RATIONALIZATION OF ENVIRONMENTAL POLITICAL ECONOMY IN EU-JAPAN ECONOMIC PARTNERSHIP AGREEMENT (EU-JEPA)

RATIONALIZATION OF ENVIRONMENTAL POLITICAL ECONOMY IN EU-

JAPAN ECONOMIC PARTNERSHIP AGREEMENT (EU-JEPA)

Irvan Helnord

EVE 394 - Topic: Global Environmental Perspectives

Professor Helman

June, 2024

Introduction

The process of global integration, or economic globalization, that has taken place

since almost 60 years ago has had a significant impact on the growth of trade between

countries. As one of the motors of economic development, international trade continues to be

promoted so that it runs more freely and does not encounter various obstacles. This

liberalization process has resulted in an increase in the value and volume of international trade

this century. World Bank data shows that the value of global exports of goods and services in

2019 reached US$ 24.795 trillion, growing dramatically from US$ 383.603 billion in 1970

(World Bank, 2019a). In addition to experiencing drastic growth in terms of valuation,

international trade is also increasingly showing its influence on global economic

development. World Bank data again shows that in 2019 the proportion of global trade to

global gross domestic product (GDP) reached almost 60.4 percent, growing dramatically from

27.3 percent in 1970 (World Bank, 2019c). This sizable contribution of trade has also resulted

in an increasingly "prosperous" world, which can be seen from the nominal global GDP in

2019 which reached US$ 87.698 trillion or increased rapidly from US$ 2.961 trillion in 1970

(World Bank, 2019b).

As international trade shows its massive growth, the discourse on the relationship

between trade and the environment has become a hot topic of discussion. In their book "Paths

to a Green World: The Political Economy of the Global Environment", Clapp and Dauvergne

(2005) state that there are at least four main perspectives that have developed in the discourse

on global environmental change and its relationship with the global political economy,

namely the perspectives of market liberals, institutionalists, bioenvironmentalists, and social

greens.

Clapp (2014) argues in his article entitled "International Political Economy and the

Environment" that there has been a long and heated debate between those who support free

trade and those who oppose it. Proponents of free trade (market liberalists) argue that overall

trade has a positive impact on the environment. Their main argument lies in the efficiency and

conservation factors of free trade where by implementing production specialization policies,

countries can allocate their scarce resources more efficiently when compared to protectionist

countries that implement self sufficiency strategies. In contrast to the view of the In contrast,

opponents (bioenvironmentalists and green socialists) argue that global trade liberalization

has had a negative impact on the environment. They argue that trade liberalization has

encouraged countries (especially developing countries) to increase their industrial output,

which often results in environmental damage such as deforestation, over-mining, and the

accumulation of hazardous industrial waste.

The debate between the two perspectives continues until the emergence of the issue of

climate change in the discourse of the global environmental regime. Various initiatives related

to this issue have been carried out by the global regime, which is mainly commanded by the

United Nations (UN), including one of them in the form of the achievement of the Paris

Agreement on climate change. This agreement is an international agreement under the United

Nations Framework Convention on Climate Change (UNFCC) reached during the 21st COP

in Paris in 2015. The main objective of the Paris Agreement is to strengthen the global

response to the threat of climate change by keeping global temperature rise this century below

2°C, above pre-industrial levels, and to pursue efforts to limit further temperature rise to

1.5°C (United Nations Framework Convention on Climate Change, 2019). The European

Union has actively participated in the Paris Agreement, from the negotiation process to the

implementation of the agreement.

The discourse on the relationship between trade and the environment entered a new

dimension when the European Union adopted a policy of not entering into trade agreements

with parties that did not participate in the international environmental agreement Paris

Agreement, as well as parties that did not take concrete steps to combat global warming. In

2018, the European Union, through Trade Commissioner Cecilia Malmström, stated that

reference to the Paris Agreement was needed in EU trade agreements (Stone, 2018). The

direction of EU trade policy that includes the Paris Agreement clause was first implemented

in the EU-Japan Economic Partnership Agreement (EU-JEPA), which was agreed by both

parties on July 17, 2018 and took effect on February 1, 2019. The Paris Agreement

compliance clause is more specifically contained in the Trade and Sustainable Development

chapter Article 16.4. In addition to being first initiated by the European Union, the EU-JEPA

is also the first bilateral trade agreement in the world to incorporate the Paris Agreement

compliance clause into its provisions.

