In the five months since the last extension of the Brexit deadline, the questions about the UK’s trading relationship with the EU remain as open as before, as do those about what sort of relationship it should seek with other partners.

The world has not stood still, however, and so the UKTPO is convening another panel to consider constructive ways of moving forward. The panel will discuss potential trajectories for UK trade policy, followed by a question and answer session.

The UK Trade Policy Observatory (UKTPO) is a partnership between Chatham House and the University of Sussex which provides independent expert comment on, and analysis of, trade policy proposals for the UK as well as training for British policymakers through tailored training packages.

With international trade discourse taking an increasingly transactional and sometimes belligerent tone, it would be easy to overlook the quiet revolution currently under way to bring new voices into trade policy development and monitoring. The traditional division of responsibilities between the executive and legislature – whereby treaties are negotiated and signed by the executive, and the legislature does what is necessary to implement them – may be undergoing some change.

Growing awareness of the implications of trade and investment treaties for many aspects of day-to-day life – food standards, employment opportunities, environmental quality, availability of medicines and data protection, just to name a few – is fuelling demands by people and businesses for more of a say in the way these rules are formulated and developed.

Various options for enhancing public and parliamentary scrutiny of trading proposals have recently been examined by two UK parliamentary select committees.[1] The reason for this interest is obviously Brexit, which has presented UK civil servants and parliamentarians with the unusual (some would say exciting) opportunity to design an approval and scrutiny process for trade agreements from scratch.

Doubtless, EU authorization, liaison and approval procedures (which include a scrutinizing role for the European Parliament) will be influential,[2] as will the European Commission’s experience with stakeholder engagement on trade issues.[3] The recommendations of both UK select committees to include human rights impact assessment processes as part of pre-negotiation preparations[4] echo calls from UN agencies and NGOs for more rigorous and timely analysis of the human rights risks that may be posed by new trading relationships.[5] Again, EU practice with what it terms ‘sustainability impact assessment’ of future trade agreements provides a potential model to draw from.[6] 

However, process is no substitute for action. Human rights impact assessment is never an end in itself; rather, it is a means to a positive end, in this case a trade agreement which is aligned with the trading partners’ respective human rights obligations and aspirations. It bears remembering, though, that the idea of assessing trade proposals for future human rights risks is a relatively recent one. Do we have the tools and resources to make sure that this is a meaningful compliance and risk management exercise?

Thus far there is little evidence that human rights impact assessment and stakeholder engagement exercises are having any real impact on the content of trade agreements.[7] This is the case even in the EU, where practice in these areas is the most advanced and systematic.[8]

There are several possible reasons for this. First, the methodological challenges are enormous. Aside from the crystal-ball gazing needed to forecast the social, economic and environmental effects of a trade intervention well into the future, demonstrating causal links between a trade agreement and a predicted adverse impact is often highly problematic given the number of other economic and political factors that may be in play.[9]

Secondly, there are many challenges around the need to engage with affected people and listen to their views.[10] The sheer number of possible impacts of a trade agreement on different individuals and communities, as well as the range of rights potentially engaged, makes this a difficult (some would say impossible) task. Some prioritization is always necessary.

This makes for difficult decisions about who to engage with and how. Perceived bias or an apparent lack of even-handedness – favouring business compared to civil society, for instance – can sow mistrust about the true aims of such a process, undermining its future effectiveness as participants begin to question whether it is genuine or worthwhile.[11]

The challenges are even more acute where impact assessment practitioners are tasked with investigating potential human rights impacts in other countries. Even if it is possible to get past the inevitable political sensitivities,[12] the sort of in-depth consultations required will be beyond the budget and time constraints of most assignments.[13]

There are good reasons why trade policy should be subject to greater public and parliamentary scrutiny, and why there should be more opportunities for public participation in the formation of new trading regimes. By building more opportunities for stakeholder consultation at these stages, we can acquire perspectives on trade that are not available from other forms of assessment and analysis.

