The EU-Mercosur Trade Deal’s Environmental Implications And Pushback

The EU-Mercosur free trade agreement, drafted in 2019, has been critiqued in both Europe and South America for its environmental implications. The Mercosur bloc includes Argentina, Brazil, Paraguay, and Uruguay. The trade deal would remove trade tariffs between the EU and Mercosur, increase exports, and create a free trade market that would impact about 800 million people. According to the BBC, this would lead to more exports of beef, sugar, poultry, and farm products from Mercosur, and more exports of industrial products and cars from the EU.

The EU is Mercosur’s lead trade and investment partner, according to Reuters, and the deal would save $4.5 billion on export duties. However, concerns pushed forward by environmental groups and politicians have caused EU countries to reconsider the deal. The concerns are that its ratification would lead to deforestation of the Amazon rainforest, which has already been severely damaged by a series of fires, and could accelerate climate change. Ireland, Luxembourg, France and the Netherlands are among the countries that have rebuked the deal. Although Germany was initially a prominent supporter, even German Chancellor Angela Merkel has expressed “serious doubts,” according to the Irish Examiner.

These critiques contrast with Brazilian President Jair Bolsonaro’s right-wing policies, which have been critiqued as part of a bigger agenda to weaken environmental protections of the Amazon. The Veblen Institute reported five environmental organizations complaining through the EU Ombudsman (an avenue for civil society to critique the European Commission) that the first draft of the Sustainability Impact Assessment draft interim report was published too late, four months after deal negotiations finished. After its drafting in 2019, the deal still has to be approved by all countries involved. While it was predicted to go into effect in 2021, plans to push its ratification have been stalled.

According to the BBC, EU Commission Chief Jean-Claude Juncker said that the EU-Mercosur deal exemplified the EU’s stand for “rules-based trade.” A European Commission press release stated “the deal is a balanced and comprehensive trade agreement,” which will “consolidate strategic political and economic partnership and create significant opportunities for sustainable growth on both sides, while respecting the environment.” European Commissioner for Trade Cecilia Malmström said the “agreement brings Europe and South America together in a spirit of cooperation and openness.” The deal was met with antagonism by 340 civil society groups in the month it was drafted. Laura Kehoe, an Oxford University scientist who organized a letter supported by 600 environmental scientists, told Politico that if the EU-Mercosur agreement “fails to protect the Amazon and its people, the EU’s climate and humanitarian commitments will lose all credibility.” According to Politico, ranching, soy production, and mining have led to deforestation in the Amazon, and have destroyed 3.2 million acres of forest. Loggers encounter indigenous tribes, which results in human rights abuses. Politico quoted Bolsonaro who was reported to have said in a 1998 newspaper, “it’s a shame that the Brazilian cavalry wasn’t as efficient as the Americans, who exterminated their Indians.”

At this point, the most effective thing to do would be for European member states to unite in blocking the deal, or block the deal until proper safeguards are put in place. According to Al Jazeera, Irish Prime Minister Leo Varadkar and French President Emmanuel Macron stated they would vote against the deal unless Brazil took the necessary environmental precautions. More European states need to join them. Another agreement could be drafted; one that holds businesses and governments accountable to respecting the climate targets and standards outlined by the 2015 Paris Agreement. Environmental experts, civil society actors, and news outlets could ensure these standards are met through monitoring, analysis, and reporting, to which the participating states are held accountable. It is also important that the right experts oversee this process. According to Mongabay, Brazilian Environment Minister Ricardo Salles hired a business executive who had no previous experience working in the environment sector to lead Brazil’s environmental agency office. Salles also said that COVID-19 would distract people from government-led environmental destruction.

The EU-Mercosur deal has been in process for 20 years, during which 40 rounds of talks have taken place. The Guardian stated that given this long span of negotiations, the deal represents the “pro-industry values of the past rather than the environmental concerns of the present.” Venezuela was also part of the Mercosur bloc but has been suspended since 2016 when it did not meet group standards.

The ultimate ratification of the EU-Mercosur trade deal looks to be at a standstill until European States and Brazil can agree on the necessary regulations that will protect human rights and environmental abuses in the Amazon. Given Bolsonaro’s avid support of the deal as it is – he called the deal “one of the most important trade deals of all time,” according to the BBC – it is hard to see an agreement being reached by all states involved. It is now a question of where there will be a compromise; to the environment and ultimately, climate change, or to the benefits of a free trade deal.

Dayna Li