2024 Virtual Intensive Trade Seminar: Trade Around the World – U.S. Trade Initiatives
On October 1, WITA hosted the Trade Around the World – U.S. Trade Initiatives panel as part of the 2024 WITA Academy Virtual Intensive Trade Seminar.
The annual Intensive Trade Seminar, co-hosted with George Washington University, features speakers that help attendees increase their professional knowledge by learning the nuts and bolts of trade policy directly from career trade policy professionals from across government, industry, and law.
To view the full agenda of the 2024 Virtual Intensive Trade Seminar, please click here. Recordings for all sessions are available to purchase. To learn more, please email us at events@wita.org.
Featured Speakers:
Marjorie Chorlins, Senior Vice President, Europe, U.S. Chamber of Commerce
Eric Farnsworth, Head of the Washington Office, Council of the Americas and the Americas Society
Wendy Cutler, Vice President and Managing Director, Asia Society Policy Institute (ASPI) Washington, D.C. Office; former Acting Deputy U.S. Trade Representative, Office of the U.S. Trade Representative
Florizelle Liser, President and CEO, Corporate Council on Africa
Moderator: Penny Naas, Lead, GMF Allied Competitiveness, German Marshall Fund
10/01/2024 | WITA Academy
Perspectives: Want Trade Deals? Create Good Atmospherics First
Trade negotiations in recent years have faltered due to an atmosphere of suspicion. Politicians need to start sending more positive signals to allow diplomats and negotiators to start finding ways to seal agreements.
When the UK-EU Trade and Cooperation Agreement was being negotiated it was seen an exception. Instead of opening up trade, its goal was to ease the transition from the United Kingdom being part of the EU’s single market to a relationship primarily based on World Trade Organization rules.
Whole policy areas typically included in free trade agreements such as public procurement are largely absent of this agreement. The European Union insisted on extensive level-playing field provisions in the expectation of the UK cheating.
In retrospect, though, the TCA should perhaps have been seen as warning. Modern trade negotiations increasingly take place with a similar underlying atmosphere of suspicion.
EU-Mercosur free trade agreement negotiations have for some time been moving in the direction of mutual distrust about what the other parties might do. Sometimes it is hard to recall that this agreement is supposed to increase trade.
There are many more examples, whether from the EU and Australia, or almost anything the United States has done in trade policy since 2016.
For businesses seeking a renewed free trade agreement agenda there is a fundamental problem. If you don’t change the mood, what is discussed will be more about market access conditions than openness.
Any agreement reached in this way is unlikely to deliver much growth.
What we may see in the UK-EU relationship in the coming years is a return to something more positive. There is every reason to believe deepening ties will lead to better agreements.
Those seeking openness should heed this lesson. Mutual goodwill must be the basis of the free trade agreement agenda.
Improving the mood between UK and EU
In the early weeks of the new UK government there has been a noticeable change in attitudes towards the EU. Most notable were early calls from new ministers to their EU counterparts – which would have been unthinkable under previous governments since 2016.
New foreign secretary David Lammy visited Poland, Sweden and Germany the weekend after the election. Business and Trade Secretary Jonathan Reynolds spoke with Valdis Dombrovskis on the phone and met at the G7 trade ministers meeting in July.
The UK successfully hosted the second meeting of the European Political Community. Although there were no concrete deliverables, the EU leaders present spoke positively about London’s approach.
Labour’s plans for enhancing trade relations with the EU remain formally rather modest. Agreements on sanitary and phytosanitary issues, visas for touring artists and recognition of qualifications are the frequently mentioned items.
There are internal discussions on going further than that.
Though evidently an awkward topic for the UK, there is a growing awareness of the need to respond to EU asks on youth mobility.
Joint work on economic security, regulatory alignment and aligning Emissions Trading Schemes are also under consideration.
Concrete agreements, even negotiations, may be some time away. Thinking has however started on both sides about what these may contain.
Allowing officials to think creatively
At a time when trade agreements were driven by more open attitudes, negotiators were empowered to find ways around problems.
Through ministerial example, UK civil servants have also been given permission to engage with EU counterparts.
Before the UK election, many officials in relevant areas could not wait to be allowed to test ideas on progressing particular issues with the EU. Now we can expect them to act on this.
Formally, the EU line is to wait for proposals from London. In reality, many in Brussels will be equally keen to engage.
Commission officials are already developing their thinking as to how discussions could be structured.
This isn’t just about those working in EU institutions. Businesses and other stakeholders will take their signals from governments.
There is ample opportunity for joint UK and EU industry positions. On past evidence this can be an effective tool to help forge agreements.
