EU Trade Agreements as Drivers of Food System Sustainability? Zooming in on Sustainable Food Systems Chapters 

How can the EU effectively leverage trade agreements to green the agri-food sector – both in the EU and abroad? This blog post argues that while the Sustainable Food System chapters in the latest EU trade agreements are a first step in the right direction, the European Commission should improve and strengthen the commitments in the next mandate.

As a major importer and exporter of agri-food products, the EU is well-placed to drive the transition to sustainable food systems through its trade policy – an objective laid out in the European Commission’s Farm to Fork strategy. To do so, it has pursued a two-pronged approach combining unilateral and bilateral instruments.

At the unilateral level, the Commission has deployed several sustainability measures (“autonomous measures”), such as the EU Regulation on Deforestation-free products (EUDR), which condition access to the EU market to stricter environmental standards and requirements. At the same time, the Commission sought to better incorporate sustainability throughout EU Trade Agreements (TAs), notably by proposing the introduction of a brand-new chapter: the Sustainable Food Systems (SFS) chapter.

The SFS chapters are among the newest additions to the EU’s toolbox of green trade instruments and serve as a complement to the broader, cross-sectoral “Trade and Sustainable Development” (TSD) chapters which have been part of EU trade deals for over a decade. To date, SFS chapters have been included in the EU’s agreements with Chile and New Zealand and are currently being negotiated as part of the EU’s trade talks with Indonesia, India, and Thailand.

Across the different agreements, the SFS chapters are the same in terms of substance and include three core elements: 1) a definition of sustainable food systems; 2) a list of areas for cooperation between the parties; and 3) the establishment of a committee to oversee the chapter’s implementation.

The inclusion of a standalone chapter on sustainable food systems represents a paradigm shift and a welcome development in the EU’s approach to agri-food trade. However, there is still some margin for improvement to ensure these chapters are effective drivers of food system sustainability in EU and partner countries.

1. The EU should adopt a more inclusive definition of “Sustainable Food Systems”

Across the different trade agreements where an SFS chapter has been adopted or is currently being negotiated, food systems are generally defined as sustainable if they ensure “access to safe, nutritious and sufficient food” based on economic, social, environmental, and in some cases cultural, sustainability.[1] The EU-Chile Agreement as well as the proposed chapters for negotiations with Indonesia and India go one step further to specify the meaning of sustainability in the context of food systems.

Economic sustainability, for instance, is defined as profitability of a food system, a definition that has proven particularly contentious in the ongoing EU-India trade talks. Several experts have argued that such a definition does not reflect the reality of many small farmers in India, who rely on state subsidies and may not be able to operate profitably. Emphasising profitability as a defining factor may thereby neglect important food system actors, such as smallholder farmers in developing countries.

There seems, however, to have been progress in this regard. In the most recent EU trade agreement concluded with New Zealand in 2023, as well as in the text proposed for negotiations with Thailand early in 2024, the specification of profitability is no longer part of the definition. Instead, it is recognised that food systems are “diverse and context specific”.

Moving forward, the Commission should adopt this more inclusive definition, as it leaves room to accurately reflect the diverse socio-economic contexts of partner countries and the varied range of food system actors.

2. The EU should seek more concrete SFS commitments from trading partners

For now, SFS chapters in trade agreements do not create any legally binding obligations on the EU or partner countries, they simply list areas for cooperation between the parties. In all SFS chapters, parties commit to cooperate by exchanging information, expertise, and experience on issues such as sustainable production and consumption or ensuring security of food supply. These areas for cooperation are very similar across SFS chapters, although there are some differences in the topics covered, specifically on animal welfare, antimicrobial resistance, and fraud along the food chain.

Moreover, the language used in these chapters varies, which is important as strong and precise wording of commitments can contribute to their effective implementation. The EU-Chile Agreement, for instance, includes a concrete, tangible commitment to phase out the use of antimicrobials as growth promoters in livestock farming. Both the EU and Chile have adopted measures to do so, highlighting that even non-binding, cooperation-based provisions can translate into tangible outcomes. This example shows that SFS chapters can lead to positive sustainability outcomes for both trading partners – which the EU should further enable.

