Trade, climate and human rights – at odds or reconcilable?
Trade policy needs a fundamental overhaul. For decades, it has been focussing on liberalisation and deregulation, often to the detriment of human rights and nature. But that’s not inevitable. International trade and trade policy could help mitigate some of the most pressing issues of our time – global inequality, human rights abuses and climate change – if we dare to rethink it.
The Amazon rainforest is a natural wonder, home to one in 10 known species, making its forest and rivers the most biodiverse on Earth. It’s also the home of several hundred groups of Indigenous Peoples and acts as a massive carbon sink, helping to combat climate change.
All of this is at danger of irreversible destruction. 17% of the Amazon forest has already been cut down. Scientists say at 20-25% deforestation, the rainforest will reach a tipping point at which it can no longer generate enough rain to sustain itself and will develop into a dry savannah. This would mean mass extinction for thousands of plant and animal species, the loss of livelihood for many of its inhabitants and the release of billions of metric tons of carbon, accelerating the climate crisis.
This deforestation is being driven, in part, by unsustainable patterns of trade. Ever since the colonisation of South America by Europeans, a system to exploit the immense richness of the region has been at work. Millions of tonnes of goods, like coffee, sugarcane and raw materials were shipped to Europe and traded around the world; a model so entrenched it continued even after independence. Today, the Mercosur – a trade bloc consisting of Brazil, Argentina, Uruguay and Paraguay – still predominantly exports agricultural goods and natural resources.
Europe’s hunger for raw materials and foodstuffs makes us implicit in the destruction of nature, not least in Amazonia, where 80% of deforestation is driven by the expansion of agricultural land for cattle ranging. In Brazil, cattle pastures occupy 450,000 square kilometres of deforested land. That is equivalent to the size of Sweden, almost twice the size of the United Kingdom.
Every year, the EU imports 100,000 tonnes of beef from Brazil alone, a quarter of the EU’s beef imports. Brazil also accounts for more than half of the EU’s soy imports, which are mainly used for animal feed in meat production. A study from July 2020, published in Science magazine, shows about a fifth of beef and soy exports from the Brazilian Amazon and the adjacent Cerrado region to the EU has contributed to deforestation.
But despite the fact European consumption is already fuelling deforestation in South America, the EU is in the process of closing a trade agreement with Mercosur which would maintain and deepen the current unsustainable trading patterns. It would liberalise imports of beef, sugarcane and other primary commodities from Mercosur into the EU and offers clear proof that EU trade policy is totally at odds with the bloc’s climate ambitions.
The EU-Mercosur agreement must be stopped in its current form. But it is not inevitable that our trade relations fuel destruction. Trade could help to transform our economy towards climate neutrality and to decrease inequality worldwide – but it would require a complete overhaul of current trade policy.
At a minimum, new trade deals must not encourage trade in environmentally polluting products such as cars with internal combustion engines, fossil fuels or harmful chemicals. Instead, they ought to facilitate trade in low-carbon products and the dissemination of green technologies.
For products often linked to deforestation, new trade rules must be established. First of all, the EU should make market access for products such as soy, beef, timber and leather dependent on clearly defined and measurable progress in ending deforestation and human rights abuses, thereby setting preconditions for any new trade facilitation.
Secondly, market access must be revoked if deforestation or human rights abuses escalate again at a later stage. For this to work, clearly defined criteria are needed which would trigger such a mechanism and it must be possible for NGOs and civil society representatives to activate a review.
Thirdly, the EU must legislate to ban any products from being sold in the EU whose production is linked to the destruction of forests or other sensitive ecosystems or to human rights abuses and hold companies accountable for environmental or human rights abuses that occur within their supply chains. Two separate legislations to this end are expected to be proposed by the European Commission in late 2021 but it remains to be seen whether they will be ambitious enough to encourage companies to really transform their operations.
At COP26, another non-binding pledge to end deforestation by 2030 has been signed. Agreements like these are no replacement though for a deep review of trade rules. As it stands the EU and other big trading nations are miles away from aligning trade rules with climate action and global justice objectives.
Cornelia Maarfield is Senior Trade and Investment Coordinator at Climate Action Network Europe