Institute for European Environmental Policy (IEEP)’s Post

The introduction of Trade and Sustainable Development (TSD) chapters in European Free Trade Agreements (FTAs) signifies a crucial shift #EU #TSD #FTA @VictorDeDecker @EgmontInstitute

State of the Union 2023 Trade is a key #EU exclusive competence & a #geopolitical @EU_Commission is surely aware that the Common Commercial Policy is a powerful strategic tool for 🇪🇺global action 🤝Trade & #values go hand in hand in 🇪🇺negotiations & in the #implementation trade agreements 👉#Feasibility is vital & we must not forget that European industries are legitimate stakeholders who must be heard throughout the legislative process 💬I am sincerely convinced: there can be no #Greendeal/ #Digital Transition, no shift towards sustainable #energy & no #decarbonisation of our economies without a strong European Trade Policy❗️ 🤝🌍We must build global value-based coalitions to implement European initiatives on #rawmaterials #CRMs, global value chains, climate action, development & more 👉on this backdrop, I would’ve expected to hear more about international #trade in the #SOTEU2023 speech 💬Not enough has been achieved on the trade front in the current Commission mandate.  👉The last #FTA ratified by @Europarl_EN was 🇪🇺🇻🇳 back in 2019! 💪I think that re-instating the dedicated Trade Commissioner portfolio in the next European Commission is a must❗

𝐂𝐨𝐦𝐩𝐚𝐫𝐢𝐧𝐠 𝐭𝐡𝐞 𝐄𝐮𝐫𝐨𝐩𝐞𝐚𝐧 𝐔𝐧𝐢𝐨𝐧 𝐂𝐚𝐫𝐛𝐨𝐧 𝐁𝐨𝐫𝐝𝐞𝐫 𝐀𝐝𝐣𝐮𝐬𝐭𝐦𝐞𝐧𝐭 𝐌𝐞𝐜𝐡𝐚𝐧𝐢𝐬𝐦, 𝐭𝐡𝐞 𝐂𝐥𝐞𝐚𝐧 𝐂𝐨𝐦𝐩𝐞𝐭𝐢𝐭𝐢𝐨𝐧 𝐀𝐜𝐭, 𝐚𝐧𝐝 𝐭𝐡𝐞 𝐅𝐨𝐫𝐞𝐢𝐠𝐧 𝐏𝐨𝐥𝐥𝐮𝐭𝐢𝐨𝐧 𝐅𝐞𝐞 𝐀𝐜𝐭 by Milan Elkerbout, Ray Kopp, Kevin Rennert; Resources for the Future This #report compares goals and designs of three border adjustment mechanisms: the European Union's Carbon Border Adjustment Mechanism, the Clean Competition Act, and the Foreign Pollution Fee Act. The #EUCBAM entering into force in October 2023 is clear evidence that the use of international #trade as a component of #climatepolicy has left the realm of academia and is now an accepted policy tool. While the European Union argues that the EU CBAM is a straightforward extension of the #EUETS and should not be considered an international trade policy, the introduction of the EU CBAM has provided a rationale that supports the consideration of BAMs in other countries that have the potential to significantly impact global trade. It is hard to overstate the extensive impact #BAMs can have on international trade. While the EU CBAM identifies six #categories of internationally traded products, the number of actual products that would be subject to the CBAM can be quite large. In the case of #iron and #steel alone, the number of #products is over 100. The indirect #impacts may yet be greater still through the consumption of covered goods in other products. The vast number of products subject to BAMs clearly poses complex #implementation issues. It also leads to the scope of BAMs affecting large numbers of countries that rely on developed country markets for their exports and #economic well-being. Many countries argue that BAMs are inconsistent with World Trade Organization (WTO) multilateral trade rules. Problems of #emissions leakage, lost international #competitiveness due ambitious #decarbonization policies, and suggestions regarding the use of BAMs are not new. Now BAMs are a reality, and we are confronted with important #questions. ✅️ Will this policy tool be effective in addressing leakage and competitiveness and spread beyond the EU to the US and other large industrial nations? ✅️ What will be the impact of widespread BAM adoption on the global system of international trade, industrial emissions, green investments, and the economic welfare of exporters in countries that enacted BAMs? ✅️ Will long standing international trade rules embodied in the WTO successfully challenge the spread of BAMs or will trade rules—whether multilateral or plurilateral—adapt to this new reality? Time will tell. The link: https://lnkd.in/duaDJ22x

John Clarke, (former Director of International Relations at the European Commission and former Head of the EU Delegation to the WTO and UN in Geneva) has written a very interesting article on the Euronews website today. Find it here: https://lnkd.in/esfkkTQP He argues that the coupling of trade and green issues - however noble - will complicate matters for the EU in the years ahead. #CBAM #EUDR #Forcedlabour #ESG #trade #EU #BDO