To do so, the EU should tailor cooperation provisions in SFS chapters to the specific needs and socio-economic context of its trade partners. Provisions should focus on addressing the sustainability challenges most relevant for a country’s agricultural trade with the EU. The existing SFS chapter clause on reducing pesticide use, for example, could be particularly important for certain developing countries whose agricultural production and therefore exports rely on the use of certain pesticides, including substances the EU is seeking to prohibit. More tailored provisions should clearly highlight the actions trade partners can take to achieve commitments made in SFS chapters as well as to comply with EU autonomous measures affecting the agri-food sector.

In the case of developing partner countries, SFS chapters should also include commitments to provide tailored technical and financial assistance to support partner countries both in implementing the sustainability commitments set out in the agreement, as well as in complying with EU autonomous measures. Discussing such support at an early stage of negotiations could help raise trade partners’ acceptance of more ambitious sustainability commitments and avoid situations where these turn into obstacles to the conclusion of negotiations. TSD commitments have, for example, proven to be a key roadblock to the conclusion of the EU-Mercosur Association Agreement. To provide such assistance, the EU could mobilise different instruments, including development cooperation and the Aid for Trade programme, while fostering investment and private sector engagement.

3. The EU should use SFS committees to translate commitments into practice and strengthen dialogue with partner countries on sustainability standards

SFS chapters establish specialised committees, comprised of representatives of the two parties responsible for overseeing the chapter’s implementation. While most of the chapter provisions consist of broad cooperation commitments, framed in “best-endeavour” language, these dedicated SFS committees have the mandate to develop detailed roadmaps and work plans, to specify milestones for implementation, and conduct periodic evaluations of the progress made. They are therefore an important avenue to translate broad, non-binding cooperation clauses into concrete action.

In addition, these committees provide a dialogue platform for trade partners to raise challenges they face in implementing SFS commitments or complying with EU measures and – in the case of developing and least developed countries – to discuss how the EU can best provide support. These committees could also develop corrective actions where trade under a concluded agreement creates negative effects on food system sustainability.

Lastly, going forward, these committees should be leveraged to discuss and foster alignment on sustainability standards. As the EU implements its autonomous measures, questions regarding the compatibility of standards will become an increasingly pressing issue which, if not addressed properly, might lead to trade tensions. Looking for synergies and mutual recognition of standards, whenever possible, will be critical to streamline the implementation of the EU’s autonomous measures and lower compliance costs for third country producers, European companies exercising due diligence, and customs authorities verifying imports.

Conclusion

The EU-New Zealand FTA, the first trade agreement including an SFS chapter, entered into force in May 2024. While these chapters are an innovative instrument and constitute a significant shift in the EU’s approach to sustainable agricultural trade, the effectiveness of SFS chapters in current and future agreements will depend on their acceptance by trade partners as well as on their effective implementation. A more inclusive, sustainable, and cooperative approach by the EU can facilitate the conclusion of ongoing negotiations and ensure that all affected food systems actors benefit from the new sustainability provisions.

In addition, the EU should leverage its trade agreements, which provide an important platform for dialogue with partner countries on a wide range of sustainability issues. If properly adapted to trading partners’ needs and contexts, trade agreements can help tackle some of the limitations of the EU’s autonomous measures and contribute to raising acceptance abroad for the EU’s green trade agenda. It will be crucial for the EU to properly balance its unilateral and bilateral approaches going forward, as it needs to both level the playing field for EU producers and maintain open, sustainable, and fair trade.

Lastly, the EU will have to deal with increasing pushback by domestic constituencies against the EU’s green regulations, which could also affect its trade policy in the next mandate. Only if it can implement ambitious sustainability policies within Europe, will the EU be able to credibly push for stronger sustainability provisions in its trade policy.

This blog post is based on Europe Jacques Delors’ recent publication entitled “Towards a more inclusive, sustainable, and cooperative EU agricultural trade: Lessons from practice”. The paper is a collaboration between Europe Jacques Delors, the United Nations Environment Programme (UNEP), and the UK Research and Innovation Global Challenges Research Fund (UKRI GCRF) Trade, Development and the Environment Hub (TRADE Hub).

[1] The definition of sustainable food systems is used in slightly different formulations across the trade agreements discussed. For an example see the EU-NZ FTA, article 7.3.