EU-Vietnam Civil Society Statement
——–PLEASE SIGN THE CIVIL SOCIETY STATEMENT BELOW!———
The undersigned organisations from Europe (1) call on the Members of the European Parliament not to ratify the free trade and investment agreements between the European Union and Vietnam (3) that will be voted in plenary the XXX (3). These are the very first ratification votes on trade and investment agreements in the new European Parliament. They were negotiated by the European Commission under previous mandates and were signed on June 30, 2019, in Hanoi.
The European Commission presents these agreements as promoting sustainable development and ensuring a high level of protection for labour and the environment. But this is not true. The EU-Vietnam agreements do not address the urgent challenges facing the EU and Vietnam today: the reduction of inequality, the promotion of sustainable development and the mitigation of climate change. They are not compatible with a “Green Deal” that would make ecological action a real priority. On 15 January, the European Parliament voted for a resolution stating that « all international trade and investment agreements (should) include strong, binding and enforceable sustainable development chapters, including on the climate and the environment, that fully respect international commitments, in particular, the Paris Agreement ». This is not the case with these EU-Vietnam agreements.
The European Commission decided to divide the text of the original agreement into two separate ones, one trade and one on investment. This allowed them to avoid subjecting both parts [A1] to the same ratification process. The EU Commission does not want to risk a possible rejection of the trade part under national ratification procedures and wishes to speed up its final implementation.
The trade part of these agreements falls under the sole competence of the EU, and only requires ratification by the European Parliament.
- According to the European Commission, these agreements remove 99% of tariffs on goods traded between the EU and Vietnam. These measures do not take any sustainability or human rights criteria into account.
- The EU-Vietnam agreement lacks a “supremacy clause” that ensures that international human rights law, environmental and climate agreements take precedence over free trade and investment rules;
- The trade and sustainable development (TSD) chapters fail to develop the necessary ambitious joint standards or lay down concrete commitments for the protection and enforcement of international climate, environmental, labour and human rights obligations. These chapters, which are non-binding and non-enforceable, are excluded from the agreements’ dispute settlement mechanism;
- In terms of protecting human rights, the chapters on the protection of intellectual property pose an immediate threat to the availability of affordable generic medicines. The chapters fail to regulate commercial seed systems from the premise of the overarching right to food and decent livelihoods for small producers and vulnerable farming communities.
- The agreements fail to adequately regulate capital flows to avoid exposure to financial instability.
- The agreements fail to impose direct, binding and enforceable obligations on foreign investors to observe relevant recognised international standards on human and social rights or climate and other environmental policies.
- The agreements do not foresee in periodic assessments of the human rights, environmental and climate impacts of the agreement. Crucially, they lack a ‘review clause’ to review (parts of) the agreement after it has been ratified and implemented, based on regular impact studies on sustainable development and human rights.
- The precautionary principle is mentioned in Article 13.11 of the non-binding chapter on sustainable development but not in the chapter dealing with sanitary and phytosanitary rules. The EU-Vietnam agreement does not guarantee a full and complete application of the precautionary principle.
The investment part of these agreements is considered to be a mixed competence and will have to go through the relevant national ratification procedures in all Member States.
- The investment part contains far-reaching investment protections and very wide definitions of what constitutes a covered investor/investment, including portfolio investments, bonds, goodwill and IPR, enforceable through investor-state dispute settlement mechanisms (ISDS). Such wide protections are extended despite the fact that the evidence that investment protection helps attract FDI is inconclusive: Numerous studies indicate that investment protection/ISDS is rarely if ever the determining factor for investors when making the decision to invest. Such protection is extended across the board, even though not all FDI necessarily contributes to sustainable development. Research indicates that, apart from positive impacts, FDI can also have negative spill-over effects and crowd out domestic companies, create precarious jobs or reduce employment, increase income inequality, facilitate tax evasion and avoidance, and contribute to environmental degradation and pollution. This shows that it is crucial to provide for adequate mechanisms and regulations to harness FDI for sustainable development.
- Instead of including a broad denial of benefits clause, these chapters continue to protect all kinds of FDI irrespective of the nature of the investment, the behavior of the investor or the social, economic or environmental impact of the investment. For example, there is no “sustainability chapter” in the EU-Vietnam investment agreement ;
- The investment text provides no improvement to earlier agreements but instead delivers a further step in the wrong direction: the rights granted to foreign investors in the EU Vietnam investment agreement go far beyond those of the investment chapter of other agreements (such as CETA) and some of the safeguards introduced in the CETA are missing in the proposed investment agreement with Vietnam (1)
- This agreement plans that the signatory parties have to contribute to the negotiations for the establishment of a multilateral tribunal for the settlement of investment disputes. While these arrangements are deeply rejected by public opinion, a Multilateral Investment Court will further entrench a system for the settlement of investment disputes that enables transnational corporations to wield undue power over public policy-making. Do we still want to give more power to a small number of companies and investors that dominate world markets? More than 847,000 people in Europe signed a petition calling on MEPs to stop the expansion of investor-state dispute settlement (ISDS etc) (link to https://stopisds.org/ or any PR).
We are deeply concerned by the human and labour rights situation in Vietnam. While Vietnam has recently ratified the Right to Organise and Collective Bargaining Convention (No. 98), it has still not ratified two of the eight core ILO conventions, the Freedom of Association Convention (No. 87) and the Abolition of Forced Labour Convention (No. 105). Although Vietnam has announced that it intends to ratify the latter in 2020 and Convention 87 in 2023, there is no guarantee that it will do so.
In its resolution of 14 December 2017 (https://eur-lex.europa.eu/legal-content/FR/TXT/PDF/?uri=CELEX:52017IP0496&from=GA), the European Parliament itself underlines “the deterioration of civil and political rights in Vietnam”. Controlled by a single party, the Vietnam regime does not offer sufficient guarantees in terms of respect for civil liberties (freedom of expression, press, association, etc.). Police and political repression particularly affects human rights defenders, environmental activists and all those who criticise the regime. As Human Rights Watch points out, the police forces resorts to torture while the judiciary is cruelly lacking in independence. Peasants are often robbed of their land and workers are often repressed when they try to have their rights recognized. Thus, Human Rights Watch (https://www.hrw.org/news/2019/01/10/eu-postpone-vote-vietnam-free-trade-agreement) called on the European Parliament to postpone the ratification of the EU-Vietnam agreement.
Concluding trade and investment agreements under such circumstances is contrary to the fundamental principles of the EU. In 2020, can we still ratify trade agreements with countries that do not respect core human and labour rights and that do not respect fundamental freedoms? While the Commission promises a “Green Deal”, how can the European Parliament still ratify trade agreements that contribute to deepening the globalisation of trade and the increase of greenhouse gas emissions?
(1) In addition to this initiative a number of Vietnamese and international NGOs are asking the European Parliament to postpone their agreement to the EU-Vietnam agreement: https://www.hrw.org/news/2019/11/04/joint-ngo-letter-eu-vietnam-free-trade-agreement
(2) The full text of the agreement can be found here: http://trade.ec.europa.eu/doclib/press/index.cfm?id=1437
(3) For example, Art. 2.5.6 of the Vietnam text, that is missing in CETA, creates a new legal loophole that significantly widens the scope for investors to bring claims to arbitration: Similarly, the scope of art 2.5.4 in the Vietnam text is wider than the same article in CETA (there it is Art. 8.10.4). Some of the safeguards introduced in the CETA text, like Art.8.10.7, are missing in the proposed investment agreement with Vietnam
Please sign now!