The Paris Agreement's (environmental) clause in the EU-JEPA (free trade) agreement

clearly contradicts the two previous perspectives. The pro-trade perspective promotes the

need for environmental barriers in trade agreements given the positive role of trade itself. In

contrast, the counter-trade perspective campaigns for the slowing down or even termination of

any agreements that promote free trade. The lack of agreement between these two paradigms

comes along with the differences between them in understanding the relationship between

trade and the environment. So, how can the presence of the Paris Agreement clause in the

EU-JEPA be rationalized?

Economic Rationalization, Institutionalist Perspectives, and Environmental Diplomacy

Economic Rationalization

In understanding the environmental political economy rationalization of the EU's policy of

including a Paris Agreement compliance clause in the EU-JEPA, there are several similar

papers that have attempted to explain these factors. The author divides them into two

categories. The first category is writings that put forward economic profit considerations as a

rationalization for countries to engage in environmental agendas in trade agreements. The

second category is research that includes aspects of domestic political influence.

Research by Foramitti (2019) explains that the European Union's desire to include the

Trade and Sustainable Development (TSD) chapter is the potential for economic benefits.

This argument is also supported by Becker (2019) who states that economic interests are a

driving factor for countries in implementing environmental standards in accordance with

international agreements. Milewicz et al (2018) add that the country's willingness is also

influenced by the prospect of the emergence of various trade agreements in the future which

also carry environmental clauses. The state certainly does not want to be left behind from the

potential benefits it gets from these agreements. This is why the negotiation of environmental

clauses in trade agreements is often difficult due to strong conflicting economic interests as

stated by Morin and Jinnah (2018).

In addition to economic rationalization, states also act on the basis of their domestic

political conditions and structures. Moltke (2002), Werksman and Buri (2019), and Nakanishi

(2020) suggest that the inclusion of environmental clauses in EU trade agreements is intended

to accommodate the regulatory climate and political structure that exists in the EU itself.

Olper (2016) added the significance of the role of civil society in its capacity as voters and

lobbying groups that are able to influence government behavior, including regarding the

environmental agenda in trade agreements.

The author's review of these papers shows that a country's desire to incorporate an

environmental agenda into a trade agreement is influenced by a variety of factors, some of

which may be economic or domestic political. In this study, the author argues that all of these

factors have their own influence in the EU-JEPA case. However, in addition to these two

factors, the author also sees the important role of international regime conditions and state

participation in this order. In this paper, this factor is reflected in the conditions of the Paris

Agreement, which at that time (and until now) was threatened with legitimacy by the exit of

the United States. Therefore, the author will also discuss this factor as one of the factors

influencing the existence of the Paris Agreement clause in the EU-JEPA.

Based on the above discussion, this paper will be directed to answer the research

question that asks about the linkage of environmental political economy rationalization

between trade agreements and environmental measures. Specifically, this paper departs from

the problem formulation, namely, "Why did the European Union include the Paris Agreement

compliance clause in its trade agreement with Japan in the form of EU-JEPA?". The author

argues that the rationalization factor of environmental political economy has influenced the

inclusion of the Paris Agreement compliance clause by the European Union in the EU-JEPA.

Institutionalist Perspective

As discussed, there are two spectrums of perspectives in the study of International Political

Economy (IPE) that contradict each other in looking at the relationship between trade and the

environment. However, in contrast to these two camps, the institutionalist perspective is

present to accommodate and bridge the arguments of each camp. This perspective will be

used by the author to answer the previous research question.

The institutionalist perspective provides a diagnostic analysis that in principle the

relationship between trade and the environment is positive. The institutionalist perspective

shares the same view as the proponent camp regarding the positive impact of trade,

investment, and market liberalization on the environment. However, this positive relationship

can only be achieved if there are restrictions in place. The institutionalist perspective

recognizes that there are some forms of trade that should not be supported by the global trade

regime due to their harmful impact on the environment such as trade in toxic substances and

hazardous chemicals. In addition, these restrictions are necessary to accommodate the

potential environmental damage that is often caused by the economic motives of countries. In

order to reap the positive impacts in terms of both trade and the environment as much as

possible, the institutionalist perspective provides a prognostic analysis, namely the inclusion

of trade measures in environmental agreements and vice versa, environmental measures

become one part of the form of trade agreements between countries (Clapp, 2014).

