Landmark International Agreement on Circular Economy

The Memorandum of Understanding on Circular Economy Between the European Commission and the National Development and Reform Commission of the People’s Republic of China, dated July 16th, 2018 (the “EU-China Agreement”) may be light on binding commitments, but is, nonetheless, a true watershed event on the path to a circular economy (CE) for a number of reasons:

– it may well be the first international agreement (excluding intra-EU initiatives) on CE, and certainly the most significant multi-state development since the EU Action Plan;

– it brings the parties’ joint efforts on CE efforts within the larger EU-China 202 Strategic Agenda for Cooperation and the 2030 Agenda for Sustainable Development, making it easier to address as part of these broader commitments;

– it identifies areas where cooperation is needed between the parties, including:

o the design, planning and implementation of strategies, legislation, policies and “major initiatives” on CE matters;
o product composition, including eco-design and eco-labeling;
o standards for corporate participation in CE, such as extended producer responsibility and green supply chains;
o environmental impacts such as chemicals, plastics and waste; and
o CE finance.

– finally, it’s existence implicitly, if not explicitly, recognizes that nations and international business must collaborate on CE to ensure its harmonization within existing global trade and commercial practices.

What remains to be seen, however, is how far countries are prepared to cede their independence in order to achieve tangible CE results. This push for close collaboration may well come from the business community intent on maintaining international supply chains and sales channels which permits the merchantability of products across continents in the face of local recycling standards.

Resource recovery performance standards, including those considered “eco-design”, may well be achievable internationally with the influx of new design initiatives presently being unleashed. Less certain will be agreements on product content and sourcing, which may divide markets between sustainability goals and costs.

For now, the EU-China Agreement can be appreciated for what it stands for – a significant initial step towards the internationalization of CE.