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TWN Info Service
on WTO and Trade Issues (Mar22/06) Geneva, 8 Mar (D. Ravi Kanth) - Several members of the World Trade Organization have sharply questioned the European Union over its decision to pursue "deforestation-free products" that will ban imports of certain agricultural products allegedly associated with deforestation and forest degradation, said people familiar with the development. The products from developing countries that are likely to be adversely affected by the EU's decision include cocoa beans (Ghana), rubber (Thailand, Indonesia, Malaysia), coffee (Brazil, Vietnam, Colombia) and plantation commodities, including palm oil (Indonesia, Malaysia and Guatemala). In what appears to be a "neo-colonial" trade policy based on the EU's controversial green and environmental standards, including the much-criticized carbon border adjustment mechanism (CBAM), Brussels wants to pursue the deforestation-free products along with green goods in agriculture, said people, who preferred not to be quoted. Ahead of the meeting of the WTO's Committee on Agriculture on 15-16 March, the points raised under the review process, including the compilation of questions for the meeting circulated on 4 March, highlight the increased focus on the EU's proposed policies concerning the deforestation-linked agriculture products. Amidst the global food and environmental crises likely to arise due to the Russian invasion of Ukraine, the EU and other developed countries, particularly the Cairns Group of farm-exporting countries, have targeted two main issues in their questions, as reviewed by the SUNS. DEFORESTATION-LINKED AGRICULTURAL PRODUCTS Several countries including Brazil, Argentina, Paraguay, Indonesia, and Thailand among others questioned the EU's strategy because of its potential to erect new barriers to the global trade in agriculture products. Brazil, which is one of the largest agricultural exporters and once erstwhile champion of the G20 developing countries on agriculture, posed questions to the EU in a rather conciliatory tone. Brazil said that it "would like to consult the European Union on its proposed regulation on "deforestation-free products" ("Proposal for a Regulation of the European Parliament and of the Council on the making available on the Union market as well as export from the Union of certain commodities and products associated with deforestation and forest degradation and repealing Regulation (EU) No 995/2010")." Given the increasingly common negotiating positions with the EU, Brazil said it "understands that such regulation will ban imports into the EU of some agricultural products, according to criteria allegedly associated with deforestation and forest degradation." Brazil went on to highlight the background of the EU's proposed regulation, saying that "in 2019, approximately 34% (20 Gt CO2-eq) of global GHG emissions came from the energy sector, 24% (14 Gt CO2-eq) from industry, 22% (13 Gt CO2-eq) from agriculture, forestry and other land use (AFOLU), 15% (8.7 Gt CO2-eq) from transport and 6% (3.3 Gt CO2-eq) from buildings (IPPC)." Brazil, which has given up its entitlement to special and differential treatment following a pact with the former US President Donald Trump, said that "additionally, in comparison with developing country Members, such as Brazil, the EU in average and its largest economies in particular have not only higher percentages of agricultural land as a percentage of land area, but also lower percentages of forest area as a percentage of land area (World Bank), owing to deforestation-led processes of development." Brazil said that it has been observed in Europe "(...) an increase in the harvested forest area (49%) and an increase in biomass loss (69%) over Europe for the period of 2016-2018 relative to 2011-2015, with large losses occurring on the Iberian Peninsula and in the Nordic and Baltic countries." Exposing the EU's allegedly dubious claims, Brazil argued that "satellite imagery further reveals that the average patch size of harvested area increased by 34% across Europe, with potential effects on biodiversity, soil erosion and water regulation" based on a study published by Nature (https://www.nature.com/articles/s41586-020-2438-y). Based on the above data, Brazil sought to know from the EU "the rationale of adopting import bans to curb deforestation and forest degradation instead of less trade-restrictive measures." It asked the EU, "taking into account the data mentioned above related to the increase in harvested forest area in the EU, how does the EU plan to enforce an equivalent ban to domestically-traded products?" Further, Brazil asked the EU to elaborate "on how it intends to carry out its border control of imports that will be subject to the new legislation?" Finally, Brazil asked the EU that "considering the overarching goals included in the European Green Deal, why has the EU chosen to apply import bans focused on agricultural goods and land use policies (therefore, to discriminate against developing countries which rely on the agricultural sector to foster their development), vis-a-vis industrial goods and the use of "dirty" sources of energy in production processes?" Brazil asked Brussels how it would "justify such measures in the light of Article 4 of the AoA (Agreement on Agriculture)?" Article 4 of the Agreement on Agriculture, which deals with market access, states: (1) Market access concessions contained in Schedules relate to bindings and reductions of tariffs, and to other market access commitments as specified therein; and (2) Members shall not maintain, resort to, or revert to any measures of the kind which have been required to be converted into ordinary customs duties, except as otherwise provided for in Article 5 and Annex 5. Indonesia said that it has observed along with other members carefully, "the EU Green Deal and all related implementing policies, especially Forest Policy Deforestation." Jakarta posed the following questions: (a) Could the EU please explain scientifically the possible negative impact of this policy to the loss of livelihoods for small farmers in developing countries and LDCs? (b) It is certain that several agricultural commodities will be impacted in the future such as cocoa beans, rubber, coffee and plantation commodities that Indonesia produces, including palm oil. Could the EU please explain the impact of implementing this policy in the long term, such as the effect on the market access of agricultural products related to Article 4.2 of the AoA? (c) Could the EU explain the contradictions in implementing these policies by achieving the Sustainable Development Goals (SDGs) and the spirit of reforming the AoA imbalances, especially in the Agricultural Market Access pillar? EU'S ENVIRONMENTAL POLICIES In its questions on the EU's environmental policies, Brazil challenged Brussels on its proposed targets underlying its "European Green Deal." Brazil said that considering the "relationship between the Strategic Plans and the EGD (European Green Deal), therefore, with the Farm to Fork and biodiversity strategies, what is the criteria for the EU to evaluate the Strategic Plans in what they relate to climate and environmental targets/policies in the agricultural sector and the Eco- Schemes?" India exposed the contradictory statements made by the EU which said "the basic legal acts in a political agreement on CAP (Common Agriculture Policy)-Reform post-2022 have not yet been adopted." As per a news item dated 7 December 2021 on the official website of the EU, it is found that the new CAP regulations have entered into force (https://ec.europa.eu/info/news/new-cap-regulations-enter-force-2021-dec-07_en). India sought to know "when would the DS:2 (domestic support) notification in this regard be made?" The EU had already submitted the DS:1 notification for the marketing year 2018-19, but has so far not notified DS:2. The US along with several other countries raised several questions about India's public stockholding programs that intend to fulfil the food security needs of more than 800 million people, with many of them living below the poverty line. In a nutshell, it appears that several developed countries, including the US, remained silent on the EU decision on deforestation-linked agriculture products. However, the developing countries remain the major target for the EU's controversial climate-related trade policies. (See SUNS #9462 dated 18 November 2021, available at https://twn.my/title2/wto.info/2021/ti211118.htm).
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