Based on the diagnostic and prognostic analysis proposed by the institutionalist

perspective, propositions can also be drawn regarding the rationalization of the state in

including environmental clauses in its trade agreements. By including the clause, the state can

reap a balanced impact that is positive both in efforts to develop economic welfare and

environmental protection. This positive impact is the rationalization of the state in including

the environmental clause.

The conception of an institutionalist environmental political economy perspective in this

paper is interpreted as the existence of an environmental political economy rationalization

underlying the European Union's policy in incorporating the Paris Agreement compliance

clause into the EU-JEPA. The motives of environmental political economy here are

represented in the form of economic interests and domestic environmental political interests.

Economic interests here are in the form of 1) Increasing domestic competitiveness along with

the reduction of race to the bottom practices among trading partners and 2) As a projection of

the European Union's desire to become an alternative global economic leader amidst the

protectionism of China and the United States. Domestic environmental political interests here

are in the form of the realization of the norms and principles of EU regional environmental

policy at the international level.

Environmental Diplomacy

Apart from being driven by domestic economic and political environmental benefits, the EU's

policy rationalization is also influenced by the reality of global environmental governance.

Therefore, this paper will also use the conception of environmental diplomacy as its premise.

Environmental diplomacy can be defined as "The established method of international

discourse or the art of managing international relations, chiefly by negotiation, on issues

related to the environment" (Pisupati, 2015).

Environmental diplomacy initially revolved around local issues and was conducted

among a limited number of state actors. Until the early 1970s, the main themes of global

environmental discourse centered on issues of transboundary pollution and resource

scarcities (Stevis, 2014). Attention to these issues generally came from developed countries

that began to feel the negative impact of the massive industrialization process in their

countries. Therefore, the Multilateral Environmental Agreements (MEAs) produced during

this period were also largely the result of the initiation of developed countries aimed at

addressing transboundary industrial pollution and nature conservation issues among

themselves.

However, as the scientific evidence on the presence of climate change increases,

environmental diplomacy is also forced to change. The global danger posed by climate

change is a wake-up call to the world's countries that more comprehensive environmental

cooperation is a necessity. All parties, whether developed or developing, strong or weak,

populous or less populous, must contribute to addressing this common "planetary" problem.

There are five main elements that describe environmental diplomacy, namely 1) The subject

matter (climate change) is more long-term, 2) The importance of the role of science and

scientists, 3) The complexity of negotiations involving many parties, 4) The involvement of

equality issues and 5) Using creative and non-conventional diplomatic approaches (Benedick,

1998). Despite the increasing scale of diplomacy reflected in the growing number of MEAs,

environmental diplomacy is still entangled in the problem of compliance. Theoretically,

compliance in international agreements can be promoted either through positive incentives

(carrots) such as financial assistance or negative incentives (sticks) such as sanctions and

embargoes (Kolari, 2002). MEAs are problematic because they generally do not have enough

delicious carrots and a pretty hard stick to encourage countries' compliance. This is because

since their formulation, MEAs have been designed to be flexible enough to be agreed upon by

all.

One way to improve compliance issues in environmental diplomacy is through issue-

linkages. Issue-linkages are understood as a function where weaker environmental diplomacy

can borrow the enforcement power of other stronger forms of diplomacy such as economic

(Jinnah, 2011). Economic trade diplomacy such as in the form of Free Trade Agreements

(FTAs) is stronger because it has comprehensive and harsh legalization aspects (obligations,

precision, and delegation) (Condon, 2015). Issue-linkages are done by including

environmental protection norms or even compliance with an MEAs as one of the clauses in

FTAs.

The conception of environmental diplomacy here is understood as an additional

rationalization in the form of an interest in maintaining the sustainability of environmental

governance. The European Union incorporates the Paris Agreement compliance clause into

the preconditions of its FTAs (including the EU-JEPA) as a way to improve environmental

regime compliance through the enforcement power offered by these FTAs. As one of the

leading actors in environmental diplomacy, the European Union views that the effectiveness

of the Paris Agreement is also one of its foreign interests. This interest is seen as increasingly

urgent when the US exit from the Paris Agreement regime presents a major threat to the

sustainability of the climate change regime.

