Why the EU Green Deal is currently a barrier to trade and global partnerships

It is often said that the road to hell is paved with good intentions. This is a something that the EU should bear in mind as its fixation with the details of sustainability policies make it blind to the broader negative impact of its current approach, with Eastern Europe and Central Asia heavily impacted.

The overarching objective of the European Union’s Green Deal is to accelerate the push towards Net Zero, reduce the impact of climate change and prevent the destruction of the environment.

In the name of these worthy goals, leaders are striving to make Europe the first climate-neutral continent and position the EU as a global leader in fulfilling this environmental mission. Sadly, the Green Deal is currently failing in this goal since the EU has adopted the wrong strategy to achieve its objective.

The current EU approach is both unilateral and antagonistic, with many countries in Eastern Europe and Central Asia disproportionately negatively impacted by new policies and regulations stemming from the Green Deal.

The list of commodities covered by the EU Deforestation Regulation (EUDR) and carbon intensive products impacted by the Carbon Border Adjustment Mechanism (CBAM) are great cases in point.

Non-EU countries are forced to swallow a whole new set of rules that have been formulated in isolation, behind their backs, with no possibility for input. This is regardless of whether they have a positive or negative contribution to global environmental objectives. Delivering this type of fait accompli builds only resentment in the global community, rather than incentivises and inspires action.

The current anger and outrage being expressed by third countries towards the EU bears testament to this. As a result, the EU is failing in its twin goals of improving the environment globally, and positioning itself as a positive global leader.

The EU would instead be better served building a global consensus by establishing a dialogue and engaging countries in the regulatory and standard-setting process. Going further, this should cover the recognition of global norms and underline that countries have differentiated levels of responsibility in reaching the overall objective.

The trade dimension: Vital but overlooked

The EU should leave its current isolationist path and engage with friendly democracies across Eastern Europe and Central Asia to strengthen trade and promote open markets.

In a world increasingly marked by polarisation and fragmentation, it is more important than ever before that the EU sets a good example and acts as an open and global trading partner, rather than a “Fortress Europe”.

This is fundamental to the ethos of the EU but also represents enlightened self-interest in that Eastern European and Central Asian countries represent markets for EU products and services with significant, skilled populations which also enjoy high growth rates.

This runs in direct contrast to the low growth and ageing populations that make up the majority of the EU.

Rethinking the EU approach

The EU should follow a path to inclusion and collaboration, rather than inflexibility and isolationism. By pivoting to a new approach, the EU should extend a welcoming hand to Eastern European and Central Asian countries and realise that they have an integral constructive role to play in the green transition.

They are part of the solution, rather than part of the problem, and if the EU recognises this and changes their approach, there are a number of willing partners across the Eastern European and Central Asian region, for example, who are prepared to engage and work towards the same goals in a spirit of partnership rather than enmity.

Given the broader political movements that are underway at the global level it is vital that the EU has its eyes on the road.

The EU needs to meet sustainability goals while increasing trade with Eastern Europe and Central Asia. To do so effectively, though, it needs to drop its current approach which is both one-sided and hostile.

With regards to the implementation of existing and ongoing regulation, more active engagement and dialogue is needed with partner countries. Increasing sustainability and trade should not be mutually exclusive goals and the EU’s Green Deal need not be a byword for protectionism and intransigence.

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