Make-or-break: Including Multilateral Environmental Agreements as “essential elements” in EU Free Trade Agreements

Free Trade Agreements (FTAs) are a critical tool for aligning the EU’s trade and environmental agendas. This policy brief, published in collaboration with Europe Jacques Delors as part of the Greening Trade series, examines the growing momentum to elevate Multilateral Environmental Agreements (MEAs) to the status of ‘essential element’ clauses in EU FTAs. Essential elements are provisions whose violation can trigger the suspension of treaty obligations, giving them far greater enforcement power than standard Trade and Sustainable Development (TSD) chapters.

This publication traces the origins and evolution of essential element clauses in EU external agreements, noting that they have traditionally been applied to human rights and democratic governance commitments. The authors argue that extending this mechanism to key environmental agreements — beginning with the Paris Agreement on climate change — represents a significant and necessary step toward ensuring that trade liberalization is genuinely aligned with environmental protection.

A central contribution of the paper is the development of analytical parameters to assess which MEAs could appropriately be considered essential elements of future EU FTAs. The authors evaluate factors including the universality of the agreement, the strength and specificity of its commitments, the relevance of its provisions to trade flows, and the existence of compliance mechanisms. Using these criteria, the paper examines the suitability of several MEAs, including the Paris Agreement, the Convention on Biological Diversity (CBD), the Convention on International Trade in Endangered Species (CITES), and the Basel Convention on hazardous waste.

The authors then focus on operationalization, with particular attention to the Paris Agreement. It distils the ‘essence’ of the Agreement — the provisions that constitute its core commitments — and explores how non-compliance could be defined and assessed in the context of FTA enforcement. The authors acknowledge the practical and diplomatic challenges involved, including the risk of politicizing trade relationships and the difficulty of establishing clear thresholds for breach.

The brief concludes that making MEAs essential elements of EU FTAs has the potential to significantly strengthen the coherence between trade and environmental policy. However, it cautions that the EU must ensure that such provisions are designed in a way that is credible, enforceable, and sensitive to the development contexts of partner countries, to avoid undermining the very objectives they seek to advance.