US president Donald Trump last week announced a fresh round of tariffs on goods coming from the EU (among dozens of other countries), ostensibly “related to the failure … to impose and effectively enforce a prohibition on the importation of goods produced with forced labour”.
The EU was hit with a 10 per cent tariff on the basis that it “impose[s] a forced labour import prohibition but do[es] not yet effectively enforce it”, whereas countries with no legal prohibition at all face a 12.5 per cent rate. For once, he has a point.
Other writers in these pages, including Jack Power and Cantillon, have pointed out that the months-long investigation by the US Trade Representative into forced labour in US trade partners is mostly a cover for the sort of performative protectionism in which Trump likes to dabble to distract from his foreign and domestic policy blunders. I find it hard to believe that the US administration – which gutted the National Labor Relations Board before appointing a tame chairperson – cares much about workers’ rights. They are using the suspicion of forced labour as a legal basis for tariffs which were struck down as unlawful by the US Supreme Court in February, but temporarily reinstated until last week. There is no reason to think these tariffs are part of a carefully considered strategy to work with unions and NGOs on the ground: this will not be a “Liberation Day” for victims of forced labour. However, the opportunism of Trump’s discovery of forced labour in EU supply chains should not distract us from the fact that, much as we might hate to admit it, he is right. The EU is soft on slave labour.
The prevalence of forced labour, modern slavery, human trafficking and other related stains on the conscience of the modern economy is notoriously hard to measure since slavery is illegal everywhere – on paper. Still, the International Labour Organisation, a UN agency, puts the number of people subject to conditions of forced labour at 30–50 million, with the profits from such exploitation topping €200 billion annually. Supply chains stretching around the globe, through a thicket of subsidiaries, shell companies and subcontractors, shield those in the boardrooms of the world’s biggest brands in fashion, manufacturing and agriculture from responsibility. There are many victims in the EU, often trafficked into forced prostitution. But the majority toil away in poor countries to put clothes on the backs, food on the tables and trinkets in the hands of oblivious European consumers.
The EU has three ways to prevent goods produced with forced labour from ending up on European shelves. First, it uses bilateral trade agreements. When negotiating with trading partners, the European Commission insists on including “trade and sustainable development” provisions which bind both sides to promote labour standards within their territories. Second, there are 65 developing countries which do not have a trade agreement with the EU, but which the EU grants conditional tariff-free access to its market in an effort to stimulate their economic development. Those conditions include adherence to international labour and human rights law.
Third, the EU has targeted laws for companies importing goods into Europe. The corporate sustainability due diligence directive (CSDDD), even after it was shamefully watered down earlier this year in the interests of “cutting red tape” for businesses, requires large companies to investigate their own supply chains and root out abuses of workers, including cutting ties with dodgy subcontractors which do not comply with international labour standards. The forced labour regulation empowers the European Commission and national authorities to seize goods which are suspected of having been produced by slavery victims before they reach the shelves; it is up to those importers to prove their supply chains are clean before they will be allowed to resume shipping to Europe.
Again, this all sounds great on paper, but even the Trump administration did not pretend the EU does not have laws against forced labour. It said the EU does not enforce its laws, and it has a point. No country has ever had a trade agreement with the EU suspended for labour abuses – the closest we got was a two-year investigation into suppression of trade unions in South Korea, which ended with earnest commitments by that government to change its laws (which it said it was going to do anyway). In the past 30 years, the EU has withdrawn access from four developing countries over labour abuses … but let two of them back in with limited evidence of changes on the ground. The CSDDD and forced labour regulation are too recent to have generated much by way of evidence either. However, last month the Commission published long-awaited guidelines on how the latter will be enforced.
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When asked why it takes such a lax approach to enforcing labour standards through trade policy, the Commission always says that it is better to work with trading partners to build up the capacity of trade unions and inspectors in those countries, than to cut off market access and leave victims isolated. There is some merit in that diplomatic approach, as a starting point. But speaking softly and carrying a stick so small it looks like a wagging finger has borne little fruit so far. Surely we are past the point of cutting sweatshops some slack? European companies are profiting from slave labour, European consumers are unwittingly complicit in it, and governments who care even less about workers’ rights than the Trump administration does are laughing at us as we fiddle around with “trade and sustainable development subcommittees”.
Ireland currently holds the presidency of the Council of the EU. We have once again dodged the worst of Trump’s tariff mania, presumably because nobody thinks slaves are being held captive in Ireland’s high-tech pharmaceutical factories. But our high street fashion and electronics chains remain part of this global scourge. These tariffs are a wake-up call to start taking the fight against forced labour seriously.
Dr Alan Eustace is an assistant professor at the school of law, Trinity College Dublin.