Indeed, the extension of generous rules of origins for electric vehicles in the TCA at the end of last year, was considerably helped by joint pressure by the car industry.
Goodwill is often infectious. Although the pain of recent UK-EU negotiations won’t be easily forgotten, a new picture can be built over this experience.
The EU-Switzerland talks are perhaps ahead of the UK in this regard. Two previously troublesome relationships are therefore in recovery.
Whether this can be transferred to other EU relationships remains however to be seen.
European Union needs to recover its confidence
If politicians create the impetus for their officials, there will only be a limited amount that EU negotiators can achieve right now.
Pressure comes from several directions. Overt protectionism across the political spectrum means prospects for France ratifying any future trade agreements seem remote.
Meanwhile many MEPs from various member states put pressure on trade from various angles, including with environmental, labour and nationalist arguments.
Summarising the problem, Ursula von der Leyen’s ‘Political Guidelines’ released in July ahead of her confirmation vote as European Commission president for a second term sees trade as both an opportunity and a problem. Talk of “long-term, mutually beneficial partnerships” is undermined by suspicion.
Translated into day-to-day operations, such messages are easily received by those at the front line as them not being fully trusted. However much it is claimed that the targets are really the third countries concerned.
Some time ago, when I discussed Indian resistance to trade agreements with informed observers, lack of public trust in negotiators emerged as an unexpected reason for it. In this specific Indian case, there would be suspicions of corruption if too much was given away.
In the EU or US, it is more likely that creative officials could be seen as part of the ‘deep state’. This makes productive negotiations extremely difficult.
To have a renewed trade agreement agenda, negotiators have to feel empowered. To use a particular term disliked by some, a safe space must be created.
Right now, in most EU negotiations, that is not sufficiently present. Negotiations are thus bound to flounder.
Atmospherics can change this, as we are starting to see with the UK. Though this has to be sustained if there are to be agreement in the end.
Tricky though it will be, the most siren political voices need to be quietened for significant progress on trade policy and positive associations built with the idea of openness for workers and consumers.
That’s outside the political mood of the moment and that’s why we’re struggling.
Businesses need to seek to change to the mood music before demanding more agreements.
Read the Full Perspective Here
08/28/2024 | David Henig | Borderlex
Mr. Han-koo Yeo on Asia’s Trade & Investment Landscape
ASPI Vice President Wendy Cutler Interview of Former Korean Trade Minister Han-koo Yeo.
Wendy Cutler: Please share with us, from an Asian perspective, why it’s so important for the United States to have an active economic agenda with its Asian trading partners?
Minister Han-koo Yeo: There are many countries in the region that want strong, credible, and also predictable U.S. leadership and economic engagement in the region. Let’s think of this as two categories of countries: first, advanced countries and second, developing countries in the region. First, advanced countries, including Korea, Japan, and Australia, have gone through a paradigm shift in the trade environment and have also experienced supply chain disruption, climate crises, and other challenges. These countries need to tackle these global challenges with a strong partnership with the United States. Additionally, China’s economic ride for the past couple of decades has been phenomenal, and I think the United States could play a constructive role of balancing it out in the region.
When it comes to developing countries in the region, e.g., ASEAN (Association of Southeast Asian Nations) countries, India, they need market access to the United States and they want to be integrated into the U.S.-led global supply chain. In fact, many countries in the region, starting with Japan, Korea, and Singapore, have moved up in the industrial and technology ladder through economic cooperation with the United States. So, from the perspective of both developed and developing countries, U.S. economic leadership in the region is critically important. The current U.S. administration should get credit for returning to the region and resuming its leadership, even if the economic and market access engagement in the region is not as robust as many would have preferred.
Cutler: You mentioned that developing countries in the region welcome becoming part of the U.S.-led supply chain network. But, would this not be at the expense of China?
Yeo: No. These countries are being rapidly integrated into the supply chain led by China. But they realize that if there is too much dependence or too much concentration on one country, that becomes a vulnerability and a risk. It’s a matter of overall overdependence on one partner, especially China. So, developing countries want to expand their trade and supply chain integration with China, while also seeking a more active regional role from the United States and participating in these U.S.-led supply chains as well.
Cutler: Under the Biden administration, the United States has basically retreated from pursuing market-opening agreements or free trade agreements. Is there still a hope in the region that at some point the United States will go back to that model, even if not as robustly as it has in the past? Are countries still interested in pursuing free trade agreements with the United States?
Yeo: Obviously, they woke up to this brutal reality that things have changed in the U.S. political environment. In my view, it’s inconceivable to go back to this previous era where the United States played a leadership role in bilateral, regional, and multilateral trade negotiations. But I also think that there’s wishful thinking that maybe four years or even eight years from now, a return to a market-opening agenda could happen.
