Recently, the European Union (EU) announced that all its future preferential trade agreements (PTAs) need to include a reference to the ratification and implementation of the Paris Climate Agreement, starting with the trade agreement concluded last year between the EU and Japan. Indeed, the EU-Japan Economic Partnership includes a reaffirmation of the commitment to implement the Paris Agreement.

The move to refer to the Paris Agreement seems to be the result of an initiative by the French government demanding that the Paris Agreement becomes an integral part of future EU trade agreement. The EU’s trade commissioner, Cecilia Malmström, quickly confirmed that this is now the EU’s official policy stance.

How can we make sense of this move? While more and more PTAs include environmental provisions, the inclusion of climate-specific provisions is a rare phenomenon. Whereas many countries still shy away from linking trade agreements to climate policy commitments, the EU is the champion of integrating the trade and climate agendas. Against this background, the recent decision to not only make the ratification but also the implementation of the Paris Climate Accord an integral part of EU PTAs seems a logical next step.

History shows that this issue linkage can be effective. Five years ago, the EU requested Russia to ratify the Kyoto Protocol before approving its WTO accession. This suggests that more can be done for environmental purposes in cases the EU leverages its trade power.

Consequences for US withdrawing from Paris Agreement

What are the likely consequences? In light of the announcement of withdrawal of the United States (US) from the Paris Agreement most commentators discussed the implications of the EU’s new initiative for the TTIP negotiations. However, since the TTIP negotiations are on hold due to the more protectionist policy stance of the Trump administration, the practical impact on the transatlantic trade relations is limited.

Implications for developing and emerging countries

At the same time, if one takes a closer look at the ratification list of the Paris Agreement it becomes apparent that Colombia and Turkey, which are currently negotiating trade agreements with the EU, have not yet ratified the Paris Agreement. They would have to ratify Paris before being able to strike a trade deal with the EU. In addition, the fact that a number of African, Caribbean, and Pacific (ACP) countries have not yet ratified Paris could become an issue in case the EU and the ACP countries were to re-negotiate their Economic Partnership Agreements (EPAs).

After all, the inclusion of references to the Paris Climate Accord in future EU trade agreements insures against the potential withdrawal of the EU’s partner countries, following the example of the Trump administration, from the Paris Climate Accord.

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Comments

  1. Sophia Paulini

    Thank you for this article!

    While I agree that EU FTAs mentioning climate issues and, specifically, the Paris Agreement is a positive progression, it is in my view too optimistic to say that the EU links trade agreements to climate policy commitments and that the Paris Climate Accord will likely be an integral part of EU FTAs.

    For example, a closer look at Art. 4 (4) of the Trade and Sustainable Development Chapter (Chapter 16) in the EU-Japan FTA, which deals with the UNFCCC and the Paris Agreement, reveals that it contains only reaffirmations of commitments already made, non-binding best endeavor clauses as well as commitments to cooperate that are so generally and vaguely worded that they risk to be practically ineffective.

    It is also important to keep in mind that the EU (unlike, for example, the US) does not make the commitment of its trade partners to comply with certain environmental standards a condition for market access. I, however, agree that it will be interesting to see what the EU will do about Turkey once the negotiations go ahead and, of course, about the US should TTIP be revived!