the different types of competences absolutely clear here. What can be concluded with certainty is that if the EU seeks to use its trade agreements to set standards of environmental protection, the Treaty will be considered as “mixed”, under shared competence, and Member States’ parliaments will 16

ANIMAL WELFARE, TRADE AND SUSTAINABLE DEVELOPMENT

have to be involved in its ratification process. This finding is interesting in two ways: first, it establishes a certain protection of EU’s standards, as if they were to be directly affected by the TSD chapter of an FTA, Member States would be involved in the ratification of that agreement, and unanimity would be required. However, it also means that this longer ratification procedure would be needed if the EU’s purpose was to use an FTA to push a country into introducing specific standards in their legislation, which could be useful to foster faster progress for animals. The Commission will be reluctant to pay such price and is likely to continue favouring trade agreements that can be ratified at EU level only.

3.1.4 Trade sanctions under current TSD chapters The Opinion published by the ECJ also implies, through paragraph 161, that sustainable development provisions fall within the scope of “conditionality”, implying that stronger enforcement of these provisions is possible through international law. It states that “a breach of the provisions concerning social protection of workers and environmental protection … authorises the other Party – in accordance with the rules of customary international law codified in Article 60(1) of the Convention on the law of treaties [known as the Vienna convention] ... which applies in relations between the European Union and third States … - to terminate or suspend the liberalisation, provided for in the other provisions of the envisaged agreement, of that trade.” It essentially affirms that if one party fails to implement the environmental and social provisions in a free trade agreement the other party can retaliate by terminating liberalisation of trade in certain products. Article 60(1) of the Vienna Convention, referred to in the ECJ Opinion, concedes that “a material breach of a bilateral treaty by one of the parties entitles the other to invoke the breach as a ground for terminating the treaty or suspending its operation in whole or in part.” The ECJ thus considers non-compliance with the sustainable development rules in a free trade agreement to constitute a material breach of the agreement. According to Article 60(3) of the Vienna Convention, a material breach will either consist of: (a) a repudiation of the treaty not sanctioned by the present Convention; or (b) the violation of a provision essential to the accomplishment of the object or purpose of the treaty. Thus, if one party to a free trade agreement fails to implement the sustainable development provisions in a manner that can be considered a repudiation of the treaty, the other party may retaliate.

This is highly significant as it gives sustainable development chapters a type of conditionality whereby implementation of the FTA becomes “conditional” on compliance with the sustainable development provisions. So far, the only conditions the EU officially attaches to the implementation of other FTAs are on the respect for certain values, such as human rights and the rule of law, enshrined in Partnership and Cooperation Agreements (PCA) which the EU negotiates in parallel with most new generation FTAs (TTIP being the only notable exception). However, the nature of the obligations contained in TSD chapters may make it difficult for a party to prove repudiation. For example, in CETA, the obligations are rather woolly in language. The parties have only committed to ‘aim’ at ‘promoting’ sustainable development and it would be very difficult to prove a party had failed to do so. Aiming to do something is not the same as actually doing it, or even actually attempting to do it. Rather, all that is required is that there is some proof the party intends to do something. Thus, in practice, the current nature of the TSD provisions enacted by the EU may make it difficult for the Vienna Convention rule to be utilised. This is an additional reason why TSD chapters should be reinforced, using a more straightforward language and listing clearer commitments.

cooperation mechanisms leading to last resort sanctions. In this section, we will present Eurogroup for Animals’ views on what future TSD chapters should look like and comment on the fifteen proposals made by the Commission in February 2018 in reaction to the contributions they received from Member States, the European Parliament and the civil society after publishing their initial non-paper on the topic in July 2017.

3.2.1 Sanctions – from general conditionality to explicit measures As detailed in the previous section, Eurogroup for Animals believes that implementing sanctions is already possible under current TSD chapters. In its February paper, the Commission argues that a sanction-based approach “would not guarantee […] effective, sustainable, and lasting improvement of key social and environmental standards”. While it remains the sovereign right of a third partner to adopt measures affecting its territory and citizens, it would be untrue to conclude from that sentence that the threat of sanctions, has never had any positive impact on the EU’s promotion of norms and values.

ECJ ruled that sustainable ““The development is now an integral part of the EU’s common commercial policy.

