Sustainable development in EU trade agreements

According to the rules in the EU's trade agreements, the EU and its trade partners must:

• effectively implement international labour conventions and environmental agreements, including:
  • respect of core principles of the International Labour Organization (ILO), and;
  • effective implementation of the Paris Agreement on Climate Change.
• protect the regulatory space, reserving the right to be more ambitious;
• effectively enforce their environmental and labour laws;
• not deviate from environmental or labour laws to encourage trade or investment, and thereby prevent a 'race to the bottom';
• sustainably trade natural resources, such as timber and fish;
• combat illegal trade in threatened and endangered species of fauna and flora;
• encourage trade that supports tackling climate change;
• cooperate for a shift to a circular and resource-efficient economy, and deforestation-free supply chains, and;
• promote practices such as corporate social responsibility.

The EU also mainstreams sustainability throughout its trade agreements to:

• prioritise the liberalisation of goods and services;
• liberalise trade in raw materials and energy goods for the climate transition;
• promote sustainable public procurement, and;
• remove barriers to trade and investment in renewable energy.

EU trade agreements in force with the following countries include rules on Trade and Sustainable Development (TSD):

• Canada – Chapters 22, 23, 24
• Central America – Title VIII
• Colombia, Peru, and Ecuador – Title IX
• Georgia – Chapter 13
• Japan – Chapter 16
• Kenya – Annex V
• Moldova – Chapter 13
• New Zealand – Chapter 19
• Singapore – Chapter 12
• South Korea – Chapter 13
• Ukraine – Chapter 13
• United Kingdom – Chapters 6, 7, 8
• Vietnam – Chapter 13

EU trade agreements with the following countries/regions include rules on TSD and are awaiting ratification:

• Chile – Chapter 26
• China – Section IV
• Mercosur – TSD Chapter
• Mexico – TSD Chapter

In ongoing trade negotiations with the following countries, the EU has proposed provisions on TSD:

• Australia – proposed TSD Chapter
• Eastern and Southern Africa (ESA 5) – proposed TSD Chapter
• India – proposed TSD Chapter
• Indonesia – proposed TSD Chapter
• Thailand – proposed TSD Chapter

Other EU agreements with sustainable development commitments adapted to the more restricted scope of the agreements:

• Armenia Comprehensive Economic and Partnership Agreement (CEPA) – Chapter 9 – in force
• Angola Sustainable Investment Facilitation Agreement – Chapter V – in force
• Kyrgyzstan Enhanced Bilateral Partnership and Cooperation Framework (EPCA) – Chapter 10 – awaiting ratification
• Uzbekistan Partnership and Cooperation Agreement (PCA) – Chapter 9 – awaiting ratification
• Tajikistan EPCA – negotiations ongoing
• Azerbaijan EPCA – negotiations ongoing

How it works in practice

The EU meets its partners regularly to discuss how they and the EU are implementing TSD commitments in the trade agreement between them.

Member States are regularly informed via the Trade and Sustainable Development Expert Group. The expert group is comprised by representatives from relevant national authorities and from the European Commission.

Reports from the Commission Expert Group on Trade and Sustainable Development meetings

If Member States or EU civil society representatives consider that TSD commitments in trade agreements are being infringed, they may lodge a TSD complaint with the Single Entry Point. The Commission services will examine the allegations and consider the most appropriate course of action in that respect. They will remain in close contact with the complainant throughout the process. In 2022, the Commission presented updated operating guidelines for the Single Entry Point, making it easier for civil society to lodge complaints regarding violations of sustainability commitments, with corresponding timelines that the Commission follows as a general rule when treating TSD complaints.  

Domestic advisory groups (DAGs) in the EU and partner countries bring together environmental, labour, and business organisations to discuss and advise on the implementation of parts of or the entirety of EU trade agreements. The External Relations Section within the European Economic and Social Committee acts as secretariat of EU DAGs.

More information on domestic advisory groups and related meetings

Trade and Sustainable Development review 2022

On 22 June 2022, the Commission adopted its 'Communication on the power of trade partnerships: together for green and just economic growth'. This was the result of the Trade and Sustainable Development (TSD) review of the 15-point action plan for improving the implementation and enforcement of TSD chapters in trade agreements, announced in the Trade Policy Review communication of 2021.

The Communication identifies how to enhance the contribution of EU trade agreements to promoting the protection of the environment and labour rights worldwide. It fosters shared ownership by all EU institutions and Member States to achieve concrete change.

The Communication identified actions across six policy priorities:

1. The need to be more proactive in cooperating with partners;
2. Stepping up a targeted and country-specific approach to TSD;
3. Mainstreaming sustainability beyond the TSD chapter of trade agreements;
4. Increasing monitoring of the implementation of TSD commitments;
5. Strengthening the role of civil society, and;
6. Strengthening enforcement by means of trade sanctions as a measure of last resort.

Corresponding to the EU’s commitment to engage in a transparent way with citizens and stakeholders, the Commission launched on 23 July 2021 an open public consultation to gather input on the key aspects of the review. The responses received informed the review process and helped the Commission to formulate the direction of EU TSD policy.

Additionally, the Commission’s services launched an independent study, published in February 2022, which maps and compares different approaches to TSD adopted by a number of EU trade partners.

Implementation of the Trade and Sustainable Development review

The Commission has been implementing the TSD review and working on the above-mentioned identified actions, as appropriate, in recently concluded agreements, agreements already in force, and agreements under negotiation. For example, since the TSD review, the EU has concluded new agreements with three partner countries with the most advanced sustainable development commitments so far: New Zealand, Chile and Kenya; all in a targeted and country-specific manner.