At a meeting of the Dispute Settlement Body of the World Trade Organization (WTO) on Monday 24 February, Indonesia, Russia, Brazil, the United States and Saint Vincent and the Grenadines warned that European environmental measures could constitute barriers to trade. They were reacting to the report of the WTO panel in the dispute between the EU and Indonesia over the ‘RED II’ directive.
Jakarta had accused the EU of discriminating against Indonesian palm oil exports with its directive, but WTO arbitrators found in favour of the European Union for the most part (see EUROPE 13555/14). The ‘RED II’ Directive, which classifies palm oil-based biofuels as posing a high risk of indirect land use change, is no more restrictive of trade than is necessary, according to the judges hearing the case.
However, Indonesia and the four observer countries mentioned above believe that such a ruling could lead to the justification of more and more measures restricting trade. Brazil hopes that the EU/Indonesia arbitration will not set a precedent or create “a legal environment conducive to the proliferation of such unilateral measures”.
As a reminder, Brazil is one of the countries that have often criticised the EU Regulation against Imported Deforestation (EUDR) and the Carbon Border Adjustment Mechanism (CBAM).
The United States also expressed its disappointment at the ruling in favour of the EU, which, in its view, illustrates the “overreach” of the judges.
With their remarks, these countries are calling into question the work of the WTO panels. (Original version in French by Léa Marchal)