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Free trade agreements

September 26, 2016

When free trade agreements are concluded between the EU and third countries, the Federal Ministry of Labour and Social Affairs works to ensure that a balance is struck between good economic cooperation and the protection of our workers’ rights and social standards.

A port reflected in a building’s glass facade
Source:  iStock

Global trade in goods and services requires rules. In the EU, trade in the European single market is regulated in a way which ensures that barriers between the Member States are eliminated in practice and that fair conditions nonetheless prevail, including for workers. The EU’s free trade agreements serve to lift many trade barriers, such as customs duties or varying product approval rules, in relation to the rest of the world as well. A fair and sustainable trade policy does so while ensuring that standards of protection, for example in the field of health and safety at work or social security for workers, are not reduced and can still be freely regulated in future – a key objective for the Federal Ministry of Labour and Social Affairs in relation to trade policy. We want free trade agreements which boost growth and employment while preserving European standards of protection.

The European Commission negotiates trade agreements with trading partners within the bounds of a concrete mandate established by the Council of trade ministers. In this mandate, the Member States jointly set out the objectives and limits of a potential agreement. Within the Federal Government, the Federal Ministry for Economic Affairs is the lead ministry for implementing the German position vis-à-vis the Commission, and it monitors and supports the negotiations. The Federal Ministry of Labour and Social Affairs is involved in all matters relating to the preservation of workers’ rights and social standards at national level. This applies, for example, to measures relating to health and safety at work or the protection of social services, but also to the integration of international rules on worker protection.

In the negotiations on the trade agreements with Canada and the United States (CETA and TTIP), one priority is compliance with key conventions of the International Labour Organization (ILO), a specialised agency of the United Nations. We want to implement elements of these conventions in the agreements with Canada and the United States, especially the ILO’s eight core labour standards, which have been signed by all 28 Member States. This addresses an important spectrum of worker protection, and also sends a signal for future trade agreements. The agreements are intended to be a model for fair trade which takes place under fair labour and social conditions. Production by our trading partners should not fall short of internationally applicable standards. In the case of both CETA, the Comprehensive Economic and Trade Agreement with Canada, and TTIP, the Transatlantic Trade and Investment Partnership with the United States, the Federal Ministry of Labour and Social Affairs is working to ensure that these aims are met.

After negotiations are completed, the agreement is signed and ratified by the parties in accordance with international law, i.e. it is incorporated into EU law. If the contents of the agreement also touch on the Member States’ competences, rather than relating solely to EU trade policy, the parliaments of the Member States must also be involved in the process.