Methods

In order to explain the phenomenon of the inclusion of the Paris Agreement clause by the

European Union in the EU-JEPA, the author uses qualitative research methods. This method

emphasizes the collection and review of non-numerical data from a phenomenon to find out

the explanation behind it. The use of this method requires the collection of qualitative data in

the form of both primary and secondary data. Some of the data for this research comes from

primary data from government documents and international organizations. However, the

majority of the data used to support this research comes from secondary data, namely various

forms of literature such as books, journals, collections of scientific articles, and news. Various

forms of literature are obtained through the internet and libraries.

EU-JEPA Agreement and Paris Agremeent Clause

Indeed, the EU has included environmental issues in all "new generation" trade agreements

negotiated after 2006 (Bhardwaj, 2019). The first EU trade agreement to include

environmental issues in the TSD chapter was adopted in 2011 within the framework of the

EU-South Korea Free Trade Agreement (Simon, 2017). However, the direction of EU trade

policy that includes the Paris Agreement clause has only been implemented for the first time

in the EU-Japan Economic Partnership Agreement (EU-JEPA), which was agreed by both

parties on July 17, 2018 and took effect on February 1, 2019.

The European Commission's website states that one of the main objectives of this

agreement is "Helps us (European Union) shape global trade rules in line with our high

standards and shared values" (European Commission, 2019a). The standards and values here

can be interpreted as relating to the European Union's environmental standards and values,

which are based on sustainable development efforts and tackling climate change.

In addition to focusing on climate change (Paris Agreement clause) specifically, EU-

JEPA also addresses environmental governance and trade within the concept of sustainable

development. Sustainable development efforts are specifically regulated in chapter 16 on TSD

and are also included in other chapters such as the Technical Barriers to Trade chapter

(chapter 7) and the Good Regulatory Practices and Regulatory Cooperation chapter (chapter

18). In chapter 2 on Trade in Goods, it is also mentioned that each party can use GATT Article

XX on General Exceptions which allows for trade measures based on domestic environmental

protection objectives. Some sustainable development commitments between the two parties

include efforts to: "(1) Conserving and sustainably managing natural resources, (2)

Addressing biodiversity, including combating illegal trade in wildlife, (3) Sustainable

forestry, including combating illegal logging and (4) Sustainable fisheries, including

combating illegal, unreported and unregulated (IUU) fishing" (European Commission, 2017).

The agreement on the principles of transparency and accountability based on the

principle of public participation is a follow-up to the implementation of the sustainable

development clause. The European Union will establish a Domestic Advisory Group for the

EU-Japan Economic Partnership Agreement, so that the public can play an active role in the

implementation process of the agreement. The Domestic Advisory Group contains members

from labor unions, business associations, consumer organizations, and environmental

organizations. In addition, to maintain the consistency of the implementation of EU-JEPA

sustainable development, including the Paris Agreement compliance clause, a bilateral

dispute settlement mechanism was also developed, which is arranged in stages from 1)

Consultation, 2) Establishment of a panel of independent experts, 3) Publication of the panel

report, and 4) Implementation of the report results. This dispute settlement mechanism also

applies the principle of transparency that accommodates public participation (European

Commission, 2017).

Economic Interests: Economic Competitiveness and Leadership under the Threat of Race

to the Bottom and Global Protectionism

As explained earlier, the institutionalist perspective serves as a bridge of moderation between

the two poles of the pro-con perspective, each of which supports their arguments to the

extreme. However, it should be emphasized here that the institutionalist perspective generally

encourages the process of trade liberalization and rejects the destructive practices of trade

protectionism. This is because, according to them, the general economic benefits of trade

liberalization practices are constructive towards environmental protection efforts. In addition,

they assume that the presence of environmental measures in trade agreements can only occur

because of the economic benefits gained by the participants. The economic benefits gained

from such trade agreements are seen as not detrimental to the environment and encourage

conservation and protection efforts. This economic motive has influenced the formulation of

the EU-JEPA agreement and its climate change clause.

Although the institutionalist perspective generally views that globalization and

liberalization of world trade bring benefits to environmental protection efforts, it is also aware

of and concerned about the negative impacts that are likely to surface. One such concern is

directed at the emergence of race to the bottom practices among countries. Race to the bottom

is a practice in which countries race to reduce their domestic environmental standards to

achieve a competitive advantage in the wilderness of international trade liberalization. This

occurs due to the rationalization of these countries that weaker domestic environmental

standards will result in (1) protection of domestic product exports amid international

competition and (2) greater interest of MNCs to invest in domestic industries (Clark, 1995).

