Belgium (Brussels Morning Newspaper), The former heavyweight champion Mike Tyson once remarked that ‘everyone has a plan, until they get punched in the mouth’.
The architects of the EU’s Green Deal strategy surely know what he meant. The grand plan to use trade barriers, harsh regulation, and taxpayer handouts to fundamentally reshape the continent, has not survived contact with reality.
Put another way, the Green Deal is too expensive, too complex and too protectionist. Protests and public anger have already led to reversals on due diligence rules, nature restoration funding, combustion engine phaseouts, and more. The latest example is the Deforestation Regulation (EUDR). In the Council, 20 of the EU’s 27 Agriculture Ministers, led by Austria, have now openly called for a delay in the implementation of EUDR, which is supposed to be enforced from 1January.
They have done so not out of political expedience (though that may be a happy side-effect for some, with elections looming) but because it is now clear that the implementation deadline is absurdly, almost comically, short.
As with other Green Deal reverses, this outcome was eminently predictable – indeed, many of us did predict it.
The EUDR covers seven core commodities – timber, coffee, cocoa, rubber, palm oil, beef and soy. The countries that export those products to the EU – almost all of them in developing Asia, Latin America and sub Saharan Africa – have been warning for over a year now that the rules are too burdensome and a supply crunch is coming. Malaysia’s Prime Minister Anwar Ibrahim challenged the EU Commission’s approach, stating that “the EU (European Union) should … at least give recognition and recognise the efforts by Malaysia” instead of enforcing arbitrary and unrealistic enforcement.
Our trading partners have made these points loudly and repeatedly. 14 developing nations including Malaysia, Brazil, Indonesia, and Nigeria, wrote directly to the Commission complaining that EUDR is “inherently discriminatory and punitive” and “potentially inconsistent with WTO obligations”.
Farmers protested, and Ambassadors briefed MEPs and Commission staff about the concerns.
Further up the supply chain, European small businesses started to sound alarm towards the end of 2023, as did major food conglomerates. Those multinationals were late to recognise the danger, having initially played the usual lobbyist game of ‘welcoming EU regulation’ regardless of the content. Now, they understand the reality and how supply chains of core foodstuffs – chocolate, coffee, baked goods – could be affected.
Even the mainstream media – often criticised for its institutional support for EU environmentalism – has turned on this Regulation.
A feature in the New York Times examined the punishing impact that EUDR would have on rural communities in Malaysia, because it would force small farmers out of the supply chain and rip away their income.
Small farmers of coffee and cocoa in Africa, and of rubber in southeast Asia, will no doubt have the same worries. This is not abstract; we are talking about millions of families and small businesses in poorer countries, who will be deprived of income thanks to this EU regulation.
The Financial Times summarised that “Rich nations are not looking good in the palm oil dispute”, and assessed that “uncertain, onerous and ever-changing regulations act as an unfair trade barrier”.
It is long past time for the Commission to listen to this ever-widening circle of critics. European businesses, large and small, are clear that their operations will be negatively affected. Partner countries are clear their supply chains will be restricted and farmers put out of work.
The end result will be higher prices for European consumers, potentially re-lighting the fire of high inflation. Stubbornness in the face of these very real concerns does not project strength; it projects egocentrism. What is needed now is a dose of humility and maturity: the Commission should announce a delay to EUDR, and recommit to working with businesses, supply chains and partner countries to solve the problems with the Regulation.
If not, the EU election campaign will only magnify this anger. Commentators will wonder what is driving apathy; psephologists will ask why millions of European voters are abandoning the old establishment. Why? Listen to all the millions of voices whose concerns are ignored and brushed aside. There’s your answer.
