Greening EU Trade 4: How to “Green” Trade Agreements?

At a time when the results of the US Presidential election allow for greater hope concerning both the environmental and trade agendas, this policy paper offers diverse proposals on how to render trade agreements more environment friendly. It is the fourth in a series on the greening of EU trade policy that Europe Jacques Delors initiated following the political reconfiguration brought about by 2019’s European elections. While trade policy is neither a panacea in the fight against global warming, nor a guarantor of environmental protection and biodiversity, it must nevertheless accompany domestic dynamics of ecological transition in order to ensure and further diffuse their impacts. Under the increasingly distinct pressure of public opinion on the matter, policy lines appear to be undergoing a swift transformation. The nomination of the new European Commission has brought about an acceleration in the agenda for greening EU trade policy. In the space of only a few months, highly sensitive issues such as border carbon adjustment or the inclusion of the Paris Agreement as an essential element of trade agreements have become policy options that are now part of the Green Deal agenda and as such seriously being considered at the European level. The unexpected alliance between France and the Netherlands on the greening of European trade policy2, accompanied by the recent more negative stance taken by several national governments about the ratification of the EU-Mercosur agreement3 are just two examples of this acceleration. This political momentum could start to bear fruit very soon. The trade agreement that the European Union is currently negotiating with New Zealand, a frontrunner-country on sustainable trade and climate policies, could be the first in a series of new trade agreements including enforceable provisions in more “robust” trade and sustainable development chapters.

This greening endeavor can be approached in the two traditional dimensions of the rules-based trading system:

1. The multilateral dimension, i.e. the WTO, where ambitions to open up trade fairly are limited by the heterogeneity of members preferences and by their different levels of development.
2. The bilateral/regional dimension (“WTO +”), which allows for a greater pursuit of openness hence providing a lever for higher environmental ambitions.

To view all the recommendations on Greening EU Trade, please click here.

To download the full report, please click here.

Pascal Lamy is President emeritus of the Jacques Delors Institute and the former Head of the WTO

Geneviève Pons is Director General of Europe Jacques Delors and the former Director of WWF EPO

Pierre Leturcq is a Research fellow at Europe Jacques Delors