Cutler: Let’s discuss the Indo-Pacific Economic Framework (IPEF), the cornerstone of the Biden administration’s economic engagement in the region. Many people, both in the United States and Asia, have been skeptical about this initiative. But I note, Minister Yeo, that you have been supportive and have written a number of pieces pointing to potential benefits and the importance of this initiative. Can you share with us your views on IPEF, and in particular do you think it will be able to deliver concrete outcomes and provide benefits to all its members the way it’s constructed now?
Yeo: Yes. We live in a different world right now. For example, Korea has gone through a series of supply chain shocks and disruptions for the past few years. Like others, we quickly realized the absence of a new template for internal cooperation to cope with these new kinds of global challenges. Korea is one of the most wired countries with its extensive FTA network with countries all around the world, including RCEP, and Korea has been aiming to join CPTPP (Comprehensive and Progressive Agreement for Trans-Pacific Partnership). But these traditional FTAs weren’t really designed to deal with the new types of challenges that we are facing. That’s why I think that these new types of economic cooperation agreements, such as IPEF, could play a meaningful role to fill the gap left by more conventional types of trade agreements. I believe that we should continue to advance trade liberalization through conventional FTAs (bilateral and plurilateral) but also, we need these new templates for new challenges, such as supply chain resiliency, decarbonization, and so on. Although IPEF is not perfect, it’s a meaningful first step.
Cutler: If Vice President Harris becomes president, there is an assumption that she would continue many of Biden’s policies and initiatives in this space, including IPEF. If you could offer her some words of advice on how to build on the current IPEF to make it more meaningful for Asia, what elements would you suggest could use strengthening?
Yeo: Vice President Harris is known for her strong advocacy on climate change and her environmental agenda. So, for example, the clean energy agreement in IPEF could be a starting point on which to build. The current text creates a cooperative work program, which is a way in which IPEF member countries can launch concrete projects that are of common interest to these countries and then aim to produce tangible outcomes. For example, they launched a regional hydrogen power project, which is a promising new source of clean energy, with new supply chain development and new ways to trade hydrogen. However, there’s a lot of work to do to develop tangible ways to activate this hydrogen power market. I think that this kind of project could show that IPEF could be useful in bringing tangible outcomes and benefits to these member countries through dedicated implementation.
You may also know that a couple of months ago, Singapore hosted an IPEF clean energy investor forum, and it was reported that about $23 billion of potential clean energy investment opportunities were identified. Of course, what matters is how much of these investment pledges can actually materialize into projects; but in order to do that, IPEF members need to work together to resolve investor grievances, including extensive red tape and bureaucratic hurdles.
Cutler: As you know, the United States has put the IPEF trade pillar effectively on hold through the election season. A lot of progress was made, but we also hear that a number of developing country members of IPEF had concerns about the labor provisions, in particular. Do you think if these talks were resumed quickly after the election that they could be swiftly concluded or do you think that there are larger differences in positions between the countries that could necessitate a lengthy negotiation?
Yeo: I think it’s more of a problem on the U.S. side than for other IPEF members. What I’m particularly worried about is the digital trade component. Recently, the WTO (World Trade Organization) e-commerce plurilateral joint statement initiative was concluded with its text “stabilized.” Although there is a shortage of more ambitious outcomes, I still think this is a meaningful achievement. The digital trade and e-commerce market in the region is exploding. These markets have young populations and growing middle classes, and many are interested in joining the Digital Economy Partnership Agreement (DEPA). China is also showing interest in DEPA, so now the United States is falling behind. There are no rules of the road for digital trade and without globally agreed, high-standard, digital trade rules, I think these countries in the region tend to copy and paste the standards and infrastructure available from China. So, I am afraid that the United States is falling behind in developing new global standards and rules for digital trade.
Cutler: Former President Trump has made it clear that if he is elected, he would, early on in his administration, instruct the United States to exit IPEF, calling it “TPP-2” (Trans-Pacific Partnership). How do you think the region would respond to such a move? My sense is that many countries in the region are still trying to get over the U.S. exit from TPP, so how would such an act by President Trump be perceived in the region?
Yeo: First of all, IPEF is not TPP-2 — it’s completely different. U.S. withdrawal from IPEF is a very undesirable scenario that we want to avoid at all costs. I also think if that happens, the credibility of the United States will be damaged severely. And, I think it’s not just short-term fallout but would impact relations in the more medium and long term too. To have a flagship U.S. economic engagement project and make a 180-degree U-turn would be damaging to U.S. credibility and leadership in the region.