The latest on African Climate Wire: It's been a bumpy road for the European Union's Carbon Border Adjustment Mechanism (CBAM). The CBAM puts a tariff on carbon intensive products as part of the EU's Green Deal, but developing countries have argued that the mechanism negatively impacts trade. The World Trade Organization recently held its Ministerial Conference, and there were hopes that the CBAM question would finally be addressed. However, a veto from India means that the issue of climate change and trade remains unresolved. #trade #climatechange #EU #tariffs https://lnkd.in/g33mH5AB

"The merit of WTO outcomes on sustainable trade should be assessed not against ideal world scenarios and dated hopes for binding multilateral agreements ready for national implementation, but against more realistic benchmarks." A way forward: "A realistic yet ambitious benchmark for success on sustainable trade issues could be defined as a revitalization of the WTO’s Committee on Trade and Environment in the nearer term, as well as convergence on non-binding instruments, best practice principles, and codes of conduct to guide and coordinate national policy approaches." A great piece on all trade & climate after the #MC13 by David Kleimann, Jodie Keane and Michai Robertson for Forum on Trade, Environment & the SDGs (TESS). https://lnkd.in/egTXzgQd

At the WTO's 13th Ministerial Conference in Abu Dhabi (MC13), trade ministers embarked on a historic dialogue around integrating trade cooperation with environmental sustainability. This step underscores a critical shift towards aligning global trade policies with environmental and sustainability goals, bridging the long-standing divide between these two crucial areas. It reflects the growing recognition that trade policies must evolve to support global efforts in tackling environmental challenges.  Read more here 👉 English: https://lnkd.in/efK9_Us6 French: https://lnkd.in/eHPag_Zu Spanish : https://lnkd.in/eMC-YAQX

The EU's trade policy is becoming greener, with more focus on sustainability in the production of products in non-EU countries. This certainly complicates its global trade network, for a price it believes is worth paying #globaltrade

The paper highlights sustainability efforts, particularly focusing on #carbon emission reduction within the Paris Agreement #framework. It discusses the increasing importance of #Trade and Sustainable Development (TSD) chapters in European Free Trade Agreements, along with EU initiatives like the Carbon Border Adjustment Mechanism (CBAM) and the Corporate Due Diligence #Directive (CSDDD). Additionally, it briefly examines the #EU's involvement in multilateral #climate change discussions. Overall, it emphasizes the role of international trade in promoting #sustainable development, as outlined in the #2030 Agenda for Sustainable Development. https://lnkd.in/exNYYa-a

The EU’s Carbon Border Adjustment Mechanism (CBAM) necessitates further development to address its inconsistencies with climate and trade agreements, including the EU’s free trade agreements. While it aims to mitigate ‘carbon leakage’ and promote global decarbonization, its approach raises complex legal questions, especially regarding its alignment with WTO principles and the Paris Agreement. The mechanism’s lack of concessions for developing and least developed countries (LDCs) and the allocation of its revenue to the EU budget, rather than supporting capacity building in these countries, are significant concerns. The preferential treatment of imports based on carbon content poses a potential contradiction with WTO’s non-discrimination principles. Ensuring ‘equivalence’ for imports from countries with varying climate regulations is challenging, highlighting the CBAM’s extra-territorial implications and compliance issues with WTO norms. Moreover, the complexity of implementing the CBAM, particularly in global value chains, introduces trade inequities and may disproportionately burden developing countries. Furthermore, the lack of conclusive evidence supporting significant ‘carbon leakage’ suggests that other factors might be more influential in investment decisions, challenging the CBAM’s fundamental premise. With these considerations, especially as the CBAM is discussed in platforms like the India–EU Trade and Technology Council, it becomes clear that the EU must reevaluate and modify the CBAM. This reevaluation is crucial to respect the diplomatic efforts of developing countries and LDCs in securing fair outcomes in climate and trade negotiations. In light of these challenges, competent legal advice is indispensable for navigating and understanding the complex legal landscape surrounding the CBAM, ensuring compliance, and advocating for necessary amendments. #CBAM #EUCarbonAdjustment #TradeLaw #WTOCompliance #ParisAgreement #DevelopingCountries #CarbonLeakage #EUTradeAgreements #GlobalDecarbonization #InternationalTrade #TradeEquity #ClimateAction #CarbonPricing #EUETS #SustainableDevelopment #TradeSanctions #GlobalValueChains #IndiaEUCouncil #EnvironmentalPolicy #CarbonEmissions #TradeNegotiations