Study on the long-term linkages between climate objectives, international trade and investment :Final report

This report describes the anticipated effects on trade and on income flows from FDI of a transition of the EU towards a net-zero GHG emissions economy. It is based on the quantitative anticipations of EU demand for climate-relevant goods under 8 scenarios (transition pathways of the EU and of Rest of World, EU competitiveness). These effects are strongly positive on the trade of goods in an Optimistic scenario for EU competitiveness, and moderately positive to neutral in a Pessimistic scenario. These effects on income flows from FDI lead to a modest deterioration in the balance of payments, which is more than compensated by the gains in trade. The stakeholders in the sectors of climate change-mitigating goods were surveyed. Amongst the surveyed stakeholders who completely filled out the survey, most of them are not in favour of trade liberalisation in their sector. The study concludes with recommendations on the position of the EU in future trade negotiations for the climate-relevant goods for which offensive interests were identified (wind power), as well as for defensive interests (steel, batteries, solar power, electric personal vehicles, nuts, legumes, vegetable oils).