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TWN
Info Service on WTO and Trade Issues (Sept24/13) Geneva, 27 Sep (D. Ravi Kanth) — The European Union on 25 September seemingly turned down appeals from the World Trade Organization’s Director-General as well as several countries, including the United States, to delay the implementation of its allegedly unilateral regulation on deforestation-free products, which is slated to come into effect on 30 December 2024, said people familiar with the development. At a meeting of the WTO’s Committee on Agriculture on 25 September, the EU appears to have rebuffed calls from the DG, Ms Ngozi Okonjo-Iweala, several industrialized countries such as the United States, Canada, Australia, and New Zealand, and some developing countries, including Indonesia and some from South America, to delay the implementation of the unilateral deforestation regulation. In what appears to be a rather defiant intervention at the meeting, the EU said that it will press ahead with its proposed regulation on “deforestation-free” products to address deforestation and forest degradation, or breaches of local environmental and social laws. The proposed products under its regulation include seven commodities – cattle, cocoa, coffee, oil palm, rubber, soya, and wood. The EU’s list also includes several derived products, such as meat products, chocolate, pulp, and paper. Interestingly, if the DG, who is seeking a second term of office, is unable to stop the EU from implementing its unilateral deforestation and forest degradation strategy, then her alleged claims to solve crucial problems in agriculture and other areas during her second term may not be taken seriously, said a trade envoy, who asked not to be identified. As previously reported in the SUNS, members raised several questions on the EU’s proposed regulation. Indonesia sought clarity on several aspects surrounding the EU’s country benchmarking system. An Indonesian official said that his country is an archipelago with more than 17,000 islands. “If each marking is based region-wise, when one region is mislabeled as high-risk, will other commodities in that region be considered high-risk? If it is commodity-based, will the label of a particular commodity in one region also apply to that particular commodity from other regions?” The EU’s allegedly “one-size-fits-all” approach could cause chaos in the supply chains and impose burdensome conditions on WTO members, said people familiar with the development. The EU, however, declared that it would “get everything ready for a smooth implementation of the regulation.” The EU claimed that it would use scientific data for the classification of high-risk and low-risk countries. Brussels maintained that the regulation is consistent with the WTO rules. Even if the EU’s regulation is challenged before the WTO’s Dispute Settlement Body, there would not be any early resolution given the continued dysfunction of the Appellate Body, said a legal analyst who asked not to be quoted. Several countries including the US, New Zealand, Canada, Australia, India, Indonesia, Paraguay, and Ecuador among others raised several questions, requesting the EU to provide more clarification on its deforestation and forest degradation strategy. In document G/AG/W/249, the US, Canada, Australia, and New Zealand said that while they share “the EU’s desire to address global deforestation, and to halt and reverse global forest loss,” they are “deeply concerned about the significant impact that the implementation of this regulation will have on global trade, and the high compliance burden it places on countries and producers whose systems are not linked to deforestation.” The US, Canada, Australia, and New Zealand maintained that “it is our firm view that this is not the most trade facilitative approach to achieve the objective of protecting global forests.” India raised several questions, noting that “the EU deforestation regulation (EUDR) entails due diligence procedures including the certification for deforestation-free production of the covered commodities.” New Delhi asked whether the EU could “clarify if its regulation is intended to eventually replace the existing certification schemes in the export countries”. India also asked that “given the existing uncertainties regarding EUDR’s implementation procedures, is the EU considering reassessing the measure or postponing its entry into force?” Indonesia, Paraguay, and Ecuador also raised questions over the EU’s measures. Indonesia said it continues to have concerns “surrounding the European Union Deforestation-Free Regulation (EUDR), especially regarding the implementation of EUDR that will soon be mandatory.” Indonesia expressed sharp concern that the EU “has not provided enough information for the implementation of this policy, and thus leaving producing countries with very short [adaptation] and preparation period.” Earlier, the EU claimed that Brussels “will develop the country benchmarking system based on the availability of transparent data in the country.” Indonesia asked, “how will the EU resolve if there are discrepancies or lack of data availability among importers, manufacturers, and exporters around the sourcing of goods?” Indonesia further asked, “to ensure compliance, what deforestation standards will be used?” Indonesia, Paraguay, and Ecuador also highlighted the following: 1.“Could the EU provide further information about the progress of the methodology developed by the Multi- Stakeholder Deforestation Platform regarding the main criteria for assessment in country benchmarking?” 2. “How can the EU guarantee that the assessment regarding criteria such as information supplied by governments and third parties (NGOs, industry) is valid?” 3. “The regulation requires EU businesses placing wood, coffee, cocoa, palm oil, and several other commodities in the EU market to demonstrate that these goods aren’t linked to deforestation. In practice, the burden of supplying data to show compliance will fall largely on suppliers, many from countries where small- and medium-sized firms predominate. Although we are currently in the process of registering certain aspects of our small producers related to the EUDR, we would like to proceed at a faster pace since time is short. As such, could the EU provide support and facilitate international cooperation through knowledge, resources, and technological solutions?” 4. “Has the EU prepared any solutions and assistance aimed at developing the capacities of our regional and local governments, which will be critical in assisting our small producers and exporters in meeting the required standards?”
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