O quão verde é o acordo da UE? Proteção ambiental ou protecionismo europeu

por
ANGÉLICA SARAIVA SZUCKO

The EU Green Deal corresponds to a set of legislative proposals for European Union (EU) policies in different areas, such as climate, energy, and environmental protection. Currently, it is one of the main priorities of the European Commission, which understands climate change and environmental degradation as existential threats. The EU Green Deal sets ambitious targets, such as reducing greenhouse gas (GHG) emissions by at least 55% by 2030, compared to 1990 levels, and a carbon-neutral Europe by 2050. In order to achieve these goals, the EU approved the “Fit for 55” package in July 2021.

         To boost climate action globally and encourage the transition to a greener, low-carbon economy, the EU has set conditions to stimulate its partners to adopt comprehensive goals with regard to climate change, environment conservation, and the Sustainable Development Goals. In this sense, the EU Green Deal has enormous prescriptive potential to foster global measures compatible with those from the EU. The bloc, therefore, seeks to present itself as a normative power capable of spreading its values ​​and influencing the behavior of other international actors through its own regulations. The association between trade and environment, however, could be categorized as green protectionism. Despite the environmental gains conveyed in the European rules, some regulations, such as the Carbon Border Adjustment Mechanism (CBAM) and the Deforestation-free Products Law (EUDR), have features of European agricultural protectionism and bring significant impacts to less developed countries (European Commission, 2023a).

        The CBAM works like an import tariff on carbon-intensive goods when the products enter the EU. It functions as an instrument to prevent “carbon leakage” when the production of European companies moves to third countries where environmental policies are more flexible or when carbon-intensive imports replace products from the European bloc. The aim of CBAM is to ensure that imported products are subject to a regulatory system that prices carbon as the EU Emissions Trade System and, consequently, encourages the reduction of GHG emissions (European Commission, 2023b).

         The CBAM came into force on October 1, 2023, with a transition period until December 2025, in which importers of goods only need to report GHG emissions without the need to make payments or financial adjustments. From January 2026, importers must declare the GHG emissions embodied in imported goods into the EU in the previous year and hand over the corresponding number of CBAM certificates. Initially, the regulation includes cement, iron, steel, aluminum, fertilizers, hydrogen, and electricity, but the list of products may increase (European Commission, 2023b).

        Even though the obligation to declare the GHG emissions is from the EU importers, exporters must be ready to provide this information if they do not want to lose market access. Those who are unable to report their emissions will run the risk of losing their business partners to competitors with lower emissions products. If an exporter does not report the GHG emissions, the importer must pay a standard price based on the average emission intensity of the exporting country plus a markup. It could make its products much less competitive in European markets. By adopting this new regulation, the EU intends to encourage foreign producers to reduce emissions or their respective governments to establish their own mechanisms to price carbon trading.

         The EU is one of the biggest responsible for deforestation associated with international trade (European Commission, 2023c). In this sense, the deforestation-free products law aims, at the same time, to reduce GHG emissions and combat forest degradation. Under the EUDR, the entry of commodities like cattle, palm oil, wood, coffee, cocoa, rubber, soy, and their derived products (chocolate, leather, and furniture), originated from deforested areas from 2021 on, will be blocked (European Commission, 2023c). Suppliers are responsible for tracking commodities back to the production land to ensure they do not originate from deforestation or have contributed to forest degradation. In addition, suppliers must comply with labor laws and indigenous people’s rights in the original region.

        Inspection by the European Union will take place according to the countries’ risk classification and using geolocation technology to monitor regions with satellite images. Among the criteria considered for classification is the rate of deforestation and expansion of agricultural land for the commodities mentioned in the law, besides the trends in production in each country. Low-risk zones will have 1% of goods inspected, while medium and high-risk zones will have 3% and 9%, respectively. Failure to comply with legislation can result in a fine of up to 4% of the company’s annual revenue, the confiscation of products, and other penalties (European Commission, 2023c). EUDR came into force on June 29, 2023, and suppliers will have 18 months (or 24 months, in the case of small producers) to comply with the obligations. While this regulation focuses on forest ecosystems, European authorities have already indicated that they may expand the scope of the legislation.

 The impact of the EU Green Deal on developing countries

           Both regulations (CBAM and EUDR) can be considered extraterritorial and unilateral discriminatory protectionist measures. As they create a non-tariff barrier by linking environmental measures to international trade, we could categorize them as discriminatory measures. Furthermore, they do not respect the World Trade Organization (WTO) most favored nation clause because countries with emissions trading systems, such as Norway and Switzerland, do not need to acquire CBAM certificates. In practice, developing countries are the most affected as they do not have developed their own systems or do not have the capacity to do so. These regulations can also be classified as extraterritorial measures, as they apply to third countries and not to the EU member states. However, the regulations indirectly affect European importers, who must present the required documentation. Finally, we could say they are unilateral measures because the EU developed and defined these new rules autonomously without dialogue with exporting countries and outside the multilateral scope of the WTO.

           By analyzing the effect of these regulations mainly on less developed countries, one could question the EU’s commitment to promoting sustainability. While disregarding the characteristics and capabilities of these developing countries to adapt to these new EU guidelines, the Europeans are not balancing the three dimensions of sustainable development: economic, social, and environmental. The CBAM, for example, does not distinguish between developed, middle-income, or less developed countries, which have different conditions for mapping GHG emissions, and, at the end, the new legislation will have a bigger impact on small producers. Also, the entry into force of this regulation may generate deviations and restrictions on international trade.