Cutler: Trump also has been very vocal about his intention to increase tariffs against China as high as 60%, but he is also advocating for an across-the-board tariff increase of 10% on all products and for all trading partners. While there may be exceptions, that’s his current proposal. How would these actions be viewed in the region?
Yeo: This is very, very worrisome. If you look at the big picture of what is happening in the region, I believe that U.S. industrial policy has been quite effective, at least up to this point, such as the U.S. Inflation Reduction Act (IRA) and the CHIPS and Science Act. Because of these policy actions, many cutting-edge companies from Korea, Japan, and Taiwan are investing massively in the U.S. market for semiconductors, batteries, EVs, etc. This new trend of diversification and “China plus one” business strategies is providing countries like ASEAN members or India with new opportunities to develop their industries. They weren’t really given such opportunities before because everything was concentrated in China, but now they are being integrated into new global supply chains led by the United States. Against this backdrop, if the United States takes a complete opposite turn in its policy direction and imposes tariffs against the products from its friends and allies, it will be very counterproductive to the momentum building in the region and will damage U.S. national interests in the end.
Cutler: A number of countries retaliated against the United States during the first Trump administration, when tariffs were imposed, particularly on steel and aluminum, and China retaliated with its own sizable tariffs on U.S. imports. Are countries in the region likely to try to negotiate a deal to head off tariffs, or do you think that they are already planning retaliation moves against the United States?
Yeo: I think China will definitely retaliate, but it’s a more complicated picture for other countries in the region. In terms of security cooperation, I think many of these countries are under the U.S. “nuclear umbrella” or under some sort of security arrangement, so countries will take into consideration economic aspects as well as security aspects when deciding on the appropriate response.
Cutler: Under the Biden and the Trump administrations, the United States has retreated from its leadership role in the WTO. How do you see the WTO operating in the coming years, particularly as issues like supply chain resiliency, export controls, and advanced technologies become more and more prominent? Do you think the WTO risks becoming sidelined or irrelevant? Or, in light of the recent announcement on a digital trade agreement between many of the participants in the Joint Statement Initiative (JSI) on E-commerce, do you think that there is hope for the WTO to take on some of these challenging issues?
Yeo: Yes, obviously there’s a leadership vacuum at the WTO, and because of all these global challenges that we have discussed, today, more than ever, we need an organization like the WTO. But obviously, the WTO is not living up to the needs of the time. However, what is encouraging, despite overall difficulties that we are facing, is that recently middle-power countries have stepped up and have been playing a constructive leadership role. For example, the negotiations for the Investment Facilitation for Development (IFD) were led by Korea and Chile. The JSI e-commerce agreement that you mentioned, which was concluded recently, was led by Japan, Australia, and Singapore. I think, more and more, these middle-power country groups need to step up to fill the void left by the superpowers at the WTO. I also think that the WTO needs to tackle these newly emerging global challenges. For example, while there are widespread concerns with Chinese export surges and overcapacity issues, there is no global dialogue on this issue. I think the G7 is probably the only dialogue raising its voice on this issue, but its approach is more confrontational than collaborative.
If you look at WTO data on ongoing anti-dumping and countervailing duty investigations which were reported to the WTO after 2020, actions against China have comprised 30% to 40% of the total actions. This means that there is a structural issue, not just a case-by-case temporal matter. This also means we need more evidence-based, objective discussions on the extent and nature of the problem, and how it is impacting not just U.S. and China relations but also third nations including the EU, Korea, Japan, and the Global South. We need to explore global solutions to address these global issues. But there is no such global discussion underway right now. I think the WTO will need to play a more authoritative role as the only global trade body that is supposed to discuss and find solutions to these international trade issues. Also, as you mentioned, we have all of these newly emerging national security arguments regarding export controls, investment screening, and so forth. We have to decide whether to bring these matters into the realm of the WTO.
Cutler: How realistic is it though for the WTO to have a reasonable conversation on the overcapacity issue when top officials from China are denying that there actually is a problem?
Yeo: It is a difficult issue. I understand that some Chinese scholars acknowledge the need to have a global dialogue, but it’s very challenging to expect the WTO to have an effective role in taking up these very sensitive and difficult issues. However, if we were to find any place where we could have these kinds of conversations, I can’t see any other venue than the WTO.
Cutler: My final question is that if you had the opportunity to go into the Oval Office and brief our next president on these issues with very little time, what points would you highlight with respect to policy actions that they should or should not take? As the United States contemplates some of the policy measures we’ve been discussing, how would you urge the president to think about the region?
