Improving consistency between trade and human rights

by | Apr 11, 2021 | Human Rights Impact Assessment

It is perplexing to observe how often States ignore their international legal commitments in one area of law when making rules in another.

An area in which this is repeatedly plays out is trade policy: States tend to ratify new trade agreements with little heed for their human rights obligations.

Human rights impact assessment has been put forward as a tool for improving consistency between trade law and other legal commitments, including those designed to achieve the sustainable development goals (SDGs) or to protect human rights.

Mauritius, human rights and services trade liberalization

An article just published in the African Journal of International and Comparative Law illustrates ways that a human rights-based approach to economic policy-making can result in outcomes from trade negotiations that are not only human rights-consistent but also more politically, socially and economically robust.

The article reports on an assessment of potential human rights impacts of the Trade in Services Agreement (TiSA) for Mauritius. The article details the analysis of the trade–human rights links in three areas: services trade liberalization and the right to water, the right to work, and the underlying question of transparency and the right to participate in trade negotiations. The article presents the impact assessment’s findings and formulates recommendations for human rights-consistent trade policy. Even though TiSA negotiations have been discontinued, the findings and recommendations are applicable to trade policy-making in other areas and for other countries.

The devil’s in the (de)regulation

Trade agreements these days tend to devote more space to eliminating barriers to trade posed by countries’ domestic regulatory frameworks than on reducing tariffs or abolishing the more traditional, at-the-border trade barriers such as quotas. In cross-border trade in services measures and regulations like limits on foreign ownership, licensing requirements, environmental, labour or quality standards, financial regulations or universal service obligations are considered potential “barriers” to trade, irrespective of the public purpose of these measures, or any actual limits they might pose on trade.

Many civil society groups in Mauritius were worried that liberalization would undermine public services, such as provision of drinking water. The government consistently reiteated that the Mauritian services market is already liberalized and thus TISA would not make much difference. The article unpacks these arguments and describes how it is less the proposed liberalization aspects of TiSA that give cause for concern than its deregulatory aspects. A related risk for the Mauritian government’s ability to continue to fulfil its right to water obligations lies in the ongoing lack of clear understanding of the scope of standard public services-related legal exceptions in trade in services instruments.

signs indicating contractors for Mauritius Central Water Authority pipelaying
Water-related services are already open to competition

The article recalls that what TiSA refers to as the right to regulate is in fact a duty to regulate under human rights law. Human rights is neutral with respect to political or economic models, but clearly affirms that the State is the primary duty bearer and remains responsible for effective regulation of private actors.

The deregulatory aspects of the TiSA Agreement are now being negotiated in the World Trade Organization amongst other international trade fora. As these could limit governments’ ability to regulate in the public interest in the future, the article’s analysis and recommendations have ongoing relevance.

Little right to work impact

One of Mauritius’ offensive interests in the TiSA negotiations was to secure access to other TiSA countries’ labour markets through the so-called “Mode 4” commitments, that facilitate labour migration for people providing services. One of the main fears amongst TiSA opponents in Mauritius was that it would increase competition for jobs between non-Mauritians and nationals, and put downward pressure on labour standards.

The article considers both these arguments in detail. Its analysis shows that service trade agreements are not promising avenues for Mauritian jobseekers wanting to work abroad; evidence from other agreements clearly indicates that Mode 4 has very limited impacts on labour migration.

Similarly, the article concludes that TiSA was unlikely to lead to significant increased movement of low-skilled workers to Mauritius from countries that have lower labour standards. As for skilled workers, Mauritius’ TiSA proposal included various measures in their favour, for instance, that Mauritians must make up at least half of the professional staff of foreign establishments in the software and database services sectors.

Overall, the assessment’s findings reported in the article suggest that the main issues relating to the right to work relate to broader labour market policies on which TiSA would have little impact, including positive factors such as the recently introduced minimum wage and challenges such as the skills mismatch and regular reports of severe abuse of migrants’ labour rights.  

Bridging perception gaps; ensuring inclusive trade; strengthening democratic debate

The impact assessment demonstrated that the risks touted by TiSA opponents turned out to be largely unfounded, that the agreement would have been unlikely to yield the benefits that the government and other proponents were putting forwards, and that it posed risks that neither proponents nor opponents had previously flagged.

This points to a first way in which human rights impact assessment (HRIA) can be valuable. Rigorous and dispassionate legal analysis of proposed new laws can – and often do – reveal unexpected risks or opportunities of an agreement under negotiation. Fact-based legal analysis can help those involved in trade policy – as negotiators or outside critics – progress beyond entrenched positions. In offering them the opportunity to engage with unexpected risks HRIA provide negotiators with the knowledge basis from which they can craft trade rules that are politically robust as well as rooted in the interest of a broad range of stakeholders within the country.

This leads to a second way that the human rights legal framework can usefully guide trade policy: it directs attention to sectors within a country that may be overlooked in economic policy-making. HRIA seeks to reflect the experiences of vulnerable individuals and groups. Moving beyond aggregate expected benefits of trade reforms and paying attention to differential impacts and particularly those that can affect the most vulnerable or marginalized sectors of the population is central to a human rights approach. Economic modelling almost always overlooks this differential aspect, whilst human rights requires it.

HRIA can contribute to legal and policy coherence in other ways too. We will mention but one more here – the third mentioned in this piece’s title – which is that it can help build knowledge about trade beyond the trade community. Trade negotiations are complex but their outcomes impact the simple things that make up day-to-day life. In Mauritius as in most countries, few stakeholders beyond large business actors and a few governmental ministries participate in trade policy formulation. The process of publicly considering the objectives and possible impacts of trade policy will stimulate open democratic debate and lead to better understanding of the channels through which trade and trade policy can affect daily activities.

This piece appeared on 6 May 2021 on the Edinburgh University Press blog.

The full article, entitled Applying the Human Rights Framework to Economic Policy: Insights from an Impact Assessment of Services Trade, was published in the February 2021 issue of the African Journal of International and Comparative Law.


1 Comment

  1. Taonga

    Thanks, on point.


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