However, policymakers should be wary of overstating the benefits of existing procedural models. Human rights impact assessment processes are still struggling to provide compelling analyses of the relationships between trade agreements and the enjoyment of human rights, let alone a roadmap for policymakers and trade negotiators as to what should be done.[14]

And financial and practical barriers to participation in stakeholder engagement exercises mean that, at best, these will provide only a partial picture of stakeholder impacts and views.

Experiences with human rights impact assessment of trade agreements so far demonstrate the need for realism about two things: first, the extent to which one can sensibly anticipate and analyse human rights-related risks and opportunities in the preparation stages for a new trading agreement; and, second, the extent to which problems identified in this way can be headed off with the right form of words in the treaty itself.

Both recent UK select committee reports place considerable faith in the ability of pre-project transparency and scrutiny processes to flush out potential problems and prescribe solutions. Of course, there may be cases where frontloading the analysis in this way could be useful, for instance where the human rights implications are so clear that they can readily be addressed through upfront commitments by the parties concerned, whether by bespoke or standardized approaches.

More often, though, for a trade agreement running many years into the future, human rights impacts and implications will take time to emerge, suggesting the need for robust monitoring and mitigation frameworks designed with longevity in mind. Ideally, pre-signing approval and assessment processes would lay the groundwork for future action by both trading partners, either jointly or separately (though preferably both).

To this end, as well as developing ideas for more robust substantive provisions on human rights, policymakers should consider the institutional arrangements required – whether pursuant to the trade agreement or by complementary processes – to ensure that human rights-related risks identified during the planning stages are properly and proactively followed up, that emerging risks are tackled in a timely fashion, and that there are opportunities for meaningful stakeholder contributions to these processes.

Notes

[1] UK Joint Committee on Human Rights (2019), ‘Human Rights Protections in International Agreements, Seventeenth Report of Session 2017–19’, HC 1833 HL paper 310, 12 March 2019, https://publications.parliament.uk/pa/jt201719/jtselect/jtrights/1833/1833.pdf; and House of Commons International Trade Committee (2018), ‘UK Trade Policy Transparency and Scrutiny, Sixth Report of Session 2017-2019’, HC 1043, 29 December 2018.

[2] European Parliament and Directorate General for External Policies (2019), Parliamentary scrutiny of trade policies across the western world, study paper, March 2019, http://www.europarl.europa.eu/RegData/etudes/STUD/2019/603477/EXPO_STU(2019)603477_EN.pdf.

[3] European Commission (2019), ‘Trade policy and you’, http://ec.europa.eu/trade/trade-policy-and-you/index_en.htm.

[4] See UK Joint Committee on Human Rights (2019), ‘Human Rights Protections in International Agreements’, para 12; and House of Commons International Trade Committee (2018), ‘UK Trade Policy Transparency and Scrutiny’, paras 124–34.

[5] OHCHR (2003), Report of the High Commissioner for Human Rights on Human Rights, Trade and Investment, 2 July 2003, E/CN.4/Sub.2/2003/9, Annex, at para 63; UN Economic and Social Council (2017), ‘General Comment No 24 (2017) of the Committee on Economic, Social and Cultural Rights on State obligations under the International Covenant on Economic, Social and Cultural Rights in the context of business activities’, UN Doc. E/C.12/GC/24, 10 August 2017, para 13; and UN General Assembly (2011), ‘Guiding principles on human rights impact assessment of trade and investment agreements’, Report of the Special Rapporteur on the Right to Food, Olivier De Schutter, UN Doc. A/HRC/19/59/Add.5, 19 December 2011.

[6] European Commission (2016), Handbook for Sustainability Impact Assessment (2nd ed.), Brussels: European Union, http://trade.ec.europa.eu/doclib/docs/2016/april/tradoc_154464.PDF.

[7] Zerk, J. (2019), Human Rights Impact Assessment of Trade Agreements, Chatham House Research Paper, London: Royal Institute of International Affairs, https://www.chathamhouse.org/publication/human-rights-impact-assessment-trade-agreements.

