Environmental Supply Chain Regulations in a Changing Market Environment: Exploring the EU’s Regulatory Power in the Cocoa Sector in Ghana

Abstract

This working paper explores the European Union's regulatory power through supply chain initiatives, in the context of shifting market dynamics towards China and ASEAN. Focusing on the EU Regulation on Deforestation-free Products (EUDR) and the cocoa sector in Ghana as a most-likely case study, the paper employs qualitative data from semi-structured interviews to analyse the presence and potential of a Brussels effect. The findings suggest that while the EUDR could serve as a catalyst for ongoing sustainability and transparency efforts, emerging compliance structures contribute to the fragmentation of supply chains, reinforcing market segregation. Moreover, the paper argues that unilateral market access requirements tend to prioritise formal compliance over addressing substantive issues. The article highlights the complexities of externalizing EU regulations, critically discussing the lack of normativity in the theoretical framework of the Brussels effect and raising questions about North-South relations in global regulatory power dynamics.

Keywords: EU external action, environmental governance, regulatory power, market power, Brussels effect, supply chain, deforestation, cocoa, Ghana

JEL Classification: K23