In a move that could provoke trade strain with China, the European Union (EU) have decided to prohibit goods created through forced labour. The arrangement, finalised on Tuesday, sets out that Brussels will supervise potential forced labour incidents worldwide and confiscate and dismantle goods that contravene the ban.
In 2022, the US prohibited all imports from Xinjiang amidst allegations that Beijing is compelling Uyghur Muslims into labour. The EU imports a significant number of solar panels from this region, and Volkswagen has a car manufacturing plant established there.
Despite denial of any misconduct from Volkswagen, an examination is currently ongoing in response to media claims that its joint venture exploited forced labour to construct a test track. Human rights organisations suggest that in recent years, more than 1 million Uyghurs and other Muslims have been incarcerated, with thousands said to have been relocated from the region to work in factories.
Belgium’s Deputy Prime Minister, Pierre-Yves Dermagne, who currently holds the EU’s rotating presidency, expressed shock at the continued existence of slavery and forced labour in the 21st century. He stated that the abolition of this heinous crime begins with dismantling companies that take advantage of their workers.
The agreement awaits final endorsement from the member states and the European Parliament. The EU conveyed that China could not be solely targeted due to the possibility of contravening World Trade Organisation’s anti-discrimination regulations.
However, Anna Cavazzini, a German Green party member who is also the Chair of the European Parliament’s internal market committee, expressed that the suffering of individuals from forced labour worldwide, including in places like Xinjiang, will now come to an end. She further mentioned that the EU is preparing to leverage its market power to counter forced labour worldwide.
Recently, the EU has escalated actions against China owing to the record-breaking trade deficit. It has initiated an inquiry into electric vehicle imports, which could result in levies, and launched its first action using new anti-subsidy powers. This could possibly lead to the denial of a train manufacturer’s contract in Bulgaria.
The International Labour Organisation reported that in 2021, an estimated 27.6 million people were involved in forced labour, with 17.3 million in the private sector, 3.9 million exploited by governments and 6.3 million as sex workers.
The European Commission intends to create a database that will monitor and catalogue forced-labour risks across different regions and sectors. This tool will be used to identify products that require investigation. A temporal consensus has laid down the actions that warrant intervention, endowing Brussels with broad discretion in instigating inquiries into non-EU nations. Investigations would only be initiated given a significant quantity of goods involving widespread forced labour. Confiscated items may either be donated to charities, recycled, or destroyed.
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Upon determination that a “critical product” has been produced using forced labour, the company would be compelled to withdraw the product from the market until it can confirm the eradication of forced labour from its production process.
In cases where only a component of a product is involved – for example, a car part – that individual part is destroyed, as opposed to the whole car. This tactics was made evident when the US confiscated thousands of Volkswagen vehicles after a supplier identified a Chinese subcomponent in the vehicles that violated its anti-forced labour regulations.
Dutch Liberal MEP Samira Rafaela, who was involved in moulding the proposal, hailed the legislation as “ground breaking.” She believes it represents a significant stride towards promoting fair trade and purifying supply chains, while maintaining an emphasis on human rights.
Now, legislators are racing against time to finalise and vote on the deal before the EU elections in June. Thereafter, a new commission will take office following a six-month break. Fears linger that certain governments may attempt to dismantle the deal, echoing a scenario where Germany and others recently sabotaged a law aimed at purifying supply chains after a preliminary agreement.
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