EU Trade Head Says Plastic Packaging Waste Rules Risk Backfiring

(Bloomberg) -- The European Union’s trade chief warned that late changes to new rules on plastic packaging could penalize poorer countries that export to the bloc and increase the risk of legal challenges and retaliation.

EU negotiators finalized a deal last week to slash packaging waste in everyday products from bananas to computers. The agreement, due to be signed off on Friday, included an amendment pushed by France forcing countries outside the EU to mirror its standards in producing plastic packaging used to protect goods.

“Make no mistake, these last-minute changes to the commission’s packaging proposal will have wide-ranging ramifications on trade into the EU and on our partners around the globe,” Valdis Dombrovskis, European Commission vice president responsible for trade, said in a statement emailed to Bloomberg. “These changes will call into question our reputation as a reliable trade partner and risk undermining our efforts to support development in less developed countries.”

He said the deal would harm the poorest countries — including in Africa — and the smallest companies the most, adding that it could also expose the EU to potential trade retaliation and World Trade Organization disputes, while boosting costs for consumers. Products not complying with the bloc’s rules could be blocked at customs.

The EU has faced growing accusations of green protectionism as it seeks to transition its own economy to net zero by 2050. The bloc’s carbon border adjustment mechanism — an instrument designed to prevent industry leaving the EU because of the higher costs incurred for generating pollution — has been lambasted by countries such as India and China, and has threatened to undermine global efforts to cut emissions.

A separate rule to curb deforestation abroad through imports of products like beef and coffee has also been roundly criticized by producer countries, forcing the EU to delay benchmarking countries as “high risk.” The bloc’s environment commissioner, Virginijus Sinkevicius, is about to embark on a tour of South America to help ease those concerns.

Despite Dombrovskis’s objections, the rules governing packaging are expected to be approved by EU country representatives at a meeting in Brussels on Friday. Both the EU parliament and council’s legal services say the agreement is WTO-compatible, according to people familiar with the matter. 

Negotiators say the rules governing imports are less strict than what the commission, the bloc’s executive branch, originally proposed.

“Such sweeping amendments should be weighed up with care and a proper impact assessment,” Dombrovskis added. “We want to promote the use of recycled plastic packaging, but we must bring our trade partners on board rather than potentially shut them out of the EU markets.”

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