[8] Ibid., pp. 11–13. For a detailed explanation of the EU’s approach to human rights impact assessment, see European Commission (2016), Handbook for Sustainability Impact Assessment.

[9] Zerk (2019), Human Rights Impact Assessment of Trade Agreements, pp. 14–21.

[10] Ibid., pp. 21–22.

[11] Ergon Associates (2011), Trade and Labour: Making effective use of trade sustainability impact assessments and monitoring mechanisms, Final Report to DG Employment, Social Affairs and Inclusion European Commission, September 2011; and Gammage, C. (2010), ‘A Sustainability Impact Assessment of the Economic Partnership Agreements: Challenging the Participatory Process’, Law and Development Review, 3(1): pp. 107–34. For a civil society view, see Trade Justice Movement (undated), ‘Trade Justice Movement submission to the International Trade Committee inquiry into UK Trade Policy Transparency and Scrutiny’, https://www.tjm.org.uk/resources/briefings/tjm-submission-to-the-international-trade-committee-inquiry-into-uk-trade-policy-transparency-and-scrutiny, esp. paras 23–32.

[12] Zerk (2019), Human Rights Impact Assessment of Trade Agreements, pp. 20–21.

[13] Ibid., pp. 21–22.

[14] Ibid.

This essay was produced for the 2019 edition of Chatham House Expert Perspectives – our annual survey of risks and opportunities in global affairs – in which our researchers identify areas where the current sets of rules, institutions and mechanisms for peaceful international cooperation are falling short, and present ideas for reform and modernization.

In the five months since the last extension of the Brexit deadline, the questions about the UK’s trading relationship with the EU remain as open as before, as do those about what sort of relationship it should seek with other partners.

The world has not stood still, however, and so the UKTPO is convening another panel to consider constructive ways of moving forward. The panel will discuss potential trajectories for UK trade policy, followed by a question and answer session.

The UK Trade Policy Observatory (UKTPO) is a partnership between Chatham House and the University of Sussex which provides independent expert comment on, and analysis of, trade policy proposals for the UK as well as training for British policymakers through tailored training packages.

With international trade discourse taking an increasingly transactional and sometimes belligerent tone, it would be easy to overlook the quiet revolution currently under way to bring new voices into trade policy development and monitoring. The traditional division of responsibilities between the executive and legislature – whereby treaties are negotiated and signed by the executive, and the legislature does what is necessary to implement them – may be undergoing some change.

Growing awareness of the implications of trade and investment treaties for many aspects of day-to-day life – food standards, employment opportunities, environmental quality, availability of medicines and data protection, just to name a few – is fuelling demands by people and businesses for more of a say in the way these rules are formulated and developed.

Various options for enhancing public and parliamentary scrutiny of trading proposals have recently been examined by two UK parliamentary select committees.[1] The reason for this interest is obviously Brexit, which has presented UK civil servants and parliamentarians with the unusual (some would say exciting) opportunity to design an approval and scrutiny process for trade agreements from scratch.

Doubtless, EU authorization, liaison and approval procedures (which include a scrutinizing role for the European Parliament) will be influential,[2] as will the European Commission’s experience with stakeholder engagement on trade issues.[3] The recommendations of both UK select committees to include human rights impact assessment processes as part of pre-negotiation preparations[4] echo calls from UN agencies and NGOs for more rigorous and timely analysis of the human rights risks that may be posed by new trading relationships.[5] Again, EU practice with what it terms ‘sustainability impact assessment’ of future trade agreements provides a potential model to draw from.[6] 

However, process is no substitute for action. Human rights impact assessment is never an end in itself; rather, it is a means to a positive end, in this case a trade agreement which is aligned with the trading partners’ respective human rights obligations and aspirations. It bears remembering, though, that the idea of assessing trade proposals for future human rights risks is a relatively recent one. Do we have the tools and resources to make sure that this is a meaningful compliance and risk management exercise?

