Exploring the interface between unilateral and bilateral approaches to greening EU trade

This policy brief, published in collaboration with Europe Jacques Delors as part of their Greening Trade series, unpacks the key differences between the EU’s unilateral and bilateral approaches to sustainability in trade, and analyses the implications of these differences for the coherence and effectiveness of EU trade policy.

On the unilateral side, the EU has adopted an increasingly assertive stance through measures such as the EU Deforestation Regulation (EUDR), the Carbon Border Adjustment Mechanism (CBAM), the Corporate Sustainability Due Diligence Directive (CSDDD), and the Ecodesign for Sustainable Products Regulation (ESPR). These instruments set binding sustainability requirements on products entering the EU market, irrespective of negotiated agreements with partner countries. On the bilateral side, the EU’s approach has traditionally been channelled through Trade and Sustainable Development (TSD) chapters in FTAs, which promote environmental and labour standards through dialogue, cooperation, and incentive-based mechanisms.

The authors compare these two approaches across several dimensions: the objectives they pursue, the nature and strength of the obligations they impose, and the avenues available for enforcement. The analysis reveals significant divergences. Unilateral measures tend to be more prescriptive and enforceable, with direct market-access implications for non-compliance. Bilateral TSD chapters, by contrast, have historically relied on softer enforcement mechanisms, although recent reforms have introduced the possibility of trade sanctions for violations of core commitments.

The brief examines the implications of these divergences for four key areas: ambition, legitimacy, negotiating power, and capacity building. It argues that while unilateral measures can drive faster progress on environmental objectives, they raise concerns about legitimacy and fairness, particularly for developing country partners that have limited input into their design. Bilateral agreements, while slower and more incremental, offer greater scope for cooperation, capacity support, and shared ownership of sustainability goals.

The brief concludes that the EU’s green trade agenda would benefit from greater coherence between its unilateral and bilateral instruments. They call for a strategic approach that leverages the strengths of each, using bilateral agreements to provide support and partnership frameworks that help trading partners comply with the EU’s increasingly ambitious unilateral sustainability requirements.