Yeo: It’s a very difficult question. If I had 30 seconds, I would make three points. First, U.S. trade and industrial policy can have a significant impact on shaping the economies and supply chains in the Indo-Pacific, as we have witnessed for the past few years. Second, nevertheless, sometimes the U.S. policy goal of strengthening U.S. leadership in the region and encouraging diversification and friendshoring of allies and partners doesn’t match its policy actions to achieve that. Third, therefore, it would be critical for the United States to step up its economic engagement in the region by providing tangible incentives for allies and partners with market access, industrial policy benefits such as the IRA tax credits, and digital trade rule-making leadership.
Han-koo Yeo is a Senior Fellow at the Peterson Institute for International Economics and Former Korean Trade Minister.
Wendy Cutler is Vice President at the Asia Society Policy Institute and the managing director of the Washington, D.C. office.
10/01/2024 | Wendy Cutler | Asia Society Policy Institute
Brazil’s Ecological Transition Plan: Paving the Way for the EU-Mercosur Agreement and Enhancing Global Perception
Introduction
The global issue of deforestation and its environmental consequences stand at the forefront of Brazil’s agenda as it directs a critical crossroads. In this context, the Brazilian Ecological Transition Plan, an initiative by the Ministry of Economy, emerges as a vital step towards positioning Brazil as a leader in sustainability and environmental responsibility. This plan, currently in progress, addresses urgent ecological challenges and sets the course for a more sustainable and resilient future.
However, Brazil’s path towards sustainability faces challenges, particularly concerning the EU-Mercosur Agreement. This agreement, designed at bolstering cooperation and economic growth, has been met with concerns. Increased trade in agricultural products between Mercosur countries and the EU could potentially aggravate deforestation, raising questions about the compatibility of the agreement with environmental goals.
Therefore, International Law serves as a guiding force in promoting responsible environmental practices. The interrelation of ecosystems transcends national boundaries, necessitating collaborative efforts among countries to mitigate environmental degradation. In this context, Brazil’s ambitious plan aligns with the principles outlined in international agreements such as the Paris Agreement. By adhering to these agreements, Brazil can signal its commitment to global efforts to combat climate change.
As negotiations proceed, finding common ground on environmental commitments is essential for successful ratification and the realization of mutual benefits. Brazil’s Ecological Transition Plan and the EU-Mercosur Agreement offer opportunities to demonstrate global responsibility and sustainability. By navigating these challenges, Brazil can emerge as a steward of the environment, contributing to a greener, more sustainable future.
Context
The Brazilian Ecological Transition Plan, announced by the Ministry of Economy, represents an initiative that seeks to position Brazil as a global leader in sustainability and environmental responsibility. This plan is still in progress and is set to tackle pressing ecological challenges and pave the way for a more sustainable and resilient future.
The Ecological Transition Plan, consisting of six major pillars, presents a comprehensive approach to address key environmental concerns in Brazil. These pillars include sustainable finance, technological densification, bioeconomy, energy transition, circular economy, and climate adaptation infrastructure. Each pillar aims to tackle critical challenges and foster a more sustainable and environmentally responsible future for the country.
The Plan also encompasses a wide range of measures to address key environmental concerns in Brazil. It includes initiatives such as establishing a regulated carbon market, implementing carbon taxes, and launching sustainable bonds to promote sustainable finance. In addition, the plan emphasizes a circular economy model that promotes resource efficiency, waste reduction, and innovation.
The implementation of the Ecological Transition Plan will be executed over the course of President Luiz Inácio Lula da Silva’s period, with some initiatives already starting this semester. Therefore, it is a testament to the government’s commitment to embracing sustainability and transitioning towards a greener and more ecologically responsible economy.
EU-Mercosur Agreement in the Context of Brazil
The EU-Mercosur Trade Agreement stands as a testament to the strengthening ties between the European Union and the Mercosur states, which include Argentina, Brazil, Paraguay, and Uruguay. This landmark agreement was politically finalized on 28 June 2019, marking a significant step towards fostering mutual growth, sustainable development, and increased trade and investment between the two regions.
Key components of the agreement include the reduction or elimination of tariffs on various goods and services, improved access to government procurement opportunities, protection of intellectual property rights, and facilitation of investment flows. By streamlining trade procedures and reducing barriers, the agreement aims to boost economic growth and create new opportunities for businesses in both the EU and Mercosur countries.
The agreement holds strategic importance for both parties. For the EU, it represents an opportunity to expand its market access in the dynamic economies of the Mercosur bloc and gain a competitive edge in sectors like machinery, chemicals, and automotive. On the other hand, Mercosur countries, especially Brazil, stand to benefit from increased export opportunities for their agricultural products, such as beef, soybeans, and poultry, which are vital components of their economies.
