A ‘non-paper’ issued by the two countries, seen by ENDS, calls on the bloc to “raise the ambition and improve the implementation” of trade and sustainable development (TSD) chapters in future agreements.
While the EU’s more recent deals, such as those with Japan and Canada, contain stronger TSDs than in the past, they have nevertheless come under fire from campaigners for their potential impact on the climate.
The Franco-Dutch paper suggests that TSDs could contain commitments to “cooperate on climate policies such as carbon markets” and to implement the post-2020 framework of the Convention on Biological Diversity.
In addition, the EU could offer enhanced market access to partners in exchange for “effective implementation of TSD provisions”, while retaining the right to withdraw specific tariff reductions should the provisions be breached. “This approach would allow the EU to bear the fruits of its cooperative approach while strengthening enforcement,” reads the document.
The two countries call for the Paris Agreement to become an “essential element” in comprehensive trade deals including those currently being negotiated and any existing agreements that require updating.
That proposal goes further than the commission’s current position. Trade commissioner Phil Hogan said in February that a pledge to enshrine the agreement in all trade agreements will not apply to those currently under negotiation.
The document also welcomes the commission’s pledge to investigate a carbon border adjustment mechanism, as set out in the European Green Deal, as a way to tackle the threat of carbon leakage, or firms leaving the EU for regimes with laxer climate regulation.
“The Netherlands and France look forward to the proposal of the European Commission on the different possibilities of a carbon border adjustment mechanism (CBAM),” it says.
“A CBAM could strengthen the effectiveness of the European Union’s climate policy and reduce the EU carbon footprint, hence contributing to the global climate objectives, if designed properly.”
In line with commitments made by Hogan, who has been tasked with drafting the proposal, the countries stress that the mechanism must comply with World Trade Organization (WTO) rules and “should be implemented with a step-by-step approach”. They also welcome the WTO’s decision to hold a dedicated event on climate change and trade at its next ministerial conference.
Follow-up: Commission information on trade negotiations