Confusion abounds over plans for EU deforestation law
Europe tells WTO it is ploughing ahead but claims no decision has been made yet to media
There was more confusion last week about whether the EU will delay its controversial deforestation regulation (EUDR).
The law, set to come into force in December, will prevent products being sold in Europe if they cannot demonstrate they are ‘deforestation-free’ and covered by a due-diligence statement.
It applies to cattle, cocoa, coffee, palm oil, rubber, soya, wood and products derived from those seven commodities.
But there has been widespread pushback against the regulation, with companies and lawyers arguing it is impossible to comply with in practice, Member States saying it will disadvantage EU businesses, and non-EU governments accusing it of extraterritoriality.
The European Commission has delayed the publication of supporting documentation while it tries to resolve the concerns, meaning companies are still waiting on key information about EUDR with less than 100 days until the implementation deadline.
On Wednesday, the EU fielded a formal question from a number of its peers on the World Trade Organisation’s agricultural committee.
Submitted by New Zealand and backed by the US, Canada, Australia, Paraguay, Argentina and Ecuador, it claimed members were “deeply concerned about the significant impact that the implementation of this regulation will have on global trade, and the high compliance burden it places on countries and producers whose systems are not linked to deforestation”.
They said the regulation was too prescriptive and undermined local rules and conditions in jurisdictions where forests were a strong part of the economy.
“It is our firm view that this is not the most trade facilitative approach to achieve the objective of protecting global forests,” the statement continued, calling for a delay to the implementation date until further questions were answered and there was more clarity on how to adhere to the rules.
“New Zealand believes that a more effective approach would involve WTO members working together collectively, rather than contributing to the proliferation of unilateral initiatives which cause trade disruption and risk fragmenting the international trading system.”
A policy brief published on Thursday by the European Centre for International Political Economy (ECIPE) concluded that parts of the EUDR may contravene the WTO’s rules.
“The regulation risks being deemed ‘unjustifiable extraterritoriality’ or ‘more restrictive than necessary’ for not adequately considering different conditions in third countries,” said the think-tank, which receives funding from Stiftelsen Fritt Näringsliv, the Swedish foundation in favour of free-trade and individual liberty.
The report recommends amendments to EUDR which it said could make it compatible with WTO rules.
However, the EU reiterated its intention to push through with the original timeline in its response to New Zealand, adding: “The EUDR was developed in compliance with EU’s international commitments, including our trade agreements, and WTO requirements.”
Its official response claimed that “any postponement would require legislative change” which would “not achieve our goal to provide legal predictability for operators as soon as possible”.
“The EU is therefore focusing on ensuring that all the elements necessary for the implementation of the Regulation are ready on time, including the guidance for economic operators and Member States, and the IT system.”
But back in Brussels, a spokesperson for the European Commission told a press conference on Thursday that “no decision has been taken about any possible delays to the date of application of the EU Deforestation Regulation at this point”.
“Give that no such decision has been taken, I am not at liberty to discuss any possible putative internal steps that may or may not be taken within the European Commission and with stakeholders,” said Adalbert Jahnz, who represents the Commission on environmental issues.
“Obviously, if there are any changes required, or proposed, or suggested, to the regulation, that would require the approval of the co-legislators that adopted the regulation in the first place,” he pointed out.
The conflicting responses come hot on the heels of multiple reports that Ursula von der Leyen recently assured her party, the EPP, that she would come up with a solution to deal with their concerns about the EUDR this month.
This was understood to mean a likely delay to the rules while they were clarified.
In the meantime, private-sector pushback continued to grow, with nearly 30 European trade bodies co-signing a letter to the Commission last week complaining of “severe legal and market uncertainties” and insisting “the current situation clearly shows that implementing the EUDR by the end of 2024 is simply unfeasible and would result in many small businesses being wiped out of the market and job losses in rural areas”.
The chocolate industry has been more supportive of the rules.
Over the summer, Reuters reported that Nestle, Mars Wrigley, Tony’s Chocolonely and Ferrero had written to the Commission supporting its plans and describing the EUDR as “an important step forward in driving the necessary transformation of the cocoa and chocolate sector, by helping to minimise the risk of deforestation associated with cocoa and chocolate products placed on the EU market”.
Real Economy Progress approached the European Commission for comment and was referred to Jahnz’s statement as a reflection of its current position.