From Deforestation to Protection
The EU-Mercosur agreement, while aimed at fostering economic cooperation and trade between the two regions, has been marred by significant concerns surrounding logging in recent years in Brazil. Due to the intensified trade in agricultural commodities, from Brazil to the EU, there is a threat of deforestation being exacerbated. The expansion of agribusiness and the demand for these products could lead to further devastation, as agricultural land is cleared to meet the export demands.
In response to the growing concerns, the EU has sought to impose environmental requirements on Mercosur countries, including Brazil, to ensure adherence to sustainable practices and the Paris Agreement’s environmental goals. However, Brazil has been resistant to these proposals, raising concerns about the agreement’s compatibility with climate and environmental objectives.
Nonetheless, a striking contradiction reveals itself when inspecting the EU’s stance on deforestation. While the EU actively urges Mercosur nations to halt deforestation and embrace sustainable measures, it concurrently remains a potent catalyst for this very degradation due to its robust appetite for agricultural imports. Products like Brazilian soybeans and beef, in high demand in European markets, are frequently associated with the expansive clearing of forests for cultivation.
The EU’s consumption habits, marked by their significant imports, inadvertently fuel the deforestation they are keen to diminish. This juxtaposition not only muddies the agreement’s narrative but also casts a shadow on the EU’s true dedication to sustainability, given their prevailing consumption patterns.
As described by Knox in his exploration of “Imperialism, Hypocrisy and the Politics of International Law,” the contradictions and accusations of hypocrisy are not mere anomalies but rather intrinsic facets of international relations and policy-making. This framework can be aptly applied to the EU’s stance on deforestation.
While on one hand, the EU guardian environmental sustainability and urges Mercosur nations to halt deforestation, its consumption patterns reveal a contrasting narrative. This duality in the EU’s actions mirrors the broader theme Knox emphasizes: the tension between proclaimed values and actual practices in the realm of international law and relations.
Additionally, President Luiz Inácio Lula da Silva’s recent speech at the Power Our Planet event in Paris served as a poignant reminder of the complex interplay between environmental responsibility, global consumption, and historical accountability. With resounding applause, Lula stated, “It is not the African people who pollute the world, it is not the Latin American people who pollute the world… they must pay the historical debt they have with planet Earth.” These words resonate as an echo of the concerns arising from the EU’s demand on Brazil to address deforestation while European consumption drives it.
With the return of Luiz Inácio Lula da Silva to the presidency, there has been a significant shift in Brazil’s approach to the Amazon. Data from various sources indicate a substantial decline in deforestation rates since Lula assumed office. According to government satellite data, deforestation in the Amazon dropped by 33.6% during the first six months of Lula’s term. This decline is even more noteworthy when compared to the same period in the previous year.
Several factors contribute to this positive trend. The new administration has emphasized the importance of environmental conservation and has taken proactive measures to protect the Amazon. The government’s efforts, combined with international pressure and increased global awareness about Amazon’s significance, have played a critical role in this decline.
Challenges and Perspectives
The EU-Mercosur Agreement has faced several complications in the ratification process. Some EU member states have expressed objections regarding the environmental aspects of the deal. As of the current context, the agreement remains pending final approval and ratification from all the EU member states.
However, the European Commission President, Ursula von der Leyen, is determined to conclude the long-delayed trade deal between the European Union (EU) and Mercosur countries. With the geopolitical landscape evolving, the EU recognizes the importance of strengthening ties with Latin America and is eager to avoid neglecting the region any further.
During her tour of Latin American countries, von der Leyen, alongside Brazilian President Luiz Inacio Lula da Silva, emphasized the urgency of accelerating negotiations and finalizing the EU-Mercosur agreement. Both leaders expressed their ambition to reach a conclusion as soon as possible, aiming to achieve this milestone by the end of the year.
Nevertheless, even though both European and South American leaders are excited to sign the agreement and tout its potential benefits, authors such as Jason Hickel present a thought-provoking perspective that challenges the conventional notion of sustainable economic growth.
His argument centers on the assertion that the pursuit of never-ending economic expansion is incompatible with the finite nature of Earth’s resources and the urgent need to mitigate environmental crises. According to this view, achieving genuine sustainability requires more than mere tweaks to existing systems—it demands a profound reevaluation of our societal values and consumption patterns.
At the heart of this perspective is the notion that true environmental resilience necessitates a departure from the relentless cycle of production and consumption that has characterized modern economies. Proponents of this viewpoint argue that focusing solely on increasing GDP and material accumulation exacerbates resource depletion, pollution, and ecological degradation. Instead, they suggest that by reining in production and consumption, we can reduce our collective ecological footprint, allowing ecosystems to regenerate and reducing the strain on vital resources.
