EU Parliament's shake-up spells tougher conditions in trade deals

The EU’s trade partners may face more stringent demands from the European Parliament in its coming five-year term when it comes to striking trade deals, after green and liberal candidates made gains at the expense of the traditional center-right and center-left groupings.

While the assembly will remain broadly in favor of free trade, the emboldened Greens and ALDE alliances may push to attach conditions to trade agreement in areas such as climate, human rights and sustainable development.

And the loss of a combined majority between the center-right EPP and center-left S&D, which together have traditionally dominated the chamber, means minority groups may now exert more influence on the lawmaking process.

This could lead to new demands in deals under negotiation, such as those with Australia, New Zealand and Latin American bloc Mercosur. It could also influence any new negotiations that may begin, or even preclude the opening of talks with human-rights abusers or countries that aren’t pulling their weight on climate issues — including the US.

Out of the 751 total seats up for grabs in the European Parliament elections, the EPP took 180, down from 221 previously. The S&D group will have 145 instead of 191, while the right-wing ECR will have 59 instead of 70.

On the other hand, liberal democrats ALDE increased their share to 109, from 67, and the Greens will have 69 instead of 50.

Green surge

The new composition of the European Parliament is likely to spur a more ambitious EU climate policy, and that could also extend to a more activist trade policy.

Besides Green lawmakers, other groups including the S&D have shifted towards a more interventionist climate policy in recent months, while senior ALDE figures were also flaunting their climate credentials in the run-up to the polls.

For example, France’s ruling En Marche party, which belongs to ALDE, has said it will oppose trade deals with parties that aren’t signed up to the United Nations Paris climate agreement, such as the US.

Talks that do begin could face pressure to include certain environmental conditions, such as asking trading partners to have an equivalent system to the EU’s Emissions Trading Scheme.

Technology transfer clauses, to enable less developed countries to improve their environmental standards, could also form part of the Greens’ demands to give their approval to trade pacts.

Protecting industry

The parliament could also turn slightly towards protectionism, due to policy shifts in the S&D and ALDE as well as a relatively strong showing for nationalist parties under the Europe of Nations and Freedom group, which picked up 58 seats.

ALDE members have said the group would exercise more general caution before signing off on a pact. For example, it could seek clauses that allow the EU to impose safeguard measures against certain products, should the bloc see a sudden surge in imports.

The group would also be interested in enhancing the EU’s monitoring of trade deals, with a view to reviewing the effects they have on domestic industry when they’re up and running.

This means the traditionally free-trading EPP and ECR may have to become more imaginative in how to successfully pass trade deals, through even more transparency and more involvement with civil society, for example.