Brazil considers appealing to the WTO against European law on deforestation

The Chamber of Deputies discussed this Tuesday (11) the recent European law on deforestation and its possible impact on production chains and Brazilian exports. During a hearing on the subject, government representatives signaled that Brazil could appeal to the World Trade Organization (WTO) against the European Union Regulation for Products Free from Deforestation (EUDR).

The new norm has already been approved by the European Parliament and should begin to be implemented from December 2024. The Secretary of Foreign Trade of the Ministry of Development, Tatiana Prazeres, stressed that the initiative is unilateral, has an extraterritorial effect and would impact 34% of the products that Brazil exported to the European Union in 2022, informed Agência Câmara.

“It is a conversation that we have with the Itamaraty: the possibility of Brazil questioning the legality of these measures in the appropriate forums, questioning the new European requirements in the light of international trade rules”, said the secretary at the joint hearing of the Agriculture commissions; and Industry and Commerce of the Chamber.

The director of the Itamaraty Trade Policy Department, ambassador Fernando Pimentel, also called the classification of countries by risk of deforestation, provided for in European law, “arbitrary”. Government representatives also pointed out the negative effects of this law on the negotiations surrounding the trade agreement between Mercosur and the European Union.

The regulation focuses on wood, soy, beef, cocoa, coffee, palm oil, rubber and derivatives. To enter Europe from the end of next year, these commodities will have to undergo checks that rule out the risk of having been produced in areas of legal or illegal deforestation.

Among the foreseen punishments are suspension of imports, seizure or destruction of products and a fine of up to 4% of the operator’s annual revenue. European law considers forest to be any area with 10% coverage of trees up to 5 meters tall.

The European Union ambassador in Brazil, the Spaniard Ignacio Ybáñez, guaranteed that the law is focused on combating forest degradation and that Brazil can transform it into a “competitive advantage”. Ybáñes also said that the Europeans are not afraid of possible recourse to the WTO. “It is not trade legislation. It is purely environmental legislation. If any country takes this issue to the World Trade Organization, we are very confident from that point of view. It is already legislation in Europe, so there is no element for me to come here and say: let’s negotiate”, he said.

The ambassador pointed out that there is “a path for dialogue in the face of this great transformation” and that the government presented a commitment “against deforestation and with a clear commitment in favor of combating climate change”.

He added that the Action Plan for the Prevention and Control of Deforestation in the Legal Amazon (PPCDAM) and the product traceability systems that are starting to be implemented in some states could be assets for Brazil. As for the Mercosur-EU trade agreement, the ambassador said it was “an opportunity for various agricultural and industrial sectors in Brazil in the international market.”

The audience also included representatives of the national confederations of Industry (CNI) and Agriculture (CNA), who emphasized the risks of harm to Brazil in view of the new European law.