The idea isn’t to strip away comforts or advancements, but rather to challenge the prevailing assumption that continual material accumulation equates to progress. By reimagining prosperity and embracing a more holistic perspective, societies can allocate resources more efficiently, reduce waste, and cultivate lifestyles that are both environmentally regenerative and personally fulfilling.
To address the pressing environmental crises, the reevaluation of growth becomes imperative. The view that sustainable economic growth is an oxymoron suggests that we must be willing to question the status quo and explore alternative pathways that prioritize harmony with the planet over unchecked expansion. This approach invites us to consider innovative economic models that prioritize well-being, foster resource equity, and champion ecological restoration.
Despite these issues, analysts remain optimistic about the agreement’s prospects. Trade between the EU and Mercosur countries has been steadily growing over the past two decades, even without a formal agreement. The conclusion of the EU-Mercosur agreement holds immense potential for enhancing trade, economic collaboration, and sustainability between the regions. As the negotiations progress, finding common ground on environmental commitments will be crucial in securing the deal’s successful ratification and realizing the mutual benefits for all parties involved.
Conclusion
The discourse surrounding Brazil’s Ecological Transition Plan, the EU-Mercosur Agreement, and global environmental concerns reveals a nexus of economic interests, sustainability goals, and geopolitical maneuvers. Brazil’s commendable efforts to position itself as an environmental steward are evident in its Ecological Transition Plan, aiming for a sustainable and resilient future. Also, the return of Luiz Inácio Lula da Silva to Brazil’s presidency signals a promising shift in environmental protection, supported by data indicating a reduction in deforestation.
Yet, challenges arise in aligning these intentions with the potential environmental implications of the EU-Mercosur Agreement, especially concerning deforestation. While the EU demands sustainable measures from Mercosur countries, notably Brazil, there exists a dichotomy in its actions, evident in the consumption habits that inadvertently spur deforestation. This discrepancy, exemplified through the EU’s simultaneous advocacy for environmental preservation and its consumption patterns, underscores the complex dynamics of international relations, as highlighted by Knox’s insights.
The arguments presented by thinkers like Jason Hickel provide an alternate perspective, suggesting that true sustainability might necessitate a departure from the traditional economic growth paradigm. Instead, a reconceptualization of prosperity, pivoting towards ecological harmony and well-being, might be the path forward.
The current global landscape, characterized by a heightened awareness of climate change and its ramifications, offers an unprecedented opportunity. Nevertheless, this shared vision for a prosperous and sustainable future requires not just agreements on paper but real-world actions, informed policymaking, and a steadfast commitment from all participants.
Furthermore, as nations come together in this effort, they also have a single opportunity to lead by example. By successfully navigating these challenges, Brazil, the EU, and Mercosur nations could set a precedent for the world – illustrating how global collaborations can be rooted in both economic ambitions and an unwavering dedication to the environment. The path ahead may be complex, but with unity, innovation, and a shared ethos, they can illuminate the route for others, showcasing a harmonious blend of progress and preservation.
Pedro Serodio holds an LL.M in International and European Law at the Universität des Saarlandes and a Legal Assistant at MarketVector Indexes, in Frankfurt am Main, Germany
09/24/2024 | Pedro Serodio | OpinioJuris
Africa’s Trade Transformation: The Power of Technology for Sustainability
African countries that understand and embrace these requirements are well on their way to laying the groundwork for sustainable trade practices
In the face of mounting global environmental challenges such as climate change, biodiversity loss, and pollution, and increasing focus on environmental, social and governance (ESG) awareness, sustainable trade practices and supply chains have the potential to radically transform Africa’s economic future.
From green logistics to fair trade and circular economy principles, sustainable trade practices have a significant positive impact on global and local trade. In addition to environmental benefits, they enhance market competitiveness and open access to new markets that value a commitment to sustainability.
However, the transition to eco-friendly and sustainable supply chains is reliant on several factors, not least a significant investment in the infrastructure and technology needed to streamline port and customs operations and ensure a smooth entry of goods into the country in question. An understanding of the importance of digital transformation by governments and regulatory bodies is also a key factor in adopting digital solutions over more traditional manual systems.
African countries that understand and embrace these requirements are well on their way to laying the groundwork for sustainable trade practices.
As an example, the port of Cotonou in the West African country of Benin handles an average of 80 to 90 merchant vessels monthly. According to the African Development Bank, Cotonou deals with 90 percent of the country’s international trade, serving up to 100 million consumers. In 2022, the port handled 12.5 million tonnes of goods, a figure that is predicted to almost double by 2038, reaching 23 million tonnes.