These advantages will put countries with lower environmental standards than their trading

partners will have a competitive advantage especially in terms of production costs.

The presence of this practice has also been noticed by developed countries with high

domestic environmental standards, including the European Union. If this practice becomes

widespread and becomes a global phenomenon, it will not only hamper global environmental

conservation efforts, but also put the European Union at a competitive disadvantage in

international trade and investment practices. The EU's high-cost domestic industrial products

will be faced with an unfavorable situation in the international market when they meet

industrial products from countries that do not have strict environmental regulations and have

lower costs. The presence of these economic interests has influenced the inclusion of

environmental clauses in the EU's international trade agreements, including in the case of EU-

JEPA.

Such "interventions" are expected to stimulate race to the top practices, especially

among trading partners who want to benefit from more comprehensive trade cooperation with

the EU. Race to the top is a practice where countries compete with each other to improve their

environmental standards to reap the economic benefits of the global economic liberalization

process. This practice often occurs when countries have strategic trading partners with strict

domestic environmental standards (Spilker et al., 2017). The existence of environmental and

climate change clauses in the EU-JEPA is expected to have an impact on the increasingly

stringent domestic environmental regulations in Japan and the EU-JEPA other countries

seeking greater EU market access. By doing so, the EU will reap economic benefits while

having a positive impact on global environmental protection efforts.

The presence of EU-JEPA with all its norms and values is also a milestone that signals

the European Union's desire to "play more" in the constellation of global economic

leadership. This desire is taken amid the conditions of the two world economic giants - the

United States and China - which are increasingly plunged into the abyss of trade wars and the

implementation of protectionist practices. This reality is certainly harmful to the global

economic order based on the principles of free trade and economic liberalization.

The EU has made its bilateral trade cooperation with Japan (as well as with other

countries such as Singapore and Vietnam) a form of global alliance that projects its influence

beyond Europe. Such a strategy could establish the EU as an "alternative global economic

leader" amidst the protectionist trade policies of the United States and the controversial

investment policies of China's BRI (Valero, 2019). This global leadership role is also a

platform for the projection of EU values and standards such as transparency, free trade,

sustainable development and environmental protection. Therefore, by becoming an

increasingly influential actor in the world economic arena, the European Union will also

increasingly benefit economically while continuing to export their domestic values and norms

to the rest of the world including with regard to climate change issues.

Domestic Environmental Political Interests: International Projections of the EU Regional

Environmental Order

A country's foreign policy is also influenced by the existence of domestic political interests in

theory and practice. Therefore, EU trade policies that include climate change clauses can also

be seen as a reflection of domestic political directions summarized in EU environmental

governance. Although the European Union is "only" a group of several sovereign states

(instead of sovereign states), thanks to its regional organizational governance system, the

European Union can be seen as a unitary actor. The role of the European Union's unitary

actor is particularly evident in its politics the global environment where European countries

put their diplomatic authority on the shoulders of the European Union.

Initially, the main idea of establishing the European Community (the predecessor

institution of the European Union) centered on the process of political and economic

integration and harmonization of domestic laws among European countries. At that time, the

formulation of specific environmental policies was still not the main discourse of European

policy makers. It was only in 1972 that the European Union began to seriously pay attention

to environmental issues with the adoption of the Paris Declaration in which European heads

of state declared the need for the presence of environmental policies that go hand in hand with

the process of European economic expansion, and called for the formulation of an action

program in the environmental field. Following this declaration, the first Action Programme

for the Environment was formulated a year later. Some of the main factors behind this turning

point include the occurrence of various natural disasters in Europe, which helped raise public

expectations (reflected in the establishment of environmental ministry positions in European

countries) and the increasing international awareness of environmental issues (reflected in the

Stockholm conference on the Human Environment in 1972).

Although the formulation of EU environmental policy dates back to the Paris

Declaration, it was not until 1987 that environmental issues had a legal basis in a European

treaty. The Single European Act in 1987 introduced the "Environment Title" (Title VII) which

provided the first legal basis for the implementation of a common environment policy aimed at

maintaining environmental quality, protecting human health, and ensuring the rational use of

natural resources. Subsequent EU treaties such as the Treaty on European Union (1992) and

the Treaty of Amsterdam (1997) further strengthened the legal basis for the inclusion of

environmental issues into the EU policy framework. The passing of the Treaty on the

Functioning of the European Union/Treaty of Lisbon (2007) further broadened the scope of

EU environmental policy with the inclusion of the goal of "combating climate change" as one

of the EU's specific objectives as well as the inclusion of the context of sustainable

development in the formulation of EU relations with other countries (European Parliament,

2019).

