Trade Liberalisation and Biodiversity

The objective of this study was to identify and analyse the use of existing methodologies for assessing biodiversity impacts of trade with a view to assist the Commission in developing a robust methodology and related indicators to assess the impacts of trade liberalisation on biodiversity.

The study focused on identifying and assessing existing methodologies and indicators available to assess biodiversity impacts of trade. The assessment included a systematic analysis of the strengths and weaknesses of different methodologies as well as gaps in the overall assessment framework. As a part of the process, relevant experts and research institutes on the field were consulted, to support the analysis.

Since 1999, the European Commission has been conducting Sustainability Impact Assessments (SIAs) on all negotiated Free Trade Agreements (FTAs) with non-EU countries. At the core of SIAs is the causal chain analysis (CCA) used to identify the relevant cause-effect links between the trade measures proposed and the economic, social and environmental impacts these measures may have. As such CCA forms the basic framework for identifying and assessing possible biodiversity impacts of FTAs, using both qualitative and quantitative means.  

The study concluded that the existing approach to assessing impacts of trade on biodiversity in the context of SIAs is not adequate because it does not assess and integrate those impacts in a comprehensive or systematic manner. Consequently, a novel approach building on a) a more systematic use of biodiversity indicators and b) a more synchronized and fit-for-purpose use of different methods is needed. This conclusion is supported by the review of existing knowledge and the views of experts working in the field.

It is foreseen that CCA will continue to form the framework for overall assessments, with qualitative methodologies playing an integral role in identifying and assessing the complex outcomes of trade on biodiversity. However, the study concludes that a more advanced qualitative approach, with a comprehensive set and application of biodiversity indicators, reflecting both the possible scope and time scale of impacts, is designed and implemented in the context of the SIA’s CCA.

Economic models alone are unfit to assess impacts of FTAs on biodiversity, ecosystems, and ecosystem services. Additional approaches are needed to assess the impacts of economic scenarios on biodiversity. To address this, the study has identified a number of quantitative approaches that could be taken up to complement the existing practices, ranging from relatively simple assessment of relationships between economic activity and biodiversity indicators to modelling the causal relationships between drivers for change and impacts on biodiversity.

Finally, the study urges dedicated efforts to be taken to provide guidance for and mainstream assessing biodiversity impacts of investment liberalisation in the context of EU trade in the future, building on the broader FTA impact related conclusions and recommendations outlined above.

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