WTO members concerned about the impact of EU climate initiatives on conditions for access to the European market

WTO members are concerned about complicating access to the European market due to climate initiatives and the entry into force of a “carbon tax” on the import of certain goods. In addition, the countries pointed to other EU protective measures – the use of anti-dumping investigations and the introduction of an “against economic coercion” mechanism, follows from the WTO review of the EU’s trade policy. However, it is impossible to challenge them – because of the blocking of the organization’s court.

WTO member countries are concerned about the impact of EU climate initiatives on the terms of access to the market of the countries of the union, according to the WTO review of the trade policy of the EU countries (for the EU, the USA, Japan and China, such a review is carried out every three years). The EU remains the largest trading partner of 53 countries, in total it accounts for 16.6% of global exports and 15.8% of imports (a trade surplus has persisted for more than a decade, except for the second and third quarters of 2022 due to rising energy prices).

Countries are most concerned about the European “green deal” and “carbon tax” (a mechanism that affects, in particular, the supply of cement, electricity, fertilizers, iron, steel and aluminum), which comes into force in the “transit” phase from October 1, 2023 . Concerns were also raised about the possible consequences of green taxation and public procurement, as well as restrictions on the supply of certain types of raw materials as part of an initiative to combat deforestation.

In addition, WTO members are dissatisfied with high tariffs and stringent requirements for the import of food into the EU countries, including regulations on the use of pesticides, the approval of genetically modified products, import quotas and “greater focus on market conditions” in support measures (including Farm to Fork program focused on sustainable food supply chains and food security). The report also mentions the frequent use of anti-dumping investigations and protective measures (especially in relation to the supply of steel and aluminum), as well as new measures to support the production of technological products in the EU.

The Russian Federation, within the framework of the WTO, complains about the illegality of the imposition of sanctions by the EU (the G7 countries also withdrew the most favored nation treatment for supplies from the Russian Federation) and the application of unilateral environmental standards. According to the head of the trade negotiations department of the Ministry of Economy, Yekaterina Mayorova, the mechanism for introducing unilateral restrictive measures against “economic coercion” (anti-coercion instrument) also raises objections from the Russian Federation and a number of other countries. The European Commission justified the need for its implementation by the possibility of faster responses (including raising duties) in case of pressure from third countries (the project was developed against the backdrop of friction with China and restrictions imposed by the country in response to diplomatic disagreements). The mechanism should work in conditions where decision-making at the level of WTO courts is blocked due to a shortage of judges in the appellate body, which also limits the possibility of holding any other proceedings within the organization.

“Over the past three years, the EU has introduced about 7.7 thousand trade restrictions against trading partners, and “received” only 3.4 thousand towards it. Nevertheless, the EU is hardly indifferent to how the outside react to its trade policy, since foreign trade accounts for more than 20% of its GDP. What is said in the review of trade policy will not go unnoticed, although one should not expect a fundamental turn from Brussels now,” says Maxim Medvedkov, head of the trade policy department at the Higher School of Economics.

Tatyana Edovina