This blogpost published on IEEP's website evaluates the EU’s current approach to greening its trade policy and considers the use of Trade-and-Environment Agreements (TEAs) as a way forward for more sustainable trade.
Be it with carbon border adjustment mechanisms (CBAM) or within free trade agreements like EU-Mercosur, the EU has made clear that it intends to leverage access to its market to spark sustainable behavioural change among its trade partners. In a carrot-and-stick approach, “good” behaviour is rewarded by greater market access, while this is withdrawn in case of environmental renegades. Seductive on paper, this approach encounters several limitations however, chief of these being the risk to slide into green mercantilism. Another approach is possible, whereby trade and environmental provisions would be designed altogether within a trade-and-environment agreement (TEA), supporting countries including the EU’s in their shift towards a more sustainable path.