   
  
WT/GC/W/912  
 
4 December 2023  
(23-8204) Page: 1/4 
General Council  Original: English  
 
 
EUROPEAN UNION REGULATION ON SUPPLY CHAINS FREE  
FROM DEFORESTATION AND FOREST DEGRADATION  
COMMUNICATION FROM ARGENTINA, COLOMBIA, DOMINICAN REPUBLIC, GUATEMALA, 
HONDURAS, PANAMA, PARAGUAY, AND PERU   
The following communication, dated 1 December 2023, is being circulated at the request of the 
delegations of Argentina, Colombia, Dominican Republ ic, Guatemala, Honduras, Panama, Paraguay 
and Peru.  
 
_______________  
 
1  INTRODUCTION  
1.1.  In light of the recent Regulation (EU) 2023/1115 "on the making available on the Union market 
and the export from the Union of certain commodities and products associated w ith deforestation 
and forest degradation and repealing Regulation (EU) No 995/2010 " (EUDR), we wish to express our 
concerns regarding its broad implications.  
1.2.  The EUDR has potential broad effects on the multilateral trading system. On top of having the 
potential to create trade barriers to a significant array of products from many WTO Members, 
specially developing members and LDCs, it is also a clear example of a trend of unilateral measures 
taken under the aegis of environmental goals, which regulate produ ction in third countries, select a 
one-size-fits-all type of solution, display insufficient meaningful dialogue, and create tensions 
between the trade and environmental multilateral regimes.  
1.3.  Furthermore, taking into account the complexity of the implementa tion and application of the 
regulation, not only for developing members and LDCs, but for the EU operators and authorities, the 
EUDR could negatively affect hundreds of thousands of small and medium size producers and 
exporters leading to increased poverty  and deforestation, contrary to its intended objectives.    
1.4.  The proliferation of unilateral environment -related trade measures raises issues that go beyond 
ordinary Specific Trade Concerns. Members cannot and should not face global challenges through 
fragm ented solutions that seem to run counter to WTO rules. It is only through mutual 
supportiveness, strong concertation, and harmonized application of international instruments under 
multilateral Trade and Environmental Agreements, that sustainable developmen t can be achieved. 
We respectfully call upon the European Union to take this discussion and its broader effects into 
careful consideration and engage constructively with its trading partners to achieve mutually agreed 
solutions that can meet the environmen tal aspirations without disproportionally affecting trade or 
hindering development.  
2  HOW DOES THE EU DEFORESTATION REGULATION WORK, IN A NUTSHELL  
2.1.  The EUDR specifically claims to aim at "reducing deforestation globally, decreasing greenhouse 
gas emissions, and safeguarding biodiversity". It officially entered into force on 29 June 2023, but 
its application will start on 30 December  2024.  
2.2.  The EUDR tar gets seven primary commodities —cattle, cocoa, coffee, oil palm, rubber, soya, 
and wood —but it also covers an extensive range of products  derived from these commodities, 
like: chocolate, cocoa powder, palm oil derivatives, meat, leather and leather products , rubber tyres 
(new or retreaded), rubber gloves, wood in any form (logs, pellets, agglomerations, plywood, etc), WT/GC/W/912  
 
- 2 - 
 
  wooden furniture and ornaments (i.e. wooden frames for paintings, photographs, or mirrors), 
packing cases and pallets used for trade; pulp and  paper, books, notebooks and newspapers; etc. 
Indeed, many products that contain, have been fed with, or have been made using the relevant 
commodities will be subject to the requirements of the EUDR. The Regulation covers the entire 
supply chain  associated  with these relevant commodities and products.  
2.3.  The EUDR targets mainly third countries production due to the targeted commodities and the 
lack of consideration of historical deforestation in the EU.  
2.4.  The EUDR creates two interconnected frameworks: the ben chmarking mechanism and the due 
diligence process.  
2.5.  The benchmarking mechanism  classifies countries according to their deforestation risk levels 
(low, standard or high), which in turn dictates the stringency of the due diligence that EU operators 
must unde rtake. Every Member of the WTO will be assessed  and ranked in accordance with the EU's 
chosen criteria. These criteria include not only trends and rates related to deforestation, but also 
arbitrary parameters as the adequacy of a large set of national laws  (human rights regimes, 
indigenous peoples' regimes, etc).1 All Members of the WTO will be subject to such unilateral 
assessment by the EU.  
2.6.  The benchmarking mechanism  could prompt importers to reevaluate their sourcing 
strategies, opting to prioritize sup pliers from countries deemed low risk. This shift might arise from 
importers seeking to mitigate the complexities and stringent requirements associated with due 
diligence procedures for high or standard risk countries at the expense of suppliers from high risk 
countries even those that comply with the EUDR.  
2.7.  After the benchmarking of countries, every relevant commodity and product will be subject to 
a due diligence  requirement to enter the EU market. This due diligence requirement will affect all 
traders alo ng the supply chain, even those located in low risk countries  (i.e. there is no "free zone").  
2.8.  Indeed, to comply with the EUDR, European operators must issue a due diligence statement 
confirming there is no or only negligible risk of non -compliance with th e regulation's requirements. 
Operators must include specific details about themselves, the products they handle, their suppliers 
and their customers. They must also comply with a vast list of information requirements, which 
include the geolocation of all p lots of land where the raw materials were produced and the date or 
period of production. In addition, operators must show that the products have been produced in 
accordance with the relevant legislation of the country of production relating to labour  and human 
rights , free, prior and informed consent of indigenous peoples , tax and anti-corruption  rules, and 
trade and customs  regulations.  
2.9.  These are the general due diligence requirements. For countries deemed to be at "high" or 
"standard" risk of deforestati on, these requirements are compounded  by the need to include a risk 
 
