Government opened public consultation on most effective ways to limit or remove commodities linked to deforestation from supply chains
10/21/2022
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Soybean plantation in Pará: crop may be affected in case of restriction in the U.S. — Foto: Claudio Belli/Valor
The United States government has taken a new step to define trade restrictions aimed at prohibiting commodities coming from deforested areas as of December 2020, following the example of what the European Union is preparing. The measure may impact 10% of Brazilian exports to the American market.
The State Department, in conjunction with Customs and Border Protection, the Office of the United States Trade Representative (USTR), and other government agencies, opened this week public consultation to receive input on the most effective ways to limit or remove commodities linked to deforestation from supply chains, and to encourage the procurement of sustainably produced agricultural commodities.
One question submitted by the U.S. government in the public consultation is whether all “soft commodities” should be covered by trade restrictions, or just some, citing beef, soybeans, coffee, palm oil, cocoa, pulp, and rubber, which would account for three-fifths of deforestation globally.
The value of trade referring to these products in the public consultation exceeds $3 billion in Brazilian exports to the U.S. (data for 2021), equivalent to about 10% of Brazilian exports to the U.S. market, according to a preliminary impact analysis made by lawyer Rodrigo Pupo, with MPA Trade Law.
Currently there is already a bill going through the U.S. Senate to establish due diligence on legal and illegal deforestation in supply chains for certain commodities.
“The difference with this legislative proposal is that it does not include coffee, which is now in the public consultation, but includes coffee products, which increases uncertainty about the measure and certainly the trade impact,” said Mr. Pupo.
Washington will receive opinions from different interested parts by December 2. Then government agencies will prepare a report for President Joe Biden outlining options for trade restrictions. The USTR must identify foreign countries without adequate and effective protection against deforestation caused by the production of commodities that are likely to enter the United States, and point out the potential risk of each country identified.
There are several other bills introduced in Congress involving environmental policies globally that may affect bilateral relations. One of them directs the Secretary of State to engage with Brazil on environmental enforcement, sustainable development, and emission reduction efforts.
In a recent report on national security strategy, the Biden administration included the goal of mobilizing funding and other forms of support to promote conservation of the Amazon rainforest.
The European Union is well ahead in its plan to ban imports of agricultural commodities linked to deforestation. The goal in Brussels is for the final text of the future regulation to be agreed upon by the European Commission (the EU’s executive arm), the European Council (of European leaders), and the European Parliament before the COP27, which will take place in November in Egypt.
The European regulation will ban the use of several “high forest risk commodities.” The European Parliament’s specific proposal corresponds to 80% of Brazilian agribusiness exports or 40% of total exports to the EU, adding up to $14.5 billion in sales to the bloc in 2021.
*By Assis Moreira — Geneva
Source: Valor International