WTO Uproar on EU Deforestation Policy

A group of developing and developed members appealed for the EU to postpone the implementation of its new Regulation on Deforestation-Free Products (EUDR).

This regulation, set to take effect on 30 December 2024, will require a variety of agricultural products sold in the EU market to be "deforestation-free," meaning they must not result from recent (post-31 December 2020) deforestation, forest degradation, or breaches of local environmental and social laws.

This move has many exporters on edge because the EUDR covers more than just seven commodities (i.e., cattle, cocoa, coffee, oil palm, rubber, soya, and wood); it encompasses a wide range of derived products, such as meat products, chocolate, pulp, and paper-- just to mention a few.

Bedfellows in opposition to the EUDR include Brazil, Indonesia, Paraguay, Ecuador, Guatemala, Thailand, New Zealand, Australia, and the United States.

"Deep Concerns"

The critics expressed "deep concerns" over the policy, citing multiple reasons, according to a Geneva official.

First and foremost, Indonesia highlighted the confusion surrounding the benchmarking system. Indonesia stated, "Indonesia is an archipelago country with more than 17,000 islands. If each marking is region-based, when one region is mislabeled as high risk, will other commodities in that region be considered high risk? If it is commodity-based, will the label of a particular commodity in one region also apply to that particular commodity from other regions?"

Other concerns include the one-size-fits-all approach, the absence of an effective system to support compliance, limited time to comply, and costly and burdensome procedures for small producers.

Trading partners now have to brace themselves for a bumpy ride as the EU made clear its determination to "get everything ready for a smooth implementation of the regulation."

The EU stated that the classification of high-risk and low-risk countries will be based on scientific data and internationally recognized sources. The EU emphasized that the regulation was designed to comply with WTO rules and will apply to the most relevant commodities in a non-discriminatory manner.

The EU introduced several ongoing programs at different levels to help developing countries address the needs of smallholders and achieve deforestation-free supply chains. These include activities already undertaken in countries like Brazil and Indonesia and a 7-million-euro fund, which will be a flexible and on-demand instrument to assist smallholders with geolocation, mapping, and traceability.