On the EU trade conditionalities
Question:
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Discuss the issue of human rights and democracy conditioning within the EU’s trade agreements since the mid 1990s: What are the advantages or disadvantages of these conditionalities? Please give concrete examples.
Answer:
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From the early 1990s, human rights, democracy, and later also governance considerations, became increasingly important determinants in the European Union’s external relations as a whole. The Community, at a breathtaking pace, formulated a large number of specific human rights and governance-related conditions and criteria for its development assistance and trade policies.
Firstly, the various Community Regulations that set the legal framework for development cooperation gradually came to include specific references and procedures for taking up human rights and democracy concerns. Examples include the regulations on financial and technical assistance to developing countries in Asia and Latin America (ALA), and on the Generalised System of Preferences (GSP). Secondly, throughout the 1990s a regular stream of Council of Ministers’ resolutions and Commission documents defined the Community’s understanding of certain human rights-related terms and concepts, or further specified Community priorities and criteria. Thirdly, more and more often during the 1990s the Community resorted to the application of sanctions against developing countries that it deemed to have disrespected human rights, democracy or governance norms.
Since 1988, the EU has punished the non-EU countries due to violations of HDRG by aid suspension or trade embargo (For the list of countries see Smith, 1993, pp.205-208). More than 50% of EU sanctions are related to human rights and democracy (Kreutz, 2005). The most significant example of EU’s conditionality is the ‘human rights clause’, which is supposed to be incorporated in all cooperation and association agreements. Since 1995, over twenty agreements have been signed that contain the human rights clause and applies to over 120 countries (Smith, 1993, pp. 111-112).
The main reason of the emergence of human rights regime in the EU foreign policy is the presence of regional supranational institution and international non-governmental organizations (INGOs), among others European Court of Human Rights*, European Court of Justice**, European Parliament, European Commission and Amnesty International. They are successful in establishing the strongest human rights regime in the world.
The regime is spilled-over and exported to other part of the world through trade and development because the EU is a major economic power. The EU is the biggest aid donor in the world which nearly three times US’ official development aid (OECD, 2007). It was the ECJ that had led the way in interjecting human rights into EU proceedings and some observers thought that the court might rule on foreign policy decisions in the future (Forsythe, 2000, p.123). Ensuring human rights protection and democracy in the non-EU countries can also help the EU to achieve stability and peace in the European continent and in the world. The most concrete examples are the EU’s policy in enlargement and European Neighborhood Policy (Hettne, Söderbaum and Stålgren, 2008, p.29-30).
However, conditionalities have some probable negative impact toward the EU. The member states must ensure the source of funds for paying the countries who successfully implement the conditionalities. Mostly the funds comes from individual taxpayer or companies and European leaders have to arrange the budget allocation accordingly. In the case of British accession to the EU, for example, British leaders accuse that the Lome convention favored French system too strongly, as a survey by the Overseas Development Institute later in 1970s confirmed, criticizing the excessive share of the European Development Fund (EDF) tenders taken by French companies (Dimier, 2006, p. 270).
In the case of sanctions, there are also big fear of some EU companies of losing markets and revenues from the target countries. In Burma/Myanmar, for example, the EU canceled the plan to impose investment ban to the autocratic country because the possible negative consequences to Total Oil, the French energy company who is the biggest European investor in Burma/Myanmar (Robertua, 2008).
It is imperative to consider the effectiveness of the sanction because there are big possibilities that the sanctions will hit badly the poor and the marginalized. Structural adjustment is one of the conditionalities imposed by the EU, World Bank and IMF to recipient countries. During the 1990s, inflation targets and fiscal limits were imposed to government spending, donors suggested the retirement of funds from public services and social expenditure, which had a great impact on the most vulnerable populations, particularly on women and girls. Many country experiences have shown the negative impact of the SAPs fostered by the World Bank during the 90’s; the so called “necessary evil” recognized by the World Bank was in fact the worsening of the living conditions of the populations. (Sandoval and Dede, 2008, pp.37-40).
It is also imperative to see on how far the trade sanction violate international law. For example, the integration of human rights and democracy considerations into development cooperation are relatively clear and enjoy solid legal definition and status. Good governance, on the other hand, lacks international legal definition and is perhaps not an international legal principle at all. Rather than drawing conclusions from this situation and changing its policy to a less pushy one on governance aspects, the Community has now engaged in strong efforts to legalise its unlawful practice by attempting to incorporate detailed good governance provisions in newly negotiated cooperation agreements (Arts and Dickson, 2004, pp.9-10).
In the target country side, EU trade conditionalities will make them losing their part of sovereignty. It is very important because conditionalities can be considered as the new and soft imperialism. Farell (2005) argues that Cotonou Agreements reflects the neo-liberal economy and human rights commitment that became disguise for the strategic pursuit of material interest in Africa of its markets, natural resources and minerals.
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