Today, the EU's environmental policy covers a wide range of areas and issues, from the

basics such as water and air quality, waste regulation, pesticide reductions The EU's

environmental policy is based on principles, some of which are quite general (polluter pays,

rectifying pollution at source), while others are more specific and reflect the EU's ambition

(precautionary pollution at source). To address these issues, EU environmental policy is based

on principles, some of which are quite general (polluter pays, rectifying pollution at source),

while other principles are more specific which also reflect the magnitude of EU ambitions

(precaution, sustainable development) (Mathis, 2016). In addition, EU environmental policy

is also supported by general EU principles that direct the process of integrating environmental

issues into various fields of EU policy. So it is not a surprise that EU policies outside the

environmental field (such as energy policy) also include environmental issues in it.

In terms of the EU's environmental governance, according to Clapp (2014), the EU is

widely seen as an example of a successful regional organization in combining regional

environmental regulatory harmonization projects with regional economic integration

processes. Environmental issues are seen as an integral part of the EU's trade and economic

policies. Alongside integration efforts, the EU's environmental policy is also centered on its

participation in international environmental cooperation. The EU has been a party to various

international environmental agreements and actively contributed to the agreement on global

strategies including the Paris Agreement on Climate Change in 2015.

This pattern of strict EU environmental policy has resulted in the inclusion of

environmental issues (including climate change) in trade agreements, including in the case of

EU-JEPA. This is because rationally, countries with strict domestic environmental regulations

generally do not feel the burden of spreading their standards globally. Some recent studies

have also strengthened this argument where it is explained that the commitment of the

European Union and the United States to include environmental clauses in their respective

trade agreements is also influenced by the desire to spread their domestic environmental

norms internationally (Morin et al., 2018).

The Importance of Environmental Diplomacy: Strengthening the Effectiveness and

Existence of the Paris Agreement Climate Change Regime

The institutionalist perspective has provided an analysis of what the relationship between

trade and the environment actually looks like. It argues that the political relationship between

the two can be positive in that trade cooperation can be a concrete platform for efforts to

address environmental issues, including climate change at a time when the global

environmental regime is facing challenges to its legitimacy and effectiveness. This is because

trade cooperation often provides valuable incentives such as market access and duty free

compared to MEAs that often provide burden costs and environmental benefits that are not

clearly visible. Moreover, the presence of environmental clauses in trade cooperation can also

help the implementation of such norms at a time when many MEAs are weak and tend to be

unenforceable (Coyler, 2004). Therefore, the institutionalist perspective provides a prognostic

framework for the inclusion of environmental measures clauses in trade agreements. This

argumentation can be seen to underlie the inclusion of the Paris Agreement clause in the EU-

JEPA agreement. Nevertheless, the institutionalist perspective still emphasizes the importance

of the existence of international governance as the spearhead in dealing with the possible

negative impacts of the current world trade liberalization (Vogler, 2014).

In addition to being influenced by regional political directions that focus on

environmental issues, the EU's international policy is also influenced by the existence of the

international environmental regime. In addition to being a supporting motor for regional

environmental governance, the international environmental regime is also one of the fields of

global diplomatic leadership of the European Union. Therefore, EU trade policies that include

climate change clauses can also be rationalized as a representation of the EU's efforts as one

of the leaders of the global environmental regime to "do more" in an effort to implement the

Paris Agreement while maintaining global commitment to the agreement.

The Paris Agreement is an international agreement under the UNFCC reached during

COP 21 in Paris in 2015. One of the key features of this agreement is the obligation for all

parties to each determine their nationally determined contributions (NDCs) and to

continuously improve their efforts and targets every five years. The Paris Agreement also

requires regular reporting from all parties on emissions and on efforts to implement their

NDCs (United Nations Framework Convention on Climate Change, 2019).

Since the Paris Agreement negotiation process, the EU has contributed to building a

broad coalition between developed and developing countries to reach an international

agreement. The EU's bridge-building strategy in international environmental agreements is to

crown the EU's role as "leaditor" or "leader- cum-mediator" (Bäckstrand & Elgström, 2013).

