Aiming for Zero: mapping the impact of the EU's Action Plan on Pollution on its ‘green’ trade policy

The EU Action Plan 'Towards Zero Pollution for Air, Water and Soil' (let’s call it the “ZPAP”) has the objective of:

“including pollution prevention in all relevant EU policies.”

Given the transboundary and cross-cutting nature of pollution, it’s unsurprising that many of the measures canvassed have an external dimension. Here’s an overview of how some of the pathways to ‘zero pollution’ may interact with the EU’s ‘green’ trade policy.

Enhancing and embedding commitments under MEAs

The ZPAP recalls the EU’s commitment to enhancing obligations under the Basel, Rotterdam, Stockholm and Minamata Conventions on waste electric and electronic equipment, hazardous chemicals, persistent organic pollutants and mercury respectively. These four Conventions figure among fifteen MEAs identified by the WTO as including “trade measures” to control environmental damage. The actual trade mechanisms vary, ranging from reporting requirements of transboundary movements to the inclusion of trade sanctions to encourage compliance.

Any increased ambition secured at international level under those MEAs may do more than just modify the scope of the international obligations the EU is bound by. Why?

According to the ZPAP, the EU will also work with partners:

“for the ratification and effective implementation of relevant multilateral agreements on pollution”.

In other words, the EU is likely to seek to further embed such enhanced MEA commitments into its bilateral trade relations. How likely is this to succeed?

It depends on the terms of the trade agreement.

The EU has been promoting compliance with MEAs through its FTAs for some time. In many cases this takes the form of a clause which reinforces the commitment of the parties to comply with their existing obligations under those MEAs to which they are party. In other words, they promise to do what they promised to do already. When both parties sign up to enhanced MEA provisions, assuming the reference to the MEA in the FTAs is dynamic (which it usually is), the scope of the obligation under the FTA expands automatically.

Of course, it may not always be so straightforward. For instance, where one party is either not a signatory to the MEA, or an MEA is not explicitly incorporated into the FTA, it comes down to the willingness of the parties to read in or beef up their FTA obligation to match the new multi-lateral ambition.

Not everyone may be keen to join the party. China, for instance, has historically had a very limited approach to incorporating environmental obligations into its trade agreements and has shown reticence to enter into new commitments in the environmental sphere. [See my previous article on China here].

Whilst this potential for divergence might mean that there is no guarantee that all enhanced MEA commitments will percolate down to all EU bilateral trade relations, at the least, the potential for ripple effects is there.

Implementation and enforcement of Trade and Sustainable Development chapters

Echoing the TPR, the ZPAP promises to strengthen TSD commitments – including at the enforcement level.

To recap, TSD chapters in EU FTAs currently have separate procedures for disputes, which involve a request for consultation and the creation of a panel of experts. Whilst the Panel can issue recommendations, the consultations focus on finding a mutually acceptable solution and on exerting public/political pressure to achieve compliance. Strengthening TSD enforcement to encompass environmental commitments, including those relating to pollution, would reinforce the legal links between economic repercussions and non-respect of those obligations. It is an approach (sanctions v promotion) that is more closely aligned to the way the US and Canada already integrate environmental commitments in their trade agreements.

Evaluating pollution-related impacts in trade policy initiatives and free trade agreements

Another ZPAP promise yes, but what will this mean exactly?

The EU already carries out Sustainability Impact Assessments before all major trade negotiations. These examine a range of environmental factors, including pollution. The EU also carries out ex-post assessments of its Trade Agreements which look at environmental factors. For a recent example, the ex-post evaluation of the impact of trade chapters of the Euro-Mediterranean Association Agreements with six partners published earlier this year identified impact areas of particular significance as including:

“air pollution (also in relation to energy use and mix), natural resources (notably water resources and livestock), waste, and the greening of the economy (incl. trade in environmental goods and services).”

The ZPAP implies that the scope of those evaluations could be broadened (e.g. to all trade policy initiatives). The details of how this might be done are yet to emerge, but the Commission’s recently published Methodology to better assess trade and biodiversity impacts  may be a source of inspiration.

Global Agreement on Plastics

Plastics are a major concern. Also big business. The global market for plastic products was recently valued at more than $1 trillion, projected to grow to $2 trillion by 2022 (see the Final Report of the 2020 session of the UNEA). The ZPAP reiterates the EU’s commitment to securing a global agreement on plastics and the EU is not alone on this. More than 100 countries have called to establish a global agreement under the United Nations Environment Program (UNEP). An ad hoc open-ended expert group on marine litter and microplastics was established at the third session of the UN Environment Assembly (UNEA) and first met in 2018 . The online part of the fifth session of the UNEA held earlier this year confirmed plastics are still on the agenda. But apparently negotiations are unlikely to resume before the next in person session later this year. The management of plastics also features in the EU Communication on a sustainable blue economy and there are other industry-led initiatives that are building momentum as well. Plastics are also informally under discussion in the WTO. So lots of discussions in lots of fora.

Due diligence

Another mechanism that features prominently in the TPR also gets a mention in the ZPAP: the forthcoming rules on sustainable corporate governance will introduce due diligence duties across economic value chains:

“including as regards environmental impacts related to business operations”.

For now the Commission’s legislative proposal is a work in progress. For an overview of the European Parliament’s resolution of 10 March 2021, see here.

Technical Standards

The ZPAP highlights that waste electrical and electronic equipment (WEEE) and waste batteries are among the fastest growing waste streams, notably in developing countries. Where the EU introduces new standards to address the whole life cycle of products, these standards may fall within the scope of the TBT Agreement. For example, the Commission proposed a new Batteries Regulation (with Annexes) on 10 December 2020 and it was notified under the TBT Agreement for comments.

Conclusion

Pollution takes many forms and has many different adverse consequences. It doesn't respect boundaries and the potential interface with trade policy is undeniable. Trade can also be a tool to reduce pollution. For instance, promoting clean technology, raising standards and stimulating R & D. This is one domain where zero is definitely worth aiming for.