- Indonesia, Brazil and others express EUDR frustration at WTO;
- US and China find themselves on same page for EU import rules;
- Green NGO support for EUDR treads carefully as smallholder impacts emerge
Recent meetings at the WTO indicate precisely the level of frustration among the EU’s trading partners on the EUDR.
At the last Committee on Agriculture meeting, Indonesia, India, China, New Zealand, Australia all called out the EU on its lack of information and clarity on the EUDR, where Indonesia “urged the EU to start responding clearly to questions.”
Indonesia, Brazil, Paraguay and Ecuador all stated:
“Numerous trading partners, especially developing countries, where most of native vegetation is still preserved, have no guidelines to comply with the EUDR, regardless of the actual risk of deforestation”
“[On] the eve of its entry into force, the EUDR lacks, for instance, the appointment of some national authorities, no sign of harmonic national-level supplementary legislation, clear criteria for due diligence paperwork, working IT system for data collection, reliable surveillance and mapping system for deforestation, among other indispensable information for trade predictability.”
Indonesia added:
“[A]ffected stakeholders, even EU operators, still lacked clarity on the implementation of the EUDR. The information system had not yet been properly established. Country benchmarking was far from being finalized, and far too often the EU did not have an answer to Member-specific questions, let alone its FAQs, which contained more than 80 questions. Indonesia questioned the possibility to prepare its constituents for the potential implications of this regulation as with only a few months remaining.”
At the same meeting, New Zealand, Australia, Paraguay and Ecuador also hit out at the EU’s lack of consultation:
“[We] express concern again about the high compliance burden placed on exporters to the EU, in particular for low-risk countries, and the impact the Regulation may have on global agricultural trade… We encourage the EU to consider how it could advance dialogue multilaterally on trade responses to environmental challenges.”
And in a rare show of unity, both China and the US found themselves on the same page, questioning the compliance burden of the scheme.
Trading partners, like businesses in the EU are waiting for clarity.
Getting Facts Straight on the US and the EUDR
The US position on the EUDR was made reasonably clear by the Biden administration, and was also expressed at the same WTO meeting, noting:
“The difficulty in the geolocation-based compliance and enforcement of EU’s deforestation regulation. The US, while noting that combating deforestation was a shared objective, flagged concern about EU’s prescriptive and poorly targeted approach to addressing global deforestation connected to agricultural commodity production. The US considered that the regulation could lead to costly disruptions throughout global supply chains without providing meaningful environmental outcomes.”
However, US-based environmental groups are calling this a “mistake”, saying that US producers are “perfectly capable of producing the products regulated by the EUDR without deforestation.”
This is true, and so are producers in Indonesia, Brazil – and the EU itself. But it’s a misrepresentation of the US objections.
Zero deforestation commodities are not the issue; the issues are: downstream supply chain complexity; and consideration of deforestation risk.
On complexity, there is no argument with the objectives of the regulation, but the fact that: there was no consultation with trading partners and processors and therefore ignores the reality of traceability through the supply chain; it is badly written, ignores commercial reality, is being poorly implemented and therefore will be trade disruptive.
On risk, US ranchers for example are wondering why they are subject to the same checks as Brazilian beef farmers, seeing themselves as much lower risk.
Similarly, arguing that a large number of businesses are in support of the EUDR is a misnomer; support for due diligence is not the same as support for full traceability that will exclude smallholders for European markets, as Fairtrade has argued.
If Western NGOs such as Mighty Earth continue supporting the EUDR in its current form, they need to tread carefully. The opposition of smallholder and anti-poverty organisations makes it apparent that it will exclude smallholders from EU supply chains.
Is that something they want to be aligned with?