Thus far there is little evidence that human rights impact assessment and stakeholder engagement exercises are having any real impact on the content of trade agreements.[7] This is the case even in the EU, where practice in these areas is the most advanced and systematic.[8]

There are several possible reasons for this. First, the methodological challenges are enormous. Aside from the crystal-ball gazing needed to forecast the social, economic and environmental effects of a trade intervention well into the future, demonstrating causal links between a trade agreement and a predicted adverse impact is often highly problematic given the number of other economic and political factors that may be in play.[9]

Secondly, there are many challenges around the need to engage with affected people and listen to their views.[10] The sheer number of possible impacts of a trade agreement on different individuals and communities, as well as the range of rights potentially engaged, makes this a difficult (some would say impossible) task. Some prioritization is always necessary.

This makes for difficult decisions about who to engage with and how. Perceived bias or an apparent lack of even-handedness – favouring business compared to civil society, for instance – can sow mistrust about the true aims of such a process, undermining its future effectiveness as participants begin to question whether it is genuine or worthwhile.[11]

The challenges are even more acute where impact assessment practitioners are tasked with investigating potential human rights impacts in other countries. Even if it is possible to get past the inevitable political sensitivities,[12] the sort of in-depth consultations required will be beyond the budget and time constraints of most assignments.[13]

There are good reasons why trade policy should be subject to greater public and parliamentary scrutiny, and why there should be more opportunities for public participation in the formation of new trading regimes. By building more opportunities for stakeholder consultation at these stages, we can acquire perspectives on trade that are not available from other forms of assessment and analysis.

However, policymakers should be wary of overstating the benefits of existing procedural models. Human rights impact assessment processes are still struggling to provide compelling analyses of the relationships between trade agreements and the enjoyment of human rights, let alone a roadmap for policymakers and trade negotiators as to what should be done.[14]

And financial and practical barriers to participation in stakeholder engagement exercises mean that, at best, these will provide only a partial picture of stakeholder impacts and views.

Experiences with human rights impact assessment of trade agreements so far demonstrate the need for realism about two things: first, the extent to which one can sensibly anticipate and analyse human rights-related risks and opportunities in the preparation stages for a new trading agreement; and, second, the extent to which problems identified in this way can be headed off with the right form of words in the treaty itself.

Both recent UK select committee reports place considerable faith in the ability of pre-project transparency and scrutiny processes to flush out potential problems and prescribe solutions. Of course, there may be cases where frontloading the analysis in this way could be useful, for instance where the human rights implications are so clear that they can readily be addressed through upfront commitments by the parties concerned, whether by bespoke or standardized approaches.

More often, though, for a trade agreement running many years into the future, human rights impacts and implications will take time to emerge, suggesting the need for robust monitoring and mitigation frameworks designed with longevity in mind. Ideally, pre-signing approval and assessment processes would lay the groundwork for future action by both trading partners, either jointly or separately (though preferably both).

To this end, as well as developing ideas for more robust substantive provisions on human rights, policymakers should consider the institutional arrangements required – whether pursuant to the trade agreement or by complementary processes – to ensure that human rights-related risks identified during the planning stages are properly and proactively followed up, that emerging risks are tackled in a timely fashion, and that there are opportunities for meaningful stakeholder contributions to these processes.

Notes

[1] UK Joint Committee on Human Rights (2019), ‘Human Rights Protections in International Agreements, Seventeenth Report of Session 2017–19’, HC 1833 HL paper 310, 12 March 2019, https://publications.parliament.uk/pa/jt201719/jtselect/jtrights/1833/1833.pdf; and House of Commons International Trade Committee (2018), ‘UK Trade Policy Transparency and Scrutiny, Sixth Report of Session 2017-2019’, HC 1043, 29 December 2018.

[2] European Parliament and Directorate General for External Policies (2019), Parliamentary scrutiny of trade policies across the western world, study paper, March 2019, http://www.europarl.europa.eu/RegData/etudes/STUD/2019/603477/EXPO_STU(2019)603477_EN.pdf.

