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The US has demanded that the EU delay a ban on cocoa, timber and sanitary products potentially linked to deforestation, arguing that it would hurt American producers.
The request, made in a letter to the European Commission seen by the Financial Times and dated May 30, comes seven months ahead of the bloc’s planned implementation of the ban.
The law would oblige traders to provide documentation showing that imports ranging from chocolate to furniture and cattle products were made without destroying any forests.
In the letter, Gina Raimondo and Thomas Vilsack, the US secretaries of commerce and agriculture respectively, and trade envoy Katherine Tai, said that the deforestation law posed “critical challenges” to US producers.
“We therefore urge the European Commission to delay the implementation of this regulation and subsequent enforcement of penalties until these substantial challenges have been addressed,” they said.
US timber merchants have said they are considering cutting EU export contracts because they cannot prove their paper does not come from deforested land.
Other trading partners, particularly major palm oil-producing countries Indonesia and Malaysia, have also urged Brussels to postpone the application of the law.
The sectors most impacted by the regulation in the US, the EU’s second-largest import partner, are the timber, paper and pulp industries. The EU imported about $3.5bn of American forest-based products in 2022, according to US International Trade Commission figures.
The law requires evidence that products come from deforestation-free land after 2020, including a statement with geolocation data. But the American Forest and Paper Association (AF&PA) said it was “impossible” to comply because paper and pulp are made from leftover sawmill and forest residue blended from different sources.
“This makes tracing each individual wood chip back to the original forest plot of land effectively impossible. Additionally, the technology needed to trace our fibre flow to comply with this requirement does not currently exist,” AF&PA said.
There could be an impact on particular products such as tissues and menstrual products as the US supplies 85 per cent of the pulp used in these items globally, it said.
In October, 66 members of Congress wrote to Tai asking her to raise the challenges US paper and pulp producers were facing as a result of the EU’s deforestation law with Brussels.
“The EU’s regulation imposes impractical requirements that would unnecessarily restrict trade for products from low-risk countries that have responsibly managed supply chains, such as the United States,” the congressional letter said.
There is also internal opposition within the EU. The bloc’s development commissioner Jutta Urpilainen and agriculture commissioner Janusz Wojciechowski have called for a delay, as have a majority of EU agriculture ministers led by Austria, who also wanted to exempt small farmers from the rules.
The International Trade Centre, a UN-backed body, said that the law could cut out small producers from developing countries, who lack the technology to verify that their goods have not been grown on deforested land, from the supply chain.
EU environment commissioner Virginijus Sinkevičius has championed the law, travelling to Latin America and African countries earlier in the year to “calm any fears about the possible consequences”, he said in March.
The regulation demands that customs authorities must check 9 per cent of products coming from countries at “high risk” of deforestation and 3 per cent from “standard risk” countries. Due to the pressure from producer countries, the commission has agreed that all countries will be categorised as “standard risk” in the first instance.
The commission confirmed that it had received the US administration’s letter and said that it would reply in due course.
