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Brussels Effect or Political Contestations? Assessing the Policy and Behavioral Effectiveness of the EU Deforestation Regulation in the Historical Context of Trade Based Forest Sustainability Initiatives

Environmental Policy
European Union
Globalisation
Governance
Global
Trade
Metodi Sotirov
Albert-Ludwigs-Universität Freiburg
Metodi Sotirov
Albert-Ludwigs-Universität Freiburg
Benjamin William Cashore
National University of Singapore

Abstract

The purpose of this paper is to assess the effectiveness of the European Union’s (EU) attempts to address global deforestation and forest degradation through its EU Regulation on Deforestation-free Products (EUDR) that expands from previous timber legality regulation efforts such as the EU Forest Law Enforcement, Governance and Trade Voluntary Partnership Agreements (FLEGT VPAs) and the EU Timber Regulation (EUTR). First, the EU’s role as a global regulator as well as its possibilities and limitations to influence changes in policies (outputs), behavioral practices (outcomes) and on the ground (impacts) in third countries and within EU borders are theorized and hypotheses are derived. This theoretical contribution is informed by a synthesis of relevant conceptual perspectives from institutionalism, political economy, sociology, social psychology, and transnational supply chain regulation literatures. Second, the paper empirically assesses the ex-post policy, market and on-the-ground impacts of the EUTR/FLEGT VPAs as well as the ex-ante (perceived) impacts of the EUDR given the recent efforts to postpone or derail the EUDR’s implementation. The paper identifies the positive (“Brussels effect”) and negative (“contested”) perceptions and experiences within EU countries and third countries (Indonesia and Brazil) prior to and after the European Green Deal. The results show that despite some positive outcomes the EU countries have implemented the EU FLEGT VPA (with Indonesia) and the EUTR (with regards to Indonesia and Brazil) in an incoherent and insufficient way. This has been due to diverging political and economic priorities, differences in national standards and definitions, limited capacities, insufficient knowledge of and mistrust in imports from tropical countries even licensed under national timber legality and sustainability systems. With a broader support by EU public and private actors, the EU institutions adopted the EUDR in 2023 without learning from the previous policy ineffectiveness with the EU FLEGT VPA and EUTR. Indonesia, Brazil and many other tropical countries have expressed fierce opposition to the EUDR due to perceived EU’s discriminatory trade restrictions with associated legal and administrative burdens, economic costs, limited market access, and impacts on smallholders and domestic businesses. While EU actors consider EUDR demands for higher legality and sustainability standards to be legitimate and effective due to ongoing deforestation and forest degradation problems, stakeholders in Indonesia and Brazil perceive the EUDR as trade barrier that would negatively impact their key timber, oil palm, soy and beef exports. Still, our evidence also show that Indonesia and Brazil are partly adapting their regulations in a preparation for EUDR implementation. Our argument given this evidence from the last three decades is that while the expectation of the continuation of ineffective and/or non-durable policy outcomes is the most plausible “default” hypothesis - the future is not preordained. We argue that greater attention to simultaneously learning from past decisions, while anticipating new futures, holds the key to generating durable and effective policy designs.