The EU regulation on combating deforestation (EUDR) could well be in breach of World Trade Organization (WTO) rules, according to a report by the ECIPE think tank, published on Thursday 26 September. The authors of the document based their analysis on two examples of US legislation with similar contours, which have been the subject of arbitration at the WTO.
The General Agreement on Tariffs and Trade (GATT), which dictates the rules of the WTO, prohibits member countries from discriminating between imports and local products. Exceptions are provided for in Article 20 of the GATT in order to achieve “legitimate” policy objectives relating to the protection of human or animal health, for example. However, measures taken within this framework must not discriminate against a third country for an identical product or manufacturing process.
In its current form, the EUDR does not allow exporting countries to have their mechanism for preventing deforestation recognised. Such local mechanisms do exist, however, and have proved their worth, according to ECIPE. This is the case of the ‘Amazon Soy Moratorium’ (ASM) in Brazil, which certifies that soybeans do not come from areas deforested after 2008. However, this label does not automatically mean that Brazilian soya is compatible with the objectives of the EUDR.
In addition, the ban in the European regulation on importing any product from deforested land after 31 December 2020 does not take into account the fact that some countries allow deforestation to take place legally, while still meeting the objectives of the Paris Agreement, according to the authors of the report.
So, as has already been the case in previous WTO arbitrations, the EU could be accused of “unjustified extraterritoriality” with its regulation on imported deforestation.
In the 1990s, the United States was the subject of arbitration at the WTO over a law banning shrimp imports from countries with no turtle conservation system. The system in question had to be certified by an American body. The WTO Appellate Body only authorised this law once the Americans had agreed to automatically take account of equivalent turtle conservation practices in third countries.
“If the EU is open to dialogue and able to grant deforestation-free status (and therefore market access) on the basis of the acceptance of results-based declarations of no deforestation, it is plausible that the EUDR could be considered non-discriminatory and calibrated to its objectives”, say the authors of the report. (Original version in French by Léa Marchal)