3.2

EC’S PROPOSALS ON BETTER ENFORCEMENT OF TSD CHAPTERS The Commission’s paper lists fifteen proposals to strengthen TSD chapters in the future. Those proposals revolve around three specific innovations: a stronger emphasis on climate-related action, a wider scope of action for the Domestic Advisory Groups and more resources allocated to ensure the implementation of the TSD chapter. After the heated debates in the European Parliament that accompanied the TTIP negotiations and the ratification of CETA, the Commission had even lost the support of the Socialist and Democrats (S&D) group regarding TSD chapters. The S&D group had declared that they would not vote in favour of any other FTAs if the TSD chapters were to remain toothless. The question is thus how to increase the impact of those chapters in the light of the Opinion 2/15 and of the seven-year experience that the EU has had using the mechanisms existing in current chapters. Eurogroup for Animals believes that the European Commission should not only recognize the consequences of Opinion 2/15 but also improve the language used in TSD chapters, as well as the dispute settlement system and all Eurogroup for Animals

Taking the example of the EU regulation on illegal, unreported and unregulated (IUU) fishing, the EU has shown it can adopt a stronger approach to preserve the environment and that it has had long-term positive impact for the environment. Indeed, this regulation was enacted in 2008 to step up the fight against IUU fishing and its widely recognised damaging economic, social and environmental impact. The regulation set up what is commonly called the ‘carding system’ whereby the EU can warn a country that its fisheries do not respect the established criteria (i.e. grant the country a ‘yellow card’) and even list that country as uncooperative (i.e. grant it a ‘red card’), which automatically implies that its fishery imports will be banned from the EU market. Once a country is warned, a proper dialogue between the EU and the partner can start. This is often the occasion for the EU to provide intense capacity-building assistance. Very often, a yellow card does not lead to a red one as the partner country improves the situation in the fishing industry to prevent a ban on its imports. The lessons learned from almost a decade of using this procedure show it can achieve concrete results by using both a carrot (technical assistance from the EU) and a stick (potential ban on imports). The recent case of Thailand has even shown that the EU was ready to include the question of slavery aboard and labour rights in its assessment of the sustainability of the Thai fishing and processing industry. 17

Interestingly, the need for sanctions in trade agreement has been explicitly identified by the EU for the first time in the context of the future Brexit negotiations. In January 2018, in a presentation on level-playing field, the Commission indicated that adopting a “non-regression” clause in the EU-UK trade agreement will be necessary, and that such clause, which reads like the provision usually contained in a TSD chapter (parties should not lower standards in order to attract trade), should be accompanied by a sanction regime (that could include “suspension of obligations, temporary compensations, financial sanctions, cross retaliation, ‘guillotine clause’, etc.”). The options we foresee include monetary fines, the removal of commercial preferences in trade, stopping trade in certain products, and noncommercial sanctions. In the case of Brexit, the EU is facing a significant economic threat linked with a potential lowering of standards in the UK. Hopefully, this will lead to the wording of more efficient TSD provisions in order to better ensure that trade agreements do not hinder sustainable development. This is an objective that should be as important as ensuring that the EU does not economically suffer from the lowering of any standard by a partner.

ANIMAL WELFARE, TRADE AND SUSTAINABLE DEVELOPMENT

Reinforcing the dispute settlement mechanism is the minimum that should be achieved. The possibility to open effective channels of communication once a problem is identified – allowing for technical assistance and capacity building – will improve the effectiveness of the entire process. Moreover, a credible dispute settlement mechanism allowing for better engagement is likely to make the possibility of sanctions more bearable to the third partner. Our vision is that once an issue has been identified either by a party or by any stakeholder (see below for the complaint mechanism), a panel should be put in place to produce a report containing, if the panel confirms the negative findings, a clear roadmap to foster and monitor progress towards resolution. The lack of progress should in due time lead to sanctions. Decisions made by the panel should be covered by the State-to-State Dispute Settlement Mechanism. It might be difficult to convince our partners at first, but the EU has demonstrated in the past that it is feasible. When the EU started introducing the now established conditionality based on human rights, rule of law and democracy, some partners protested (especially developed countries). However, the restricted number of cases in which the EU has used the sanctions foreseen by the agreement or the instrument shows that it acts with restraint.

3.2.2 A more open complaint mechanism The dispute settlement mechanism must be more accessible insofar as civil society organisations should be allowed to trigger it. This is an element that is still not included in the fifteen new proposals published by the Commission. The best solution is for the Commission and its partners to officially open the existing mechanisms to complaints made either by individuals, civil society organisations, or by one of the Domestic Advisory Groups in the text of the trade agreements. This would provide the best results as it would also strengthen the role of civil society in the partner countries. However, as suggested by ClientEarth,40 it could also develop a unilateral system based on what exists for businesses under the Trade Barriers Regulation (TBR). Such system would not only be open to civil society organisations (and trade unions), but also to Member States and individuals. The advantages are numerous: it would not require the consent of the third partner (as it would be an internal mechanism); it would apply to all TSD chapters, existing and future ones (as it would be part of an EU legislation related to TSD chapters); it would put entities caring about TSD-related matters on an equal footing with

Clientearth, A formal Complaint Procedure for a More Assertive Approach towards TSD Commitments, 27 October 2017.

