EU Free Trade Agreements & Climate Change

What's the problem with Free Trade Agreements?

The EU has signed several Free Trade Agreements (FTAs) with forested countries in recent years and is negotiating more. These deals critically undermine the EU’s commitment to fight climate change, end deforestation and respect human rights. They intensify pressure on natural resources: exacerbating illegal logging, and deforestation and land grabs driven by agricultural expansion. Particularly shocking examples include the deals that the EU is negotiating with Indonesia and with the Mercosur bloc (Brazil, Argentina, Uruguay and Paraguay).

Fern's work on this issue

What do Fern and our partners want?

A more inclusive, transparent approach to negotiating EU trade agreements, which should be aligned with EU commitments to protect forests and respect human rights.

What are we doing?

Working with NGO coalitions to ensure that EU trade deals are negotiated and implemented inclusively and transparently and include effective commitments to halt deforestation and promote climate, forest and human rights friendly bilateral trade.

Frequently asked questions

Does trade cause deforestation?

Yes, there's a vast body of evidence confirming direct and indirect links between trade and deforestation, as well as other forms of environmental destruction

A 2010 World Trade Organisation report found that trade liberalisation increases deforestation, which is responsible for roughly 12 per cent of global CO2 emissions. Another recent study showed that between 2000 and 2011 the production of beef, soy, palm oil and wood products in just seven countries was responsible for 3.8 million hectares of forest loss annually, leading to 1.6 billion tons of CO2 emissions per year. Also mentionable is this Harvard study which revealed that trade and growth can exacerbate environmental degradation (particularly CO2 emissions), or this 2016 report showing that opening specific areas of the Amazon to international trade increased deforestation.

How can the European Union ensure that its trade doesn't cause more deforestation?

There are specific measures the EU can take to help prevent deforestation.

The EU can ensure that the free trade agreements emerge from a transparent, inclusive process, drawing on the views of civil society groups and relevant experts.

Lessons can also be learned from the EU’s FLEGT (Forest Law Enforcement, Governance and Trade) action plan, whose Voluntary Partnership Agreements outline how to ensure only legal timber is imported from timber-producing countries. VPAs represent a unique example of trade being used as a tool to protect the environment and improve social safeguards.

Questions relating to the effectiveness of the dispute resolution process must also be addressed, and mechanisms such as inspections and evaluations should be included to ensure compliance.

Finally, strengthening the negotiation process and the content of trade agreements is important but insufficient. The EU also needs to consider a mandatory human rights due-diligence regulation to purge supply chains of deforestation and human rights violations.

Read more in Fern's report on free trade agreements

What is a Free Trade Agreement?

A Free trade Agreement (FTA) is a bilateral or multilateral agreement between two or more countries to reduce barriers to imports and exports among them. The countries agree on certain obligations that affect trade in goods and services, and protections for investors and intellectual property rights, among other topics.

What needs to happen to achieve our goals?

The EU must put protecting human rights and the environment at the heart of its trade policy.

Mercosur: the EU needs to stop racing towards ratification of this toxic deal, which will exacerbate deforestation, land-grabbing and human rights abuses in Brazil unless it is fundamentally rethought.
Indonesia: the EU needs to listen to Indonesian civil society’s proposals and only give preferential market access to deforestation and human rights violation free commodities.
Vietnam: the EU needs to support independent civil society to play a role in Vietnam trade policy and use the FTA monitoring mechanisms to help the EU and Vietnam to deliver on their commitments to address climate change and tackle illegal logging and the associated trade.

What has been achieved so far

June 2021

The EU cancels planned talks to discuss sustainable development in the framework of the EU-Vietnam FTA due to Vietnam government’s reluctance to set up its own civil society advisory group.

October 2020

The Commission vice-president in charge of Trade states: “We hear the concerns which are being voiced and we are actually sharing those concerns and willing to address them… because the concerns … are linked with the deforestation of the Amazon, and also on adherence of Mercosur countries to the Paris Agreement.”

September 2020

Following similar declarations by Austria, Belgium, France, Luxembourg and the Netherlands, German Chancellor Angela Merkel declared she would not support ratification of the EU Mercosur FTA in its current state.

July 2020

EU-Vietnam FTA enters into force.

June 2020

The Commission states that the trade agreement between the EU and Indonesia aims to promote more sustainable palm oil and support the Indonesian government to increase output while fighting harmful practices. This could lead to the extension and strengthening of the moratorium on new oil palm plantations on forests and peatlands

August 2019

Twenty-six NGOs including Fern send an open letter to European leaders urging them to end European complicity in the fires raging in the Amazon and calling for Mercosur FTA to be suspended.

June 2019

The EU and the Mercosur bloc of nations agree an FTA after 20 years of negotiations.

June 2019

340+ civil society organisations call on the EU to use its influence to prevent the deteriorating environmental and human rights situation in Brazil, including halting the EU-Mercosur FTA.

February 2019

After numerous reports of rural people being thrown off their land by sugar concession-holders, the EU begins a process that could lead to the suspension of Cambodia’s preferential access to the EU market.