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Can a trade deal provide an incentive for both trading partners to sit down and work on solutions? Absolutely. Combatting illegal deforestation and tackling embedded deforestation in international supply chains require their own policy instruments.Ĭan a trade deal alone curb deforestation? Probably not.
Cid episode 1350 drivers#
The EU-Mercosur Agreement would help support this trend further, but it is doubtful whether it would have a strong impact on deforestation rates per se, the drivers of which are often more related to land speculation than international trade. When it comes to embedded deforestation in imported products, the more integrated supply chains are, the more opportunities to certify inputs and use innovative technologies to track compliance. Nonetheless, if one of the primary purposes of EU trade policy is to enforce sustainability standards and guarantee a level playing field, a trade deal is a good starting point.Įnforcing environmental and social commitments is complicated. However, this pivot could also become a self-fulfilling prophecy, with new trade deals perceived as being too much effort, at a cost to competitiveness and influence. The nomination of a Chief Trade Enforcement Officer, who sits within DG Trade, rather than a Chief Market Access Officer, is emblematic of this shift. Exact provisions have evolved, which is one reason why the von der Leyen Commission has pivoted towards enforcing pre-existing deals. The EU has long promoted trade agreements as a means to tackle ‘non-trade’ issues, from human rights to biodiversity. If environment is the issue, what is the EU’s objective? Moreover, the integration of supply chains multiplies opportunities for regulatory convergence, further greasing the wheels of bilateral trade. When countries adopt standards based on EU regulation, it gives the EU a competitive edge. The swift adoption in Brazil of legislation governing data protection – similar to the EU’s General Data Protection Regulation (GDPR) – is but one example of the potency of the Brussels Effect. For example, Mercosur has often looked towards Brussels when introducing new policies and used existing EU legislation as a template for its own. Partnering with Mercosur would enable the EU to reinforce the projection of its soft power across the region. Whether it be narrowing the EU’s reliance on China or expanding its global consumer market base, ignoring how this deal works towards the EU’s objective of open strategic autonomy would be an unfortunate miscalculation. This is even more relevant given the economic impact of Covid-19, particularly for those EU Mediterranean countries worst affected by the slump in tourism who share linguistic and historical ties with Mercosur. There are real opportunities for European companies to broaden their transatlantic horizons by both securing new partners and expanding exports to a consumer market of 284 million people. The EU’s new trade strategy stresses the importance of building resilience through diversifying supply chains.
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If this is not the EU, then who will it be? Whoever moves into the region first will gain competitive first-mover advantage.
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Protected behind high tariff barriers, the Mercosur bloc has no large trade agreements with other regions. Now there is a real risk that the agreement will remain unratified, which would have lasting effects for both regions and their relation. It was no mean feat for the EU to reach a deal with one of the world’s most economically protected and closed regions, yet since political will towards ratification has chilled. Back in June 2019, there was a political ‘alignment of the stars’, enabling an Agreement to be reached in principle. The EU’s Agreement with Mercosur – which includes Argentina, Brazil, Paraguay, and Uruguay – took twenty years to negotiate.