In addition to its role in the negotiation process, the EU also demonstrated its commitment to

participating in the Paris Agreement. The EU formally ratified the Paris Agreement on

October 5, 2016, which in turn brought it into force on November 4, 2016. Within the

framework of the Paris Agreement, the EU set its NDCs target to reduce greenhouse gas

emissions by 2030 by at least 40% compared to 1990 levels. All legislation related to the

implementation of this target was adopted by the EU by the end of 2018 (European

Commission, 2019b).

The existence of the Paris Agreement was immediately threatened when on June 1,

2017, US President Donald Trump announced that his administration would exit the Paris

Agreement. This announcement was a form of realization of President Trump's previous

campaign promise in which he promised to remove the United States from the Paris

Agreement. President Trump views that the substance of the Paris Agreement is unfair to the

United States and will permanently place the country's economy at a disadvantage

(Chakraborty, 2017). President Trump's decision was met by negative international reactions

that deplored and criticized the United States' exit from international climate change

governance, including the European Union. In addition to hindering the achievement of the

global targets set out in the Paris Agreement (due to the United States' position as the world's

second-largest polluter), the exit of the United States is also feared to lead to a setback in the

national commitment of other countries to the ambitions of the Paris Agreement (Herz, 2018).

The withdrawal of the United States from the Paris Agreement was then actively

responded to by the European Union. The European Union then immediately sought an

alliance with China to take on the role of world leader in efforts to address climate change.

European Union Climate Commissioner Miguel Arias Cañete stated that "The EU and China

are joining forces to forge ahead on the implementation of the Paris Agreement and

accelerate the global transition to clean energy" (Boffey & Neslen, 2017). This joint

commitment was perceived as one of the European Union's reactive responses to "save" the

Paris Agreement in the shadow of the United States' attempts to undermine it.

The development of climate change discourse at the international level, threatened by

the withdrawal of the United States, has also had an impact on the changing focus of EU trade

policy. Besides being influenced by regional environmental governance, the European Union

began to see the urgency of the presence of climate change clauses in international trade

agreements as one of the unilateral ways to save the Paris Agreement. Concern about this

began to appear from the direction of the EU's internal evaluation led by the French

authorities who considered that the EU's trade agreement with Canada, namely the

Comprehensive Economic and Trade Agreement, was not in accordance with efforts to

address climate change. Based on this evaluation, France pushed for "Compliance with the

Paris Agreement among the essential element clauses of the political dialogue and

cooperation agreements that are decided along with trade agreements" (Dupré & Leré,

2018).

France's view was positively addressed by the European Union where EU Trade

Commissioner Cecilia Malmström stated that a reference to the Paris Agreement is what is

needed in today's EU trade deals (Stone, 2018). France through its official, Jean-Baptiste

Lemoyne also called for "No Paris Agreement, no trade agreement. The US knows what to

expect" as a reaction to the United States' negative stance on global efforts to address climate

change (Dupré & Leré, 2018). This policy direction of international trade cooperation can

finally be implemented for the first time in the form of the presence of the Paris Agreement

clause in the EU-JEPA trade agreement.

Summary

The European Union has a new international trade policy direction when they require the

Paris Agreement compliance clause as one of the prerequisites for other countries that want to

enter into their bilateral trade agreements. The initial implementation of this policy was

realized in the EU-JEPA agreement between the European Union and Japan. This agreement

contains a Paris Agreement compliance clause and takes concrete steps in the fight against

global warming.

Based on the analysis proposed by the institutionalist perspective, the proposition can be

drawn that the EU policy is based on the potential to reap balanced impacts that are positive

both in efforts to develop economic welfare and environmental protection. This

rationalization is represented in the form of economic interests and domestic environmental

political interests. The economic interest here is in the form of increasing domestic

competitiveness and projecting alternative global leadership. The domestic environmental

political interest here is the realization of the norms and principles of the EU regional

environmental policy at the international level.

But in addition, the EU policy also has an additional rationalization in the form of an

interest in maintaining the sustainability of environmental governance. The EU incorporated

the Paris Agreement compliance clause into the preconditions of its FTAs (including the EU-

JEPA) as a way to increase compliance with the environmental regime through the

enforcement power offered by the FTA. This is apparently also due to the reality of the US

exit from the Paris Agreement regime which presents a major threat to the sustainability of

the climate change regime.