'Week Ahead' and trade agenda, Latest news

Week Ahead: Ukraine and Moldova, CBAM, Energy Charter Treaty, TSD chapters

A decisive week for the geopolitical future of the EU and for the energy/climate/trade nexus lies ahead. By Rob Francis and Iana Dreyer.

Capitals to decide on Ukraine, Moldova candidate status

European Union member states are due to decide at a head-of-state meeting on Thursday and Friday (23 and 24 June) whether they will follow up on the European Commission’s recommendation to grant Ukraine and Moldova candidate status to the EU. The EU executive issued this recommendation last Friday.

EU accession is an all-of-government issue covering practically all aspects of a state’s future.

For Ukraine, the status itself, under the condition that membership perspective is credible, would help the country a long way in rebuilding its economy and diversify its trade after the war that is currently being waged by Russia on parts of its territory, Nazar Bobitski explained in an interview with our editor Iana Dreyer.

European Parliament in second attempt at voting on carbon border measure

On Wednesday (22 June) the European Parliament will have a second shot at adopting its position in plenary on the European Commission’s proposed carbon adjustment mechanism.

Earlier this month, CBAM rapporteur Mohammed Chahim had pulled the vote after his colleagues rejected their own report on the review of the EU’s emissions trading scheme over fears that it was lacking in environmental ambition. The CBAM and ETS are closely linked.

At the time the Dutch S&D group member said that MEPs needed “time to reconcile the proposals”.

Last week a deal was struck  between the three largest political groups in the parliament on some of the key elements of the file, notably the timeline for the phase-in of the CBAM and export rebates.

This provisional agreement should theoretically pave the way towards adoption on Wednesday and enable the parliament to begin negotiations with the council as soon as the latter has finalised its own position.

Energy Charter Treaty modernisation negotiations reach endgame

ECT modernisation negotiations have been held non-stop in recent weeks with the goal of being able to announce a deal at a ministerial meeting of energy ministers in Brussels on Friday.

The aim of this modernisation process is – among others – about including more environmental provisions in the agreement and overhauling some investment protection rules. Transit rules are also being reviewed.

The EU has asked for fossil fuels to be carved out from investor protection obligations by 2030 – sources indicate that it appears on track of having achieved that carve-out for itself.

More background and technical insights into these negotiations here.

‘Trade and Sustainable Development chapter’ review 

Also on Wednesday, the commission will present its much-anticipated review of the 15-point action plan concerning its trade and sustainable development chapters in free trade agreements.

The review was brought forward from 2023 by commission executive vice-president and commissioner for trade Valdis Dombrovskis during his confirmation hearing in 2020.

The EU executive has already signalled that one major change would be the introduction of sanctions in the case of non-compliance of TSD provisions, although only as a last resort.

This in turn reflects NGO concerns that the enforceability of the chapters currently lack teeth.

The commission has also said that the reviewed TSD chapters will be tailored to the specific trade partner, with the new approach likely to be presented as a “first test run” to New Zealand before the summer.

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