[3] European Commission (2019), ‘Trade policy and you’, http://ec.europa.eu/trade/trade-policy-and-you/index_en.htm.

[4] See UK Joint Committee on Human Rights (2019), ‘Human Rights Protections in International Agreements’, para 12; and House of Commons International Trade Committee (2018), ‘UK Trade Policy Transparency and Scrutiny’, paras 124–34.

[5] OHCHR (2003), Report of the High Commissioner for Human Rights on Human Rights, Trade and Investment, 2 July 2003, E/CN.4/Sub.2/2003/9, Annex, at para 63; UN Economic and Social Council (2017), ‘General Comment No 24 (2017) of the Committee on Economic, Social and Cultural Rights on State obligations under the International Covenant on Economic, Social and Cultural Rights in the context of business activities’, UN Doc. E/C.12/GC/24, 10 August 2017, para 13; and UN General Assembly (2011), ‘Guiding principles on human rights impact assessment of trade and investment agreements’, Report of the Special Rapporteur on the Right to Food, Olivier De Schutter, UN Doc. A/HRC/19/59/Add.5, 19 December 2011.

[6] European Commission (2016), Handbook for Sustainability Impact Assessment (2nd ed.), Brussels: European Union, http://trade.ec.europa.eu/doclib/docs/2016/april/tradoc_154464.PDF.

[7] Zerk, J. (2019), Human Rights Impact Assessment of Trade Agreements, Chatham House Research Paper, London: Royal Institute of International Affairs, https://www.chathamhouse.org/publication/human-rights-impact-assessment-trade-agreements.

[8] Ibid., pp. 11–13. For a detailed explanation of the EU’s approach to human rights impact assessment, see European Commission (2016), Handbook for Sustainability Impact Assessment.

[9] Zerk (2019), Human Rights Impact Assessment of Trade Agreements, pp. 14–21.

[10] Ibid., pp. 21–22.

[11] Ergon Associates (2011), Trade and Labour: Making effective use of trade sustainability impact assessments and monitoring mechanisms, Final Report to DG Employment, Social Affairs and Inclusion European Commission, September 2011; and Gammage, C. (2010), ‘A Sustainability Impact Assessment of the Economic Partnership Agreements: Challenging the Participatory Process’, Law and Development Review, 3(1): pp. 107–34. For a civil society view, see Trade Justice Movement (undated), ‘Trade Justice Movement submission to the International Trade Committee inquiry into UK Trade Policy Transparency and Scrutiny’, https://www.tjm.org.uk/resources/briefings/tjm-submission-to-the-international-trade-committee-inquiry-into-uk-trade-policy-transparency-and-scrutiny, esp. paras 23–32.

[12] Zerk (2019), Human Rights Impact Assessment of Trade Agreements, pp. 20–21.

[13] Ibid., pp. 21–22.

[14] Ibid.

This essay was produced for the 2019 edition of Chatham House Expert Perspectives – our annual survey of risks and opportunities in global affairs – in which our researchers identify areas where the current sets of rules, institutions and mechanisms for peaceful international cooperation are falling short, and present ideas for reform and modernization.

The forum aims to develop substantive and actionable policy recommendations for the future direction of global trade in a context of changing geopolitical dynamics and rapid technological transformations.

At the core of the Chatham House Global Trade Policy Forum will be the Chatham House Global Trade Conference, a series of roundtable meetings which address the range of regional and systemic trade matters, and a series of written outputs. The activities will culminate in an annual Global Trade Policy Review Briefing paper.

Our unique position in London, and as a world-leading source of independent analysis and with unparalleled convening capacity, enables Chatham House to engage with a committed network of action-oriented policymakers, business leaders, academics, and representatives from the media and civil society to develop trade policy insights. We are committed to the promotion of sustainable growth and more inclusive governance.

The forum’s work is supported by AIG (founding partner), Clifford Chance LLP, Diageo plc, and EY (supporting partners).

View our current work on International Trade and the World Trade Organization (WTO).