When Internal Politics Meet External Duties: Domestic Law in the Trade and Sustainable Development Chapters and How the Retreat of EU Environmental Law Is Breaching Its Bilateral Obligations

This article critically examines the European Union’s (EU) Trade and Sustainable Development (TSD) chapters in its Free Trade Agreements (FTAs), focusing on obligations related to domestic environmental and labour protection laws. While the EU presents itself as a global leader in sustainable development, recent regulatory regression in EU environmental legislation, such as delays to the Regulation on Deforestation-free products (EUDR), the watering down of the Nature Restoration Regulation, and changes introduced through the Omnibus Package to boost competitiveness, casts doubt on the coherence between its internal policies and external commitments. This tension raises legal questions concerning the EU’s compliance with its bilateral TSD obligations. Notably, sustainability obligations under FTAs concluded since 2011 have been largely absent from internal debates on these developments. Central to the analysis are two core provisions present in all EU TSD chapters to date: ‘Right to regulate and levels of protection’ and ‘Upholding levels of protection’. Although these provisions aim to safeguard domestic environmental and labour standards, their content and legal implications vary across FTAs and remain underexplored. Through comparative textual analysis grounded in the Vienna Convention on the Law of Treaties, the article categorises and clarifies these obligations and examines their relationship. It then assesses whether recent EU legislative and policy regressions may amount to breaches of its own TSD commitments. The analysis reveals a structural disconnect between the EU’s external normative ambitions and its evolving internal policy landscape, highlighting the need to reconsider the EU’s dual role as both norm-setter and norm-follower in the global sustainability regime.