JOINT STATEMENT 
Ukraine – EU Trade and Sustainable Development Sub-Committee 
to the Joint Civil Society Forum 
(28 October 2021) 
Representatives of the Ukrainian authorities and the European Commission held the fifth Trade and Sustainable Development (TSD) Sub-Committee on 28 October 2021 (via videoconference Brussels-Kyiv), dedicated to the implementation of the TSD Chapter of the Ukraine – European Union Association Agreement. 
On 29 October 2021, the parties will debrief the Civil Society Forum on the issues discussed during the last meeting of the TSD Sub-Committee. 
The 5th meeting of the Trade and Sustainable Development Sub-Committee discussed in depth institutional issues such as the establishment of an expert group, labour issues, climate change, renewable energy, energy efficiency and sustainable forest management and related wood production, marketing and trade in the context of TSD.
The parties discussed progress on the issues covered by the TSD sub-committee. The EU furthermore emphasised the role of values and principles, such as high social and environmental standards, as well as fairness and transparency in the context of the EU trade and investment policy. The EU highlighted the importance of reinforcing multilateral governance in these areas, through supporting the International Labour Organization (ILO) and multilateral environmental bodies. The parties also agreed that enabling civil society and having their voices heard are important for the effective implementation of the TSD Chapter. 

Progress on selection of candidates for the Group of Experts 
The TSD Sub-Committee agreed to defer the decision establishing the Group of Experts with expertise on the issues covered by the TSD Chapter, in accordance with Article 301(3), to Q2 2022 to include 15 members after the fulfilment of the necessary procedural steps by both Parties. Ukraine has launched a call for interests to nominate five candidates, after one of its previous candidates proved no longer eligible. 

Trade and labour 
The EU underlined that good governance of labour relations and improved labour standards are key to establish a level-playing field and to allow Ukraine to fully reap the benefits of its Association Agreement with the EU. 
The parties noted the necessity to bring the Ukrainian legal framework in line with and implement ILO standards, including on labour inspection as a cross-cutting issue for all labour standards. 
The EU side supports Ukraine’s intention to reform the labour inspectorate in line with the requirements of ILO conventions № 81 and № 129, and emphasised the importance of effective labour inspections, including as regards child labour. The EU expressed concerns about persisting legal restrictions to the activities of the State Labour Service and called on Ukraine to remove them in the context of updating laws, to bring them in line with related ILO conventions. The EU took note of efforts in improving the functioning of the Labour Inspectorate (SLS), but recalled the need to secure adequate capacity (staff, budget). 
The EU welcomed the preparation of the National Action Plan on Undeclared Work for 2021 with the support of the EU-funded ILO project and enquired about further plans to address undeclared work.
The EU also took note of efforts made to address wage arrears and enquired about envisaged plans to complement ratification of ILO Convention 173 in order to establish a wage guarantee mechanism. Wage arrears are a longstanding and massive issue, going against workers’ basic rights and further. More comprehensive and decisive action is needed for a sustainable solution.
The EU and Ukraine noted the positive contribution of the EU-funded ILO project ‘Towards safe, healthy and declared work in Ukraine’. The parties stressed the importance of taking into account its recommendations in the preparation of draft laws on labour relations, occupational health and safety and labour inspections.
The Parties agreed on the need to modernise labour legislation. Ukraine informed on its new legislation that aimed to rectify some aspects of discrimination in labour relations as well as gave overview on legal approximation of the employment-related EU acquis. Ukraine also expressed interest in reviewing the Annex XL to Chapter 21 of the Association Agreement by changing the repealed Directives for the new ones. The EU side expressed concern about current draft laws on labour relations and stressed the need to ensure their alignment with applicable EU directives and ILO conventions and to develop legislation in due consultations with social partners, through a participatory process. 
The parties agreed on the need to improve social dialogue. Ukraine informed about cooperation with trade unions, and their organizations, as well as associations engaged in social dialogue within the framework of tripartite and bilateral bodies. The EU recalled the discussion in the previous TSD sub-committee regarding the draft law on trade unions (#2681) and took note of the suspension of work on this draft. The EU side also enquired about several pending draft laws pertaining to social dialogue and collective bargaining as well as the draft law on trade union property. The EU stressed the importance of compliance with ILO conventions on freedom of association and collective bargaining. 
Ukraine supports the need to carry on its process of reforming the laws in line with relevant ILO conventions and referred to (advising on) pending legislation in Parliament.

Sustainable forest management and related wood production and trade
Ukraine and the EU reiterated the importance of sustainable forest management;  the forest –based sector and related trade. Ukraine presented the main developments towards ensuring the legality of harvested wood and the timeline for the Ukranian Forest Strategy to be adopted by the end of 2021. The parties reiterated the principle that a system for a robust forest control and inspection body/ies should be independent from the State Forest Resources Agency and wood harvesting activities; and be referred to the Ministry for Environmental Protection and Natural Resources. Forest policy development is to be with the relevant Ministry.  The EU will propose to the EUTR/FLEGT Expert Group the invitation of Ukraine as a third country participant, so Ukraine can present developments on its side with regards to sustainable management of forests, as well as efforts against illegal logging.

Climate Change, Trade and renewable energy 
The parties discussed the importance of the commitments under the Paris Agreement on climate change. The parties noted the importance of nationally determined contributions (NDCs) and the strategy to implement them. Ukraine expressed concerns on compatibility of the European Commission’s CBAM proposal with WTO rules and rules of the Ukraine-EU Association Agreement. Ukraine as well highlighted that in its opinion there is no evidence of actual or eventual carbon leakage from the EU to Ukraine. The EU explained that new initiatives regarding climate action are climate oriented, non-discriminatory and in full compliance with WTO rules and other international obligations.  
The parties reiterated the importance of the energy sector to sustainable economic growth in Ukraine for the environment, the climate and Ukraine’s security. Ukraine informed about further measures taken in the field of energy efficiency and renewable energy sources, including eco-design and energy-labelling measures
Other issues 
The parties agreed to finalise the operational conclusions that summarise the steps to be undertaken by the parties until the 6th TSD Sub-Committee by 29 October 2021. 
The parties encourage their respective Advisory Groups to actively engage with civil society at large to monitor progress in implementation of the TSD Chapter and provide further inputs to the discussions The TSD Sub-Committee looks forward to the Advisory Groups’ as well as to the open Civil Society Forum’s views in this regard.