Eurogroup for Animals

businesses (who have been enjoying a similar mechanism for 33 years regarding violations of WTO agreements); finally, it would ensure more transparency and efficiency in handling complaints about TSD matters. In setting up this mechanism, the EU could learn for the American and Canadian experiences, rather than disregarding their sanction-based approach as ineffective. The mechanism suggested by ClientEarth is the following: any individual, NGO, trade union or Member State could log a substantiated complaint, that would lead to the Commission investigating the case, under strict timelimits. The Commission could then issue its decision, with clear justifications. If the Commission concludes that the third party does not comply with the commitments made in the TSD chapter, it would have the obligation to start a procedure involving the setting up of a panel of experts in charge of producing a report on the matter first, and if necessary to either use the state-to-state dispute settlement mechanism if available, or conditionality of the TSD provisions to impose sanctions. Judicial review of the initial decision made by the Commission after investigations should be available. Such a mechanism would resonate with the proposals made by the Commission to better involve Member States and their embassies in third countries.

3.2.3 Bolder provisions and commitments The existence of conditionality, and thus of potential sanctions, as well as of a better complaint mechanism, will not deliver their full potential if commitments contained in the TSD chapters remain so weak. The provisions in TSD chapter should not be limited to reiterating commitments made at the international level by the Parties, for example on the Convention on International Trade and Endangered Species (CITES), and on the Convention on Biological Diversity (CBD). It is well recognized that the enforcement mechanisms of Multilateral Environmental Agreements (MEAs) are generally “weak, relying heavily on nongovernmental organisations for monitoring and ‘naming and shaming’ to report incidents of non-compliance”.41 In addition, the language used in MEAs is often vague and ambiguous.42 While it is of course essential that the EU continues to support international agreements, it should strive to achieve more with its trading partners. In the Commission’s proposals, it seems that work on labour rights, notably with the ILO, has progressed faster than that on environmental matters. The EU needs to reset the balance and put more effort into improving collaboration with MEAs, as well as into strengthening the language of these agreements. Regarding wildlife conservation – which contrary to animal welfare is already covered by TSD chapters – EU agreements should include more proactive wording offering specific technical assistance and incentives for its trading partners to better fight against wildlife trafficking. This would go in the direction of the European Parliament report on EU Common Commercial Policy in the context of wildlife sustainability imperatives.43 In Article 24 of this report, the European Parliament expressed its support for future agreements to include provisions aimed at tackling wildlife trafficking, echoing the Commission’s commitment in point 29 of its Action Plan against wildlife trafficking.44 So far, the language contained in the EU’s FTAs fails to help adopting any concrete measure towards safeguarding particular endangered species and to counter phenomenon that cannot be dealt with through the Convention on International Trade in Endangered Species (CITES) due to the unwillingness of the partner to cooperate, either because the partner does not respect decisions adopted in the framework of the convention or because he does not propose endangered species to be included in relevant annexes. The EU could for instance consider including

commitments to develop and support alternatives to the consumptive use of wildlife, such as trust funds and payments for ecosystem services to guarantee truly sustainable financing of protected and community wildlife areas. In addition, as explained in earlier sections, TSD chapters cannot effectively tackle unsustainable development if they do not recognize the link between animal welfare and conservation, and between animal welfare and sustainable development. Hence, they must also address unsustainable, intensive farming methods. TSD chapters should, in future, include provisions that call on the partners to ensure the sustainability of their animal-rearing, housing, transport and slaughter methods. References could be made to the UN sustainable Development Goals. To improve the monitoring of the TSD chapters, Eurogroup for Animals shares Transport & Environment’s suggestion to use scorecards listing the different fields that Parties need to monitor to assess the situation and the progress achieved. This approach is similar to the one used with countries benefiting from a scheme of unilateral trade preferences called GSP+, which is linked with the respect by the partner of 27 international conventions on labour and environmental matters.45 Subsequently, we welcome the proposal made by the Commission to establish country priorities for TSD chapters at the stage of negotiations, but also later during implementation. These priorities must be established transparently, allowing for the contribution of civil society organisations, and they must cover animal welfare-related issues. In addition to scorecards, FTAs could also include a set of voluntary standards drawing inspiration from existing voluntary sustainability standards (VSS), explored at length by a paper from the Leuven Centre for Global Governance Studies.28 These standards can include a set of voluntary environmental and other measures based on international standards which could be referred to in an FTA. They go beyond simply referring to international standards by including specific actions that can be taken to meet these standards and by putting an institutional framework in place to monitor compliance. The benefit of this approach is that the producers who opt to use these standards can label their products accordingly, thus increasing their appeal in the marketplace. While this method would allow the partners to somewhat ‘transcend the scope of their national regulatory capacities’, it depends on a

T&E, Trade and Sustainable Development : a chance for innovative thinking, October 2017.

