Prospects and challenges for policy convergence between the EU and China to address imported deforestation

Abstract

The EU and China are major importers of ‘forest-risk’ commodities and thus play a pivotal role in shaping the sustainability of those commodities supply chains. The EU recently introduced a regulation mandating due diligence by companies to ensure commodities are not sourced from recently deforested land. However, even if eventually successful in eliminating ‘imported’ deforestation to Europe, the regulation risks creating leakage to China and other markets. This possibility has prompted stakeholders to call for cooperation and policy alignment between the EU and China to address imported deforestation. This study applies the ‘Brussels Effect’ theory to identify what factors hinder or facilitate such policy convergence. We conducted 20 semi-structured interviews with key informants engaged in EU-China dialogues on the topic. Our findings suggest that, despite political signals from high-level Chinese leadership, it is unlikely that China will adopt trade measures requiring ‘deforestation free’ commodities in the foreseeable future. China's foreign policy stance of non-interference and concerns about its food security are key obstacles. While this limits the prospects of policy convergence in the short to medium term, a mix of market-based forces and cooperative mechanisms enabled by the EU regulation may lower the barriers and costs for companies to expand compliance with zero deforestation standards to other markets such as China, making some level of ‘de facto’ convergence plausible. We also note the importance of moving beyond a unilateral ‘Brussels Effect’ framing to consider the role of diplomacy, cooperation, and geopolitical conditions that promote, or run counter to, policy convergence.