Reconciling GHG Mitigation Objectives and WTO Rules: the EUDR’s Key Challenges under the TBT Agreement

The European Union Deforestation Regulation (EUDR) represents a major policy instrument aimed at halting deforestation and forest degradation while contributing to climate change mitigation by regulating trade in certain deforestation-risk products and commodities. This paper evaluates the EUDR’s compatibility with the World Trade Organization’s (WTO) Agreement on Technical Barriers to Trade (TBT Agreement), focusing on the principles of non-discrimination and necessity under Articles 2.1 and 2.2. The paper situates the analysis within the broader context of the climate crisis, highlighting the increasing use of trade-related measures by the European Union (EU) and other WTO Members to achieve environmental objectives. It assesses the EUDR’s risk-based approach, considering whether it constitutes a legitimate exercise of regulatory autonomy or whether it amounts to arbitrary or unjustifiable discrimination and unnecessary barriers to trade, particularly for developing and least-developed countries. Drawing on relevant WTO case law, including the EU – Palm Oil (Malaysia) dispute, the study anticipates potential outcomes should the measure be challenged. The findings indicate that although the EUDR imposes significant compliance costs with trade implications, its core objectives are justifiable under WTO law and thus likely legitimate. However, elements such as unilateral benchmarking and the imposition of differentiated obligations based on it may give rise to concerns regarding potential WTO inconsistency. The paper argues that the EUDR exemplifies the need to align climate-related trade measures with WTO disciplines, which provide tools to balance climate mitigation and trade liberalization. Parallels with the EU’s Carbon Border Adjustment Mechanism, already under WTO scrutiny, highlight the broader systemic implications of trade-climate interactions.