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Centre for Commercial Law Studies

Professor Rafael Leal-Arcas publishes new research on EU-China Trade Relations and on the Carbon Border Adjustment Mechanism

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Professor Dr Rafael Leal-Arcas, Jean Monnet Chair in EU International Economic Law at Queen Mary University of London, has published new research on EU-China trade relations and on the controversial Carbon Border Adjustment Mechanism.

Challenges and Opportunities in the EU-China Trade Relations

R. Leal-Arcas, “Challenges and Opportunities in the EU-China Trade Relations,” in Young-Chan Kim (ed.) China and the Belt and Road Initiative: Trade Relationships, Business Opportunities and Political Impacts, ‘Understanding China' series, Springer Nature, 2022; ISBN: 978-3-030-86121-6

Abstract

This chapter analyses European Union-China trade relations in the context of the current negotiations for a new comprehensive framework agreement between the European Union (EU) and the People’s Republic of China. China is a strong economic power with increasingly sophisticated production in its coastal regions and is attempting to establish itself as a gravity centre by concluding many bilateral free-trade agreements in the region. Although China has a strong hold in the Far East, there may be specific policy areas in which China’s influence ends up being global. The chapter consolidates China’s relations with the European Union, addressing the main arguments that were considered during the ratification process of the Treaty of Lisbon. It examines the mechanisms behind the initiative that provided for a permanent president of the European Council and a single foreign affairs post for the entire EU, which facilitated the EU’s coherence in its external affairs. Moreover, the chapter concludes that the European Commission should negotiate the prospective Partnership and Cooperation Agreement between the EU and China more constructively, without patronizing, and instead accept China as an equal player in the current multipolar framework of global economic governance.

A legal exploration of the European Union’s Carbon Border Adjustment Mechanism

R. Leal-Arcas et al., “A legal exploration of the European Union’s Carbon Border Adjustment Mechanism,” Indian Journal of International Economic Law, Vol. XIV, 2022

Abstract

In December 2019, the European Commission released a mechanism to fight climate change, namely the European Green Deal. This policy was put in place to materialize the goals of the Paris Agreement on Climate Change of 2015, that is, to combat the issue of climate change along the lines of sustainable development and fight poverty. In the context of the European Green Deal, one of the key instruments envisaged to achieve the ambitious plans of the European Union (EU) is the so-called Carbon Border Adjustment Mechanism (CBAM), which is the focus of this article and has been described as an ‘extraterritorial outreach’ for attempting to regulate matters outside the EU borders. This article seeks to answer is whether the CBAM is justified in line with the need to protect the environment and address climate change as well as increasing global economic welfare and reducing poverty. This article provides an overview of CBAM, analyzes the rationale behind CBAM as well as the various misgivings from third parties. It contextualizes CBAM in the context of free trade and examines whether CBAM is consistent with multilateral trade rules. It then provides the design of a CBAM based on the principles of international trade and sustainable development. The article concludes that, overall, the analysis of CBAMs, particularly regarding the fervency of the EU to make its CBAM compatible with both trade rules and climate change objectives, demonstrates states’ growing interest in protecting the planet, while preserving economic values; it also indicates the importance of trade in managing those interests.

 

 

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