WTO Committee Discusses EU Plans to Combat Deforestation

The World Trade Organization’s (WTO’s) Committee on Trade and Environment (CTE) recently held its first meeting of 2022. Among other issues on the agenda, members discussed efforts by the European Union (EU) and the United Kingdom to prevent global deforestation and make trade in farm commodities more sustainable. Several committee members urged the EU to keep in mind the needs of developing countries in its plans to tackle deforestation by regulation.

The European Commission unveiled its legislative proposal for a law on deforestation-free products last November, saying it aimed to minimize the risk of goods associated to deforestation and forest degradation entering the EU market. The regulation would ban certain commodities unless they were deforestation-free, produced in accordance with the relevant legislation in the country of production, and covered by a due diligence statement.

The planned law—part of the European Green Deal—would cover beef, cocoa, coffee, palm oil, soy, and wood, as well as processed products such as leather, chocolate, and furniture. These items were selected following a “thorough scientific and cost-benefit analysis of their impact on deforestation,” the EU told CTE members on February 2.

According to Forbes, the Commission estimates that by clear-cutting forests to grow crops, that small handful of commodities alone adds more than 31.9 million tons of carbon emissions to the Earth’s atmosphere annually—a major contributor to greenhouse gases and climate change.

The regulation would require companies doing business in Europe to show that their products don’t contain ingredients that have been cultivated on deforested land. Businesses that don’t comply could face fines.

EU Proposal Raises Questions

Affected trading partners have criticized the EU proposal, saying it would impinge on sovereignty and risks becoming a trade barrier. Others, including members of the European Parliament’s Greens/European Free Alliance political group, have questioned the effectiveness of the plan, which will go through the ordinary legislative procedure this year, with adoption possible in 2023.

But green groups have welcomed the EU’s plans, noting that some large forested countries (Brazil, for example) have whittled away legal protections. Still, while activist groups including Mighty Earth have called the proposal a “major leap forward,” they say it should include fragile ecosystems such as Brazil’s Cerrado savanna and peatlands in Southeast Asia, as well as rubber.

At the CTE meeting, several WTO members said that any sustainability initiatives should consider the needs and capacities of developing countries, especially those that have suffered massive deforestation in the past. Some members also urged the EU to promote multilateral cooperation and dialogue in its environmental efforts.

The world has lost a third of its forests, and the United Nations Food and Agricultural Organization estimates that 10 million hectares (24.7 million acres) have been cut down every year in the decade since 2010. However, the net loss in forest area globally in that period fell from 7.8 million hectares a year in the 1990s to 4.7 million hectares a year from 2010 to 2020.

About 95% of the world’s deforestation occurs in the tropics—59% in Latin America and 28% in Southeast Asia. Commodity-driven deforestation—mainly the clearance of forests to grow crops such as palm oil and soy and create pastureland for beef production—accounts for nearly two thirds of forest loss in those two regions. In Africa, forests are mainly cut and burned to make space for local, subsistence agriculture or for fuelwood for energy.

That said, it should be noted that Asia had net gains in forest area from 1990 to 2020, with more than 20% of forests being regenerated through plantations.

Britain, Indonesia Move Ahead With FACT Dialogue

Also at the CTE meeting, the United Kingdom outlined the Forest, Agriculture, and Commodity Trade (FACT) Dialogue it began with Indonesia last year. This initiative brings together 30 countries that are among the biggest producers and consumers of agricultural commodities to discuss how to make trade more sustainable and to prevent deforestation resulting from farm practices. Twenty-eight countries have agreed on a joint statement on “principles for collaboration” that sets out a roadmap for action, the United Kingdom told the CTE meeting.

The FACT co-chairs will be reconvening officials in March to finalize the workplan for 2022 and “welcome further exploration of how to align the FACT and WTO processes,” the WTO said.