Thread by @fbermingham

EU DG trade @WeyandSabine has just presented to the @EP_Trade committee on a proposed forced labour ban, which would of course have serious impact on China, given issues in Xinjiang.

Some takeaways 🧵

Weyand and EC seem keen to avoid the US model, which combines product-based bans with origin bans.

So in the case of Xinjiang, cotton products linked to Xinjiang, and also just Xinjiang products in general.

scmp.com/news/china/art…

She described this as "ineffective".

The "rebuttable assumption" places "a heavy burden" on the importer, which has to prove that it has no traces of forced labour in any product it imports that may have connection to the region and its cotton + other goods

These bans and withhold release orders (WROs) can also be circumvented by diversion of trade via third locations or through new companies, which as seen with the US case, can create an administrative nightmare for customs.

Weyand cited US customs' own testimony to that effect

This is particularly tricky with something like Xinjiang cotton - 80% of China's cotton or 20% of global supply.

It's *everywhere* in Asia supply chain. Weyand compared forced labour in the supply chain as a drop of pastis in a glass of water: "one drop taints the whole glass"

So how do you trace that?

For EC, it needs, therefore, to be linked with the EU's incoming supply chain due diligence legislation she suggests - but big divide on this issue. Many influential voices in EP think that there should be a separate forced import labour ban.

Weyand says if you want a separate ban, it needs to be started from scratch, with new impact assessments, and could take even longer to get it ready.

"We're working to make sure that we do not have to start from scratch on a proposal which is intimately linked."

Due diligence law would "oblige companies to implement due diligence procedures to identify, prevent, mitigate and account for the risk of human rights violations in their value chains."

When not followed, firms would be banned from marketing their products within the EU

This would also mean that companies are required to have the visibility of their supply chains that be a precursor to noticing any forced labour in their value chains, she said.

Furthermore, a marketing ban for companies who have not conducted due diligence rather than an outright import ban "escapes from the reproach of being a disguised protectionist measure or discriminatory measure", Weyand said.

Again, huge divide on whether to combine forced labour ban with supply chain due diligence legislation, which was due to be unveiled on Feb 15, but Weyand would not confirm timing.

. @kvanbrempt of the S&D group reminded Weyand that progress on other items of the EU trade agenda is dependent on these social & labour issues being resolved. This includes free trade agreements.

Weyand also noted a report that 80% of forced labour products are not traded internationally, but domestically. In 2016, ILO estimated 25 million people globally used in forced labour, 1 million of those in the EU. The point being, would an import ban solve this issue?

This was rebutted by Green MEP @anna_cavazzini

"The question of forced labour within EU should not be an argument [against] a proper import ban on forced labour"

The EU has "other instruments in place e.g., labour rights, labour legislation, and so on, to combat forced labour"

Pro-biz members of the EP are keen to exempt SMEs from any ban on forced labour goods.

Weyand seems to concur: they will be in the supply chains of bigger companies anyway, and will be forced to comply in that way.

.@BarryAndrewsMEP @RenewEurope said it should be risk-based.

If you're in a high-risk sector (eg mining, fishing), you should comply regardless of size. Said it is "unacceptable" that this be applied on a sliding scale (I think German supply chain model has an even higher bar)

In summary, a lot of frustration among @EP_Trade members with the speed of progress, the lack of transparency from the commission.

Also division on whether there should be a separate forced labour ban, or an overall package that covers supply chain due diligence.

One final point here: the tussle between the DGs.

If DG Trade get their wish and bundle the forced labour ban into the supply chain due diligence legislation, it'll be managed by DG GROW & JUST. Therefore offloading a potentially messy and burdensome function to other depts