Blog: The EU’s Trade Policy Review: steering change in the right direction

A historic crisis is confronting the international trade system at a time when its stability is needed most. As the world grapples with economic hardships generated by the pandemic, international institutions face legitimacy challenges and trade agreements have their merits questioned.

The EU’s trade policy review provides an opportunity to build a new consensus around trade, one that will enable Europe to leverage its market power to speed up economic recovery and diffuse EU values around the world.

ESRA represents the voice of European cane refiners. As an industry wholly reliant on trade to access raw materials, the workers in our sector are among the millions of Europeans whose livelihoods depend on global supply chains.

The growing scepticism towards Free Trade Agreements (FTAs) justifies a realignment of trade policy with societal expectations. Trade deals can and should reinforce EU values. In the cane sector, agreements with partners like Mercosur and Australia can contribute to the resilience of supply chains for EU businesses and consumers, while promoting high sustainability standards among producers.

By diversifying supply, FTAs safeguard production chains against disruptions, like the Covid-19 crisis, or extreme weather events, which have become increasingly frequent. In the sugar market, as with most crops, increasing domestic production is not possible in the short term. As such, access to foreign markets is essential to ensure food security and the functioning of EU production chains that rely on such inputs.

On sustainability, FTAs can also act in support of high standards. Over the past two decades, the cane sugar industries in Brazil and Australia have evolved to display deep concerns about environmental footprint. To a large extent, this was made possible by an increasing demand for sustainably-sourced and processed sugar.

Access to main export markets allows European processors, retailers, and traders to select from a wider set of suppliers; widening the opportunities to source raw materials with higher sustainability standards.

In the case of Australia, for instance, the current modes of access to raw sugar mean that European refiners are unable to import Australian raw sugar that is certified by the gold standard in sugar sustainability – Bonsucro. Not only does this hinder our capacity to lead the market in sustainability terms, but it also takes away the power of the European market to drive sustainability beyond its borders.

Over the years, the EU has successfully negotiated a robust network of FTAs that grant EU companies reliable access to competitively priced, high-quality agri input. ESRA members commend the impact of EU trade policy so far and encourage further progress; particularly in the current negotiations with Australia and the ratification of the deal with Mercosur.

In this review, ESRA members call for an open, fair and ambitious trade policy to empower consumers, enhance the resilience of supply and accelerate economic recovery. We count on the Commission and Member States to nurture the EU’s engagement in working with trade partners towards common goals.