Authors: Marianne Kettunen, Ellie Davey

The EU has been actively promoting trade as a tool that fosters sustainability, both globally and within partner countries. The European Green Deal, forming the blueprint for EU policy- and decision making for the upcoming five years, univocally reconfirms this role and objective of the EU trade policy.

With the Green Deal and the adoption of EU border tax for carbon dominating the headlines in Brussels, IEEP’s new policy paper seeks to broaden the debate and remind that striking a green deal for EU trade policy needs to build on a review and reform of the whole trade policy regime, encompassing all aspects of the environment. The paper concludes that more comprehensive efforts by the European Commission to uphold – and upgrade – environmental standards as part of trade are needed to deliver the promises made in the Green Deal.

The IEEP policy paper explores what a truly green EU trade policy under the EU Green Deal should look like.

As the world’s largest trading bloc, the EU provides the biggest export market for around 80 countries; and the EU Member States account for 16% of world imports and exports. Consequently, the EU has a considerable impact on third countries through international trade, with the EU trade policy having the potential to act as a key vehicle in supporting trade partner countries efforts to achieve the 2030 Sustainable Development Goals (SDGs).

However, without appropriate safeguards in place, liberalising trade can lead to unsustainable levels and models of production in trade partner countries. This translates to unsustainable use of natural resources, and increased pollution and carbon emissions, further resulting in environmental and ecosystem degradation with various risks to human health and broader wellbeing.

The European Green Deal, published by the European Commission in December 2019, promises to continue strengthening the mainstreaming of social and environmental sustainability concerns in EU trade agreements. As such, it forms the blueprint for EU policy for the upcoming years; a period that will be crucial in determining the success or failure of delivering the 2030 sustainability agenda.

The Green Deal certainly has a lot to deliver, with the promised strengthening of sustainability aspects urgently needed. The review by IEEP concludes that the net positive contribution of the EU trade to sustainable development – going beyond the economic and addressing also the environmental and social aspects – is as yet far from being achieved.

To deliver the Green Deal, the EU must step up its game considerably, making trade policy a tool much better suited to uphold progressive environmental standards.

The IEEP policy paper, developed in cooperation with the Heinrich Böll Stiftung European Union, explores what a truly green EU trade policy under the EU Green Deal should look like. It suggests a number of recommendations for the future five-year policy trajectory, including:

• better use of the impact assessments underpinning the EU trade agreements
• key improvements in the agreements’ sustainability-related provisions, including their more assertive implementation

The paper also highlights the role that EU’s sector-specific initiatives can play in elevating environmental standards through trade, following in footsteps of the EU timber and conflict minerals regulations and, for example, taking advantage of the rising global interest on the circular economy agenda.

With the environmental alarm bells triggered by the trade deal between the EU and the MERCOSUR countries, and the need for a new trade relationship with the UK a reality, the EU now has an opportunity to learn from its past performance and transform the ground rules for its trade regime.