In a gesture of confidence, the recent extension of an €80 million loan by the African Development Bank for significant infrastructure upgrades will expand the port’s operations even further. Yet despite the vast and complicated operations of one of Africa’s busiest ports, Benin has jumped to 66th place on the World Bank’s Logistics Performance Index, an astonishing leap of approximately 100 places in just under a decade, positioning the country as West Africa’s key trade hub.
But this wasn’t always the case. High shipping costs, low efficiency, and poor logistical facilities threatened to stifle any hopes the port had of becoming a key trade route, despite the fact that the country is a crucial transit route for West Africa, connecting millions of people in the landlocked countries of Niger, Mali, Burkina Faso, Chad, and the northern regions of Nigeria.
Technology is revolutionising trade practices
The solution? Leveraging technology to break through the complexities, inefficiencies, and obstacles impeding effective trade, and transform Benin into an economically competitive trade hub.
This is a story that replicates itself in trade ports along Africa’s entire coastline. Operators and customs entities are constantly looking for ways in which to alleviate the backlogs and delays caused by the high volumes flowing through these trade entry points, and digitisation, along with improved physical infrastructure, is proving to be an extremely effective solution. Partnerships and collaborations with specialist service providers hold the key to success.
The Webb Fontaine and Benin story
Backtracking from the current situation, and highlighting the importance of long-term public-private collaborations in modernising and streamlining trade landscapes, Webb Fontaine started working with Benin’s Ministry of Finance and Benin Control in 2017. Implementing a suite of innovative solutions including Webb Single Window, Webb Transit Tracking, Webb Valuation, Webb Ports, and Webb Customs, we are proud to be playing a pivotal role in transforming trade in the country.
Webb Single Window has been a game changer. It forms the basis of GUCE Benin, a digital platform with over 6,500 users in the logistics chain that facilitates import, export, and transit operations, and incorporates electronic payment via Paylican, Webb Fontaine’s official payments partner. Webb Single Window has also automated the processing of key administrative operations like issuing licenses and authorisations, overseeing currency exchange operations, managing exemptions, and communicating with tax services.
In practical terms, this means streamlining the process needed to get containers out of the port. Digitising processes to create efficiencies, using new technologies such as artificial intelligence (AI), reduces the time spent on clearance of goods, for both customs brokers and administrators. Benin now ranks as West Africa’s top port and holds the third-highest rating in Africa behind Egypt and South Africa. Release times have been reduced by 30%, with a remarkable 50% of containers being released within only two days.
Along with operational efficiency at the ports themselves, economic growth is a key benefit. From digital skills development to higher revenues as a result of streamlined operations, technology is playing a crucial role. For example, reducing the clearance time from 47 days to only a few days allows for more cycles of importation, increasing tax revenue and creating a healthy economic cycle. This also attracts foreign direct investment, making the port more attractive for investors and traders.
However, the use of technology in port operations is just one aspect in a larger framework of sustainable trade. The resultant benefits, such as automated systems and data analytics have the potential to lead to more efficient operations, reduced emissions, and less waste, which are all key components of sustainable trade practices. For instance, quicker turnaround times not only reduce the carbon footprint of shipping and logistics operations, but they also reduce the need for extended storage, in turn decreasing energy consumption and waste.
Is Africa ready for sustainable and eco-friendly supply chains?
Despite the challenges faced by African countries, many are making great strides. Togo’s new container platform, Nigeria’s planned green port, Liberia’s green economy reforms – all are notable examples. Yet much still needs to be done to fully embrace the digital transformation journey, while at the same time addressing issues like infrastructure development.
All stakeholders have a role to play in implementing sustainable and eco-friendly trade practices and policies. African governments, for instance, can make a commitment to investing the funds and resources needed to create infrastructure that will support both trade and digital advancements, as well as support sustainability initiatives. The African Continental Free Trade Area can play a crucial role in developing a standardised approach to these issues, based on learnings from other countries on the continent.
Africa is a continent that has immense potential when it comes to creating and maintaining sustainable trade practices that will drive economic growth. The continent’s success stories demonstrate this, and serve as a call to governments, industry stakeholders, policymakers and the private sector to work together to find tangible solutions that will promote further growth and development. Webb Fontaine is already playing a crucial role in supporting Africa’s governments on their trade facilitation journeys, with specialised port technology that is securing customs revenue, mitigating trade fraud, and streamlining clearance times. In the same way, when all stakeholders collaborate and contribute to improvements in their respective areas, Africa’s economies will reap the collective rewards.
09/04/2024 | Arnaud Bouraima | CIO Africa