Paris and The Hague say EU must toughen enforcement of green trade

Paris and The Hague say EU must toughen enforcement of green trade

Dutch and French trade ministers say Covid-19 has focused minds on global trade and climate change

France and the Netherlands have warned that the EU has been too slow to integrate its environmental and social demands into international trade deals, saying the bloc needed to enforce compliance with measures to tackle climate change.

Dutch trade minister Sigrid Kaag and her French counterpart Jean-Baptiste Lemoyne, in a telephone interview with the FT, said they would urge Brussels and other capitals to implement proposals that Paris and The Hague circulated this week to place binding obligations on partner countries to honour green commitments and international labour protection rules.

The plans, revealed by the FT, include making respect for the Paris climate deal an “essential element” of future trade agreements — placing the 2016 accord on a par with respect for human rights and the rule of law — as well as ensuring that the EU can reimpose tariffs if countries do not live up to obligations.
Ms Kaag said that the move was driven by political and public concerns about Europe’s “inability, in a way, to raise the bar” on implementation of sustainable development requirements in trade deals. “It can’t just be words on a page and five years later, once we’ve concluded the negotiations, or 10 years, we say, ‘Oops, what are we going to do about that’,” she said.

While the plans have been under development since before the Covid-19 pandemic, the ministers said that the crisis had focused minds on the kind of economy Europe wanted to build.

“What’s certain now is that we can see that the epidemic brings back into the public debate a certain number of questions about globalisation,” said Mr Lemoyne. “Protecting the climate, protecting a level playing field is not necessarily protectionism.”

Paris and The Hague briefed capitals last month on their intention to come up with a joint plan, but the move nonetheless made waves in Brussels because of the unlikelihood of an alliance between the Netherlands, one of the EU’s most free-trading nations, and France, which has consistently demanded that opening up the EU market should come with strict conditions attached.

Diplomats have seen the move as a signal of the EU shifting the focus of its trade policy in an era of acute public concern about accelerating environmental degradation and the risk that foreign competition could undermine the bloc’s efforts to green its economy.

“We see sometimes that these chapters [of trade deals] are sometimes not respected, that the only weapon that we have until now is ‘name and shame’,” Mr Lemoyne said.

“We want at the same time to increase the scope of these sustainable development chapters . . . and also it’s important to have better implementation, an effective implementation,” he said, adding that the approach should cover not just climate change, but also other environmental concerns such as biodiversity.

French President Emmanuel Macron, faced with falling approval ratings from the green and centre-left voters who helped him win the 2017 elections, has sought to emphasise his environmental and social credentials in recent months. He has championed the fight against climate change, suspending economic reforms, and offering generous state support for workers affected by the Covid-19 crisis.

Parties in the Netherlands’ ruling coalition are also keen to appeal to the green vote, and to prevent a wider backlash against international trade deals. Both Paris and The Hague are facing political headwinds in securing the ratification of an EU deal with Canada that has become a lightning rod for anti-globalisation protests. The two countries also have political reservations about an agreement the EU struck with the South American Mercosur bloc last year, including on environmental grounds.

The connection between trade and sustainable development “is a logical one, and it was a long time overdue. And here I think France and the Netherlands team up much more than meets the public eye,” said Ms Kaag. She said that the two countries’ starting point was how to ensure respect for the Paris deal, which sets emissions-reduction targets.

“On the one hand, of course, we maintain the importance of an open and rule-based regime, but we also really want to look for more creative solutions, I would say, while ensuring flexible and robust international supply chains,” she said.

The two ministers welcomed plans by the European Commission to introduce a carbon border-adjustment tax or equivalent measure as part of its “green deal” strategy. Paris and The Hague also want to galvanise efforts to ensure companies abide by responsible business conduct standards when they operate abroad.

Mr Lemoyne insisted that the move was not about “autarky, or the putting in place of a blind protectionism” in the post-Covid world. “We are all countries on the path of sustainable development,” he said. “The trade agenda has to fully integrate all these dimensions.”

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