1 Country Risk Benchmarking – some examples:  
Mandatory Criteria  
1.Rate of deforestation and forest degradation  
2.Rate of expansion of agricultural land for commodities  
3.Production trends of commodities/products  
Additional Criteria ( "may" also be taken into  account)  
1. Information by third parties NGOs  and third parties, including indigenous peoples, local communities and civil society 
organisations, with regard to the effective covering of emissions and removals from agriculture, forestry and land use 
in the n ationally determined contribution to the UNFCCC;  
2. Inclusion of emissions/removals from AFOLU in Paris NDC  
3. Agreements with the EU on deforestation  
4. National laws to tackle and severely punish deforestation  
5. Transparent deforestation data  
6. Protection of human ri ghts, indigenous peoples,  local communities,  customary tenure rights holders  
7. Sanctions against country by UN Security Council or EU Council on commodities/products  
 
 WT/GC/W/912  
 
- 3 - 
 
  assessment  and a risk mitigation plan . Moreover, annual checks of the merchandise change from 
1% for low -risk countries, to 3% for standard countries, to an extra -ordinary 9% for high-risk ones.  
2.10.  The whole mechanism will entail a trove of information and data  from a significant number 
of traders and suppliers, along the entire supply chain, all over the world.  
2.11.  Besides its broad implications, it is particularly worrying that many as pects of the European 
regulation remain unclear  and require supplementary regulations or additional clarification, which 
means that the actual time frame all operators will have to implement the adjustments needed will 
be far shorter than the 18 -month peri od set out for implementation.  
2.12.  It also imposes a unilateral review and assessment of all WTO Members' policies, which may 
restrict imports and exports of very commonly used products and commodities from every country, 
even from the best placed on the bench marking exercise. The practical implications of the EUDR, 
once implemented, are still uncertain.  
2.13.  The EUDR's strict rules and control measures could result in disadvantageous and unfair 
treatment of imported goods compared to EU domestic products and in un equal treatment among 
like products from different Members. This could lead to unfair discrimination in trade practices, 
raising concerns about their alignment with broader trade fairness and equality principles. Moreover, 
exporting countries that have pos itive measures to avoid deforestation and industries that do not 
cause deforestation, might become burdened by a "one -size fits all" approach that overlooks 
substantial differences across regions, regulations and industries. Finally, the substantial costs and 
administrative demands to ensure compliance with the EU Regulation could intensify the problem, 
creating an additional barrier to trade without having the expected outcomes, specially taking into 
account the domestic support producers in the EU receive . 
2.14.  For other countries, the regulation will not only impact trade but also have a detrimental effect 
on security policies, such as the efforts to combat illicit drug production.  
2.15.  Beyond trade tensions, the EUDR also risks undermining the weakest players  in any given 
value chain, due to its very high bar or requirements and conditions. It increases litigiosity , while 
pushing for reactions and promoting the search for remedies . It fails to honestly recognize how 
things happened and puts the blame inappropriate ly. The whole concept has a strong bias against 
growth that affects especially developing countries, where the expansion of food production is key 
for food security. It is difficult to see how this over-reach , and its broad consequences on trust and 
coordi nation , will be successful in the long term in its aim of "reducing deforestation globally, 
decreasing greenhouse gas emissions, and safeguarding biodiversity".  
3  CONCLUSION  
3.1.  We strongly recognize and promote global efforts to curb deforestation and foster a sustainable 
management of forest resources. Our commitment to the tenets of sustainable development is 
unwavering, and we advocate for a united approach to ensure the attainment of our collective 
environmental goals, without placing undue burdens on the mo st vulnerable segments of the 
production chain, particularly within developing economies.  
3.2.  A concerted approach to sustainability avoids fragmentation and retaliation, while building on 
much needed trust and cooperation at the multilateral level.  
3.3.  We urge t he Commission to review  the recent trend of some of its measures based on the 
environment.  
As a start, we ask the EU:  
• to craft implementing acts regulations and guidelines that provide certainty to operators and 
producers from third countries, clearly sp ecifying the requirements, stages and timeframes of 
each procedure.  
• to incorporate differentiated compliance and due diligence standards tailored for different traders 
from developing countries. This approach should aim to level the playing field, reflecti ng the WT/GC/W/912  
 
- 4 - 
 
  EU's firm commitment to Sustainable Development Goals and to fostering a trade environment 
that's not only environmentally conscious but also equitable and inclusive,.  
• to provide assistance measurable to the one received by their own producers and o perators to 
avoid discrimination,  
• to provide appropriate cooperation to retribute conservation efforts to countries with 
comparative high rates of conservation,  
• to provide for more stringent rules and cut off dates to its own production to also comply with  
the restoration commitments and not only extraterritorially make others comply with their 
conservation commitments.  
3.4.  While promoting environmental sustainability is a common goal that unites us all, it is 
imperative that the EU takes into account and meaningfully engages over a debate on the broader 
implications of a trend of unilateral regulations allegedly taken for the sake of sustainability, and 
consequently reviews its regulations.  
 
__________  