Regulating Trade in Forest-Risk Commodities

Abstract

There is a considerable urgency in addressing the impact stemming from the production of certain agricultural commodities on ecosystems and local communities. Forest-risk commodities (FRCs) such as cocoa, coffee, palm oil, rubber, soy, maize and beef generate negative impacts on deforestation, ecosystem destruction and human rights of the communities affected. In light of the international obligations entered into by the European Union (EU) and its Member States, this paper proposes a possible measure regulating the entry into the EU market of FRCs via due diligence requirements for traders. It subsequently assesses its compliance with international trade law obligations under Articles I:1 and III:4 of the General Agreement on Tariffs and Trade (GATT). The paper illustrates that it is possible to design World Trade Organisation (WTO) compliant legislation addressing trade in FRCs. In assessing compatibility of the proposed measure with Art. XX GATT, the paper suggests possible approaches to implement sustainability criteria for FRCs.

A revised version of this article is published on the Journal of World Trade 54(1)

Keywords: WTO law, deforestation, environmental due diligence, human rights due diligence, non-discrimination, trade and environment, EU value chain regulation

JEL Classification: K20, K32, K33