Some provisions of the Green Deal, including its border carbon adjustment mechanism, are of concern to WTO members, who also called for compensations in the Brexit negotiations at a virtual meeting of the Committee on Market Access on Tuesday, June 9.
The Russian representative was the first to express concern about the compatibility with multilateral trade rules of the initiatives announced by the EU under its Green Deal, in particular its carbon adjustment mechanism (see EUROPE 12439/14), according to a Geneva source. Moscow, which asked for clarification on the sectors involved, also expressed concern about the inclusion in the EU budget of revenues generated by carbon import duties to feed the EU bloc's recovery plan. The US and China also indicated that they will closely monitor these developments, encouraging the EU to fully examine the WTO compatibility of its measures.
“As long as the EU's trading partners do not take comparable climate action, there will be a risk of carbon leakage that we need to address” the EU representative defended. The representative also recalled that the Commission, in order to document its proposal, would first carry out an impact assessment which would include WTO compatibility.
Compensation on Brexit
The renegotiation of tariff rate quotas between the EU and London under Brexit also continues to cause discontent among key EU trading partners (see EUROPE 12370/17, 12203/23, 12266/31).
While WTO rules allow a member to adjust its quotas, this exercise should not affect other partners. But Russia, joined by China, the United States, Australia, Canada, India, Indonesia, Mexico, Paraguay and Uruguay are alarmed that some of these quotas may restrict their access to both markets and have called on the parties to submit a proposal to compensate the main suppliers of the products concerned. (Original version in French by Hermine Donceel)