Description
In recent years, the European Union (EU) has introduced a series of new unilateral trade instruments, such as the Carbon Border Adjustment Mechanism (CBAM) and the EU Deforestation Regulation (EUDR). These unilateral measures are intended to complement environmental standards and conditionality incorporated in the EU bilateral free trade agreements (FTAs), fostering stronger enforcement and greater policy coherence in enhancing environmental sustainability in trade. However, the rise of geoeconomics in the EU’s trade policy introduces a critical dynamic in assessing the interplay between these two approaches, particularly in the context of more balanced EU-Global South relations. Using the EU-Indonesia FTA negotiation as a case study, this article explores whether geoeconomic objectives in EU-Global South trade relations reinforce or weaken the complementarity between the EU’s unilateral trade tools and the environmental conditionality within its bilateral trade agreements with the Global South. It draws on semi-structured interviews with executives, parliamentarians, and civil society organizations in both the EU and Indonesia, as well as documents. This article argues that the EU’s geoeconomic turn will likely undermine the complementarity between these two approaches during both the negotiation and implementation stages of the FTAs with the South. First, as EU’s trading partners in the South are more aware of their geoeconomic positions and increasingly adopt a stronger stance, they leverage bilateral FTAs to negotiate for greater policy flexibility and exemptions from EU unilateral trade regulations, as seen with Indonesia. Second, the introduction of unilateral regulations fragments and complicates the negotiation and implementation of environmental standards within bilateral trade agreements. Discourses around unfairness and the perception of unilateral trade barriers diminish the Global South’s accountability in environmental sustainability and reduce pre-ratification legitimacy pressure regarding environmental commitments in the EU FTAs.
