Brexit: Opportunity for UK to Promote Human Rights in Free Trade Agreements

6 Feb 2023 02:37 PM

A new briefing from the Business and Human Rights Resource Centre (BHRRC) calls on the UK to make good on its opportunity to promote and protect human rights as an independent trading nation post-Brexit. This comes as the UK FTAs made since leaving the EU have fallen short regarding human rights and sustainable development.

BHRRC Recommendations

In April 2022, the BHRRC published its four tests for new UK trade deals which would deliver desirable outcomes on human rights.

UK Performance

The BHRCC measures UK performance against their four tests. There are 5 Trade Agreements and a Category of ‘currently under negotiation’ FTAs:

Agreed

• EU-UK Trade and Cooperation Agreement
• UK-Japan Economic Partnership Agreement
• UK-Australia Free Trade Agreement
• UK-New Zealand Free Trade Agreement

Committed

• CPTPP
• FTAs currently under negotiation (Future FTAs)

Test 1: Agreements should contain enforceable human rights conditions.

The UK is performing poorly on this test with no enforcement provisions in the UK-AUS or UK-NZ trade deals. The UK has not expressed any plans to make future FTAs conditional on human rights protections either.

On the UK-JAPAN trade deal there is an enforcement mechanism on human rights protections, but it is assessed as ‘weak and ineffective’. The UK-EU T&CA contains a ‘non-regression’ agreement on labour rights, but enforcement is only subject to ‘trade affecting’ rights violations.

The CPTPP contains a TSD chapter with some commitments to human rights and labour rights, however, they are unenforceable. The TA also includes a labour chapter, but enforcement is deemed weak in this area.

Recommendations:

• UK should publish a strategy making clear its commitment to signing FTAs only with countries which have ratified and effectively implemented international human rights conventions (UN and ILO)
• Negotiate FTA which commit each party to upholding human rights and labour rights
• Include an enforcement mechanism in all FTAs which allows for trade sanctions if either party fails to satisfy these commitments.

Test 2: Agreements should be subject to an independent human rights risk assessment.

For the four agreed FTAs, the UK failed to conduct a human rights and environmental impact assessment. The UK has also failed to commit to conducting these assessments in the CPTPP or other FTAs in future. This is deemed highly inadequate by the BHRRC.

Chatham House suggests that although Human Rights and Environmental Impact Assessments should be conducted and published in advance of the signing of an FTA, retrospective analysis is also critical. This would better position the UK in future trade agreement negotiations.

Recommendation:

• The UK should Commission independent human rights impact assessments of all FTAs, both in advance of signing and on a retrospective basis

Test 3: Agreements should contain enforceable human rights obligations on businesses and investors.

On this test the UK has, like Test 2, failed across the board. This goes for all agreed trade agreements and there is nothing to suggest engagement on enforcement for businesses and investors in those FTAs under negotiation.

Recommendations:

• Explore options for including a USMCA-style "Rapid Response Mechanism" in future FTAs.
• Introduce import controls to prevent goods produced as a result of forced labour from entering the UK market.

Test 4: No Investor-State Dispute Settlement

ISDS mechanisms can undermine the goals of responsible business chapters of FTAs. They allow cvorporations to sue states for loss of profits related to human rights or environmental components of sustainable development chapters.

The EU-UK T&CA has no ISDS which is considered to be a big positive for the UK’s action on human rights. The other trade deals are complex, due to the interactivity between independent FTAs between the UK and Japan, Australia and New Zealand, and the parties collective involvement in the CPTPP.

Agreed, independent FTAs with these countries do not contain ISDSs, however, if the UK becomes signatory to an agreed CPTPP, they will be subject to an ISDS with each other country in the agreement. To avoid this, the UK could negotiate ‘side letters’ with other signatories to avoid this.

The BHRRC stress the opportunity that the UK has in showing leadership on human rights and environmental provisions in Free Trade Deals, currently being undermined by a lack of concrete trade principles on these subjects.

techUK works with the Department for International Trade’s Domestic Advisory Group on Trade and Sustainable Development, examining how best to leverage the UK’s values in existing and future trade agreements, including those listed in this article.

If you would like to know more about this, please get in touch with Craig.Melson@techUK.org, or Adam.Young@techUK.org. Our Responsible Business Conduct Working Group examines these issues regularly and invites external stakeholders to consult with the UK tech community to progress responsible business in a manner conducive with our values and responsibilities to the sector.