The European Union\u2019s flagship policy is in crisis. With over 40% of all wood furniture and cardboard exports at risk, China is the latest country to oppose the EU Deforestation Regulation (EUDR), refusing to share geolocation data due to \u201csecurity concerns.\u201d According to GD Holz , the German timber trade association, the world\u2019s two largest forest markets (China and the US) remain at an impasse over the rules.<\/p>\n
Context and international reactions<\/strong><\/p>\n The move comes just days after the Biden administration stepped up pressure on the EU to delay implementing its \u201cimpossible standards,\u201d after 27 senators warned the new rules amounted to a \u201cnon-tariff trade barrier\u201d and could end the $3.5 billion forestry trade between Europe and America.<\/p>\n \"The EU has made its position clear in discussions with the Chinese government and suppliers,\" said GD Holz, adding that \"it is undeniable that imports without geographical coordinates will not be possible and there will be no exceptions for countries like China.\"<\/p>\n No statement has been made regarding attempts to resolve the issue, underlining the EU's determination to maintain its policies.<\/p>\n Potential impact of a Chinese withdrawal<\/strong><\/p>\n A Chinese withdrawal from the EUDR rules, set to come into force in December, could have huge implications for global supply chains of wood, paper and pulp products. Through the Belt and Road Initiative, China controls more than 30% of the global forest products supply chain, cementing its crucial role in the industry.<\/p>\n Under China's Belt and Road project, more than 30% of the global supply chain of forest products will be directly impacted by Chinese industry \u2013 in the planting, production, manufacturing and distribution of products worldwide. (Photo Credit: Brookings Institute)<\/p>\n According to Eurostat, the European Union's statistics office, China was responsible for more than 47% of wooden furniture imported into the region last year, far outpacing Turkey (10.2%), Ukraine (10.1%) and Vietnam (5.1%).<\/p>\n \"It is important to note that the ties between China and Vietnam are very close,\" said an official involved in the process, as evidenced by the increase in imports of Vietnamese plywood to U.S. ports after the introduction of U.S. trade tariffs on Chinese plywood.<\/p>\n In addition to furniture, China is virtually the European Union's largest manufacturer of cardboard boxes, accounting for 41% of all paper boxes and bags imported into the EU last year, ahead of Turkey (20.3%), Serbia (7.7%) and Switzerland (7.4%).<\/p>\n Global concerns and criticism<\/strong><\/p>\n China's concerns come after twenty (out of 27) European agriculture ministers called for delaying the rules due to concerns about global supply chains, echoing warnings from government officials in Australia, New Zealand, Brazil, Indonesia and Malaysia.<\/p>\n Problem with EUDR regulations<\/strong><\/p>\n Indeed, the EUDR is one of the few issues that has unified the United States and China, the two largest producers of forest products, who remain deeply at odds over the governance of people and economies.<\/p>\n In a letter co-signed by Trump-supporting Republicans, Biden-supporting Democrats, and southern independents, the United States (like China) raised concerns about geolocation mapping: \u201cThe EUDR imposes a geolocation traceability requirement that requires each shipment of wood products to be traced back to the individual parcel of land,\u201d the senators warned in a letter to Ms. Tai.<\/p>\n Under Chinese law, geographic information is restricted to entities with special permission from the Administrative Department for Surveying and Mapping under the State Council \u2013 and given the current geopolitical climate, it seems unthinkable that China would provide such data to the RDUE authorities.<\/p>\n How the EUDR works<\/strong><\/p>\n The regulation will assign regions low, standard or high risk levels associated with deforestation and forest degradation. This classification will guide the obligations of operators and Member State authorities to carry out inspections and controls. This will streamline monitoring for high-risk regions and simplify due diligence processes for low-risk regions.<\/p>\n The responsible authorities will have to inspect 9% of operators and traders handling products from high-risk regions, 3% from standard-risk regions and 1% from low-risk regions. This inspection aims to confirm compliance with the obligations stipulated by the regulations.<\/p>\n Finally, the EU plans to step up its cooperation with partner countries, focusing mainly on high-risk regions.<\/p>\n The standoff between China and the European Union over the EUDR could have profound implications for global trade in forest products. The EU\u2019s determination to implement these rules despite international opposition underlines the complexity of environmental and trade challenges in an increasingly interconnected world.<\/p>","protected":false},"excerpt":{"rendered":" The European Union\u2019s flagship policy is in crisis. With over 40% of all wood furniture and cardboard exports at risk, China is the latest country to oppose the EU Deforestation Regulation (EUDR), refusing to share geolocation data due to \u201csecurity … Continue reading