         Regarding the EUDR, one of the main criticisms is the selection bias in creating a list of products that does not include EU areas and is restricted to tropical zones of developing countries. Additionally, there are problems regarding the criteria and scope in the classification of risk zones, the difficulty for exporters in tracking production, and the possibility of bundling of geolocation technology for this purpose by Europeans. Another concern is how the new regulation will impact small producers, who may not be able to adapt within the deadline set by European legislation.

        Faced with these incoming impacts, some developing countries that export commodities listed in the EUDR, such as Brazil and Indonesia, have become partners in questioning the discriminatory nature of these new EU rules for international trade. In November 2022, an alliance composed by Argentina, Bolivia, Brazil, Colombia, Côte d’Ivoire, Ecuador, Ghana, Guatemala, Honduras, Indonesia, Malaysia, Nigeria, Paraguay, and Peru released a joint letter within the scope of the WTO stating that the EUDR proposal disregarded the local conditions and national legislation of developing countries, as well as their efforts to combat deforestation (WTO, 2022). They also recalled the principle of common but differentiated responsibilities and the historical role of EU Member States in forest degradation activities and climate change throughout their industrialization process.

        This group of developing countries expressed concern with the European approach in drafting this regulation outside multilateral negotiations or without consultation with affected States and adopting a unilateral measure that imposes a retroactive deadline and subjective criteria classification of producing countries as risk zones. Furthermore, they warned about the punitive nature of the new regulation, with expensive traceability requirements and an insufficient transition period, which could have economic and social consequences for developing countries.

         Subsequently, in September 2023, a second joint letter reinforcing these same arguments was published, in which, in addition to the fourteen countries mentioned previously, the Dominican Republic, Mexico, and Thailand were added. These countries alleged the discriminatory nature of the EUDR and its incompatibility with WTO standards (Euronews, 2023). Through the joint letter, they suggested that European authorities intensify the involvement of developing countries in the formulation of guidelines for the implementation of the EUDR, including, for example, differentiated regimes for goods from small farmers. They reiterated that new European legislation must consider the complex and diverse realities of exporting countries and rejected the EU’s “one-size-fits-all” approach.

         Additionally, the joint letter proposed lines of action, such as: greater transparency and dialogue with producing countries, recognition of the efforts made by developing countries in promoting sustainability within their conditions and capabilities, and drafting EUDR implementation guidelines that value local practices (Ministry of Foreign Affairs of the Republic of Indonesia, 2023). The signatory countries also warned that the current European approach could generate adverse effects such as trade distortions and increase poverty in producing countries, making it difficult for them to achieve the Sustainable Development Goals.

         The EU has sought to strengthen the link between its foreign policy and environmental protection by establishing partnerships with the aim to position itself as a civilian or ethical power (Afionsis; Stringer, 2014). The well-intentioned narrative of combating climate change and forest degradation is aligned with current global challenges, but also serves European interests, particularly the commercial ones. In this sense, Afionsis and Stringer (2014) point out the difference between normative power and soft imperialism in the EU environmental policy. The first relates to conducting negotiations through dialogue and symmetry rather than imposition, while the second refers to how genuine is the EU ethical-normative perspective or whether it is just a façade to achieve self-interested political, strategic, and economic objectives.

         CBAM and EUDR are examples of unilateral imposition of European Union preferences not designed through symmetrical negotiations with the most affected producing countries. Furthermore, these regulations aim to primarily serve European interests, disregarding local realities and complexities of developing countries to adapt to the new rules. The linkage between trade and environment has generated inconsistencies in European policies. By placing commercial competitiveness and European preferences above environmental protection, the bloc’s claims of normative power lose ground to soft imperialism and green protectionist practices.

 

References

Afionsis, S.; Stringer, L. C. (2014). The environment as strategic priority in the European Union-Brazil partnership: is the EU behaving as a normative power or soft imperialist? International Environmental Agreements, vol. 14 (1), pp. 47-64.

Euronews (2023). Why Global South is against the EU’s anti-deforestation law. 20 September 2023. Disponível em: https://www.euronews.com/my-europe/2023/09/20/why-the-global-south-is-against-the-eus-anti-deforestation-law

European Commission (2023a). The European Green Deal. Disponível em: https://commission.europa.eu/strategy-and-policy/priorities-2019-2024/european-green-deal_en

European Commission (2023b). Carbon Border Adjustment Mechanism. Disponível em: https://taxation-customs.ec.europa.eu/carbon-border-adjustment-mechanism_en 

European Commission (2023c). Green Deal: New law to fight global deforestation and forest degradation driven by EU production and consumption enters into force. Press release, 29 june 2023. Disponível em: https://environment.ec.europa.eu/news/green-deal-new-law-fight-global-deforestation-and-forest-degradation-driven-eu-production-and-2023-06-29_en

Ministry of Foreign Affairs of the Republic of Indonesia (2023). 17 Like-Minded Countries Convey Official Concern Regarding the EUDR. Disponível em: https://kemlu.go.id/portal/en/read/5234/berita/17-like-minded-countries-convey-official-concern-regarding-the-eudr

WTO (2022). Joint Letter – European Union proposal for a regulation on deforestation-free products. Committee on Agriculture. 29 November 2022. Disponível em: https://docs.wto.org/dol2fe/Pages/SS/directdoc.aspx?filename=q:/G/AG/GEN213.pdf&Open=True

 

ESCRITO POR

Angélica Saraiva Szucko