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Taking developing country interests into account when designing Green Deal trade policies

Today I gave a presentation on the implications of the European Green Deal  for agri-food trade with developing countries to a webinar organized by the European Landowners’ Organisation (ELO) (the presentation can be downloaded here and you can also listen to the presentation itself as well as the webinar as a whole at the following link). The presentation was based on a paper I am preparing on this topic commissioned by the ELO and the issues raised at the webinar will feed into the final version of the paper.

The urgent need to address the challenges that face our food system, to provide healthy and adequate nutrition for all and ensure decent livelihoods while remaining within planetary boundaries, is not in question. The European Green Deal and Farm to Fork Strategy requires that food placed on the market should not only be safe but also sustainable and contribute to better health outcomes. Trade policy is required to be coherent with and supportive of these objectives of the Green Deal.

Implementing these requirements and changes will have a significant impact on the competitiveness of EU producers as well as international trade in food. Much of the debate on the role of trade policy has focused on the feared competitiveness loss with competitive agricultural exporters such as the US, Canada and Brazil if the EU embarks on the transition alone.

But Green Deal and trade policy changes will also have implications for the vulnerable developing countries. The EU has committed to helping these countries reach the UN Sustainable Development Goals, particularly through its commitment to Policy Coherence for Development.

The purpose of the forthcoming paper, and today’s presentation, is to ask how the interests and needs of developing countries can be reflected in the design of trade policy measures so that the EU does not inadvertently make it more difficult for them to reach their Sustainable Development Goals.

Very happy to take further ideas in the comments.

This post was written by Alan Matthews.

Photo credit: Cocoa farmer from Wikipedia Commons, used under a Creative Commons licence.

24 Feb 2022. The link to the recording of the webinar was added.

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5 Replies to “Taking developing country interests into account when designing Green Deal trade policies”

  1. Dear Professor Matthews,
    this is a very interesting topic and I would like to read the upcoming paper.
    Can you already say when this paper will be available?

    Thank you very much and kind regards
    Matti

  2. Professor,
    Without discussing the merits and the legality – or lack thereof – of the imposition of PPM standards that do not alter the physical characteristic and nature of the product on third countries, is it reasonable to adopt trade measures based on the claim that the playing field is uneven when European producers are extremely well subsidized and compensated through the CAP to adopt such standards while producers in third countries are not? In this case, aren’t these PPM standards disguised barriers to trade and the existence of subsidies preventing the establishment of a level playing field in detriment to third countries producers? I hope you also address such topic in your upcoming paper.

    1. @Fernandes, this point has been raised on several occasions and absolutely deserves consideration. It is certainly the case that EU farmers benefit from very considerable public support, both in the form of existing tariff protection as well as public transfers through Pillars 1 and 2 of the CAP. And mirror clauses are advocated in part on the basis that they are intended to protect production capacity in the EU which can be seen as protectionist. Other considerations are also relevant. Mirror clauses would also apply to imports of, for example, tropical products that are not produced in the EU, reflecting the desire to raise standards in exporting countries. Also, within the EU, producers are expected to observe statutory minimum requirements as a requirement for eligibility for direct payments. It is these minimum requirements which would be expected to form the basis for mirror clauses that would apply to imports. Some elements of direct payments (eco-schemes, AECMs) pay farmers that go beyond these minimum standards, which would seem to be reasonable. But that still leaves a large proportion of direct payments that are paid as income support and which third countries can reasonably argue in part compensate for the cost of complying with the minimum standards. There are of course many other factors that contribute to determining relative competitiveness and that differ across countries (infrastructure, credit conditions, etc) that should also be taken into account when assessing whether a level playing field exists.

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