The EU trade policy has been considered an important instrument to leverage power in international affairs. Being one of the largest markets in the world, the EU has constantly used market power as an instrument to adjust the impact of trade on the environment by including environmental provisions in trade agreements to reach non-trade policy objectives. Upon this idea over the last decades, the EU has built its reputation worldwide as a leading regulatory power, capable of shaping international regulatory regimes in various sectors. However, it seems that the complexity of implementation in the internal markets of trade partners has made it difficult to have short-term results on the way to reaching climate ambitions. The inefficiencies of the environmental provisions included in trade agreements might have structural nature related to the economic structure that particularly developing countries are relied upon, but also technical, associated with the domestic capacities to implement the legislation. In this context, the EU is adopting a new legislative package, Carbon Border Adjustment Mechanism (CBAM), a unilateral measure that will tax imported goods entering the EU internal market. Introducing a carbon tax for imported goods it’s not simply related to the economic impact that may have to trade partners, but also the architecture of the External policy design. This research project looks at the existing policy and tries to understand to what extent the CBAM improves the policy integration of the EU trade and climate policy by analyzing a set of policy documents; and secondly, to identify the opportunities for a spill-over effect on policy design that CBAM might have to trade partner countries and to international trade regime.

Key words: CBAM; Trade Policy; Climate Policy; Policy Coherence.