European Parliament, Report on EU Common Commercial Policy in the context of wildlife sustainability imperatives, (2016), 2016/2054/INI.

European Commission, EU Action Plan against Wildlife Trafficking (2016), COM(2016) 87.

T&E, Trade and Sustainable Development : a chance for innovative thinking, October 2017.

ANIMAL WELFARE, TRADE AND SUSTAINABLE DEVELOPMENT

strong interlinkage between public and private actors.29 Referring to VSS-like standards in trade deals would not be a first in EU policy making as those standards are already parts of other EU legislation, such as the EU Renewable Energy Directive.

3.2.4 Domestic Advisory Groups and monitoring An agreement cannot have any effect unless its impact on sustainable development can be properly monitored. Eurogroup for Animals therefore welcomes the Commission’s decision to increase the scope of Domestic Advisory Groups (DAGs) to the entire FTA, to “provide advice on the sustainability implications of other parts of the agreements”. This is a first step, even though the link between animal welfare and sustainability should be explicitly referred to. In terms of improvement, there is a need to formally improve cooperation between the DAGs and Working Groups (with representatives of the parties) established by the Treaties. Working Groups should allow for the participation of members of the civil society, and DAGs should be debriefed in details about their activities. Furthermore, learning from previous experiences such as with Peru or Ukraine, the EU should also consider conditioning any provisional application of trade agreements to the setting up of Domestic Advisory Groups in the EU and the partner country. The EU often underlines the positive impact of its trade policy on the strengthening of civil society organisations in partner countries. This and the monitoring of the implementation of the FTA cannot occur properly if there is no counterpart to the EU DAG. In the case of Ukraine, the government has not yet managed to appoint its DAG, 9 months after the full entry into force of the EU-Ukraine DCFTA, more than 2 years after provisional implementation started, and 4 years after signature. This is unacceptable. In its paper, the Commission suggests producing guidelines for partner countries on how to establish and run DAGs, which is welcome – also to better inform NGOs working in partner countries – but not sufficient.

Eurogroup for Animals

CONCLUSIONS

Eurogroup for Animals welcomes many of the proposals made by the Commission such as the extension of the scope of the Domestic Advisory Groups, the establishment of country priorities, the increased cooperation with MEAs, Member States and the European Parliament and the additional funding available to better share experiences and expertise with civil society organisations from the partner countries. However, these proposals do not go far enough. The EU must adopt a more comprehensive approach to TSD chapters and recognize the strong link between animal welfare and numerous dimensions of sustainable development. The lack of any mention of animal welfare in TSD chapters, and in the Commission’s proposals, reflects how animal welfare has not been sufficiently mainstreamed in EU trade policy. As of today, animal welfare is not covered by the EU Trade Strategy ‘Trade for all’. It is thus not surprising, even if very disappointing, that animal welfare standards are not considered when the Commission’s proposal discusses the need to better fund initiatives related to Corporate Social Responsibility (CSR) programmes, or ‘Aid for Trade’. The Commission should address this shortcoming as soon as possible, when reviewing “Trade for All”. The enforcement mechanism prescribed by the Commission remains too weak. Only the parties are allowed to start a dispute and there is no procedure planned if this soft method does not lead to any progress in the partner country. There is also no tool to put any pressure on partner countries to establish their domestic advisory groups in due time, and it remains uncertain whether trade agreements previously signed by the EU will be amended once this debate will have sufficiently progressed in the EU.

Trade cannot solve all problems across the globe. However, trade agreements should do no harm and they should aim at promoting values. The EU is a global norm-setting power and a leader on animal welfare standards. As underlined by the recent study published by DG SANTE on the impact of EU’s animal welfare international activities, the EU “has clearly played a very prominent and decisive role in raising awareness about [animal welfare] standards in the global agenda, starting a policy dialogue on the subject and increasing the standing of [animal welfare] policy among Government institutions. It has also been successful in facilitating incorporation of [animal welfare] standards in in the legislation of many non-EU Countries across the globe. The process, however, has been necessarily slow and progress uneven in the different areas. (...) EU [animal welfare] standards have played a lighthouse effect.“46 The EU must build upon this positive experience of more than a decade of engaging third partners on animal welfare standards, partly through trade; it must step up its efforts to go even further. EU Trade policy should mitigate the negative impact of trade on sustainable development, and even support it worldwide. By expanding the coverage of its TSD chapters and by strengthening their enforcement mechanisms with last-resort sanctions, the EU can ensure that its huge market can be used as a leverage to achieve that goal, as well as better welfare and protection for all animals on this planet.

ANIMAL WELFARE, TRADE AND SUSTAINABLE DEVELOPMENT

DG SANTE, Study on the Impact of Animal Welfare International Activities, November 2017, p.209.