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The EU-MERCOSUR Free Trade Agreement

CONTEXT

The EU and Mercosur reached an agreement in principle (approval still pending by Member States) on a free trade agreement in June 2019. This ‘cars for beef deal is contradictory to environmental pledges and targets the countries on both continents have committed to, and blindly follows the road towards eternal GDP growth. Yet again, money rules the world.


In June 2019, an “agreement in principle” was reached between the EU and Mercosur (Brazil, Argentina, Paraguay and Uruguay) on a free trade agreement. The agreement would establish the largest free trade zone of the EU by reaching close to 800 million people on both continents, and one of the largest in terms of volume covered . ‘The deal should encourage exports by European companies in the automotive, chemical, pharmaceutical and clothing sectors (...)’. In exchange, Mercosur-based companies would benefit in particular in the agri-food industry, including the main products linked to deforestation: beef, soy, and ethanol drawn from sugarcane for biofuel. Beneficiaries of the deal are of course consumers and producers of the products that are more efficiently traded. Economic growth is a good thing, offering employment and economic security to people. There are however many voices calling for doing so in an equitable, circular and green way. Trade agreements could help meet climate goals if they focused on harmonizing standards on environmental goods and services, and eliminating subsidies to unsustainable practices.


Those suffering, if the deal were to be ratified, represent a far larger group. Firstly, farmers on both continents could suffer losses (e.g. beef farmers in Ireland and France, and Argentine wineries). Secondly, Europeans will now be exposed to a number of hazardous agro-chemicals (pesticides, insecticides, …) which are not approved in the EU, but which are used in Latin America Finally, those with an underrepresented voice at the (inter)national level, such as indigenous communities, wildlife and the planet’s climate. In the Brazilian Amazon, cattle ranching is the largest driver of deforestation, whereas conversion of Brazil’s pastureland to soy production has also caused continued indirect land use change, by pushing pasture expansion further towards the Cerrado. Additionally, the cattle farming sector in the Amazon is sometimes linked to land-grabbing practices related to organized crime and gross human right violations. Due to the importation of deforestation related goods and services such as livestock, agricultural commodities and oils between 1990 and 2008, the EU was already responsible for approximately 10% of global deforestation (an area about the size of Portugal ). Meanwhile global deforestation belongs to the category of land-use change, responsible for a whopping 6.5% of global greenhouse gas emissions. Useless emissions resulting from ‘re-importation’ and ‘redundant trade’ are also facilitated by free trade agreements, and unsurprisingly leading to quickly rising GHG emissions.


This trade deal is clearly opposed to what the EU and Latin-America have set out under the Convention on Biological Diversity and the Paris agreement, and ignores the massive evidence on the drivers and solutions of the biodiversity and climate crisis (e.g. IPBES, IPCC, WWF, CBD... ). Since the Rio Declaration, there is roughly 3 decades of growing public awareness un-mirrored by sincere ambitious political action. Despite public opposition from some EU member states, this trade deal is far from being off the table. Previous inclusions of the Paris Agreement in the trade agreement had already been hailed by EU officials as a victory, whereas the included clauses did not represent any enforceable mechanisms on violations to commitment on climate change. A leaked report from June 2020 still shows no improvement in this regard while officials are optimistic the agreement can be implemented. This might also explain why the Commission has failed to meet the requirements for public participation in the negotiation procedure.


THE EU 2030 BIODIVERSITY STRATEGY

The EU 2030 biodiversity strategy mentions trade policy will actively support and be part of the ecological transition. The Commission will ensure full implementation and enforcement of the biodiversity provisions in all trade agreements; will better assess the impact of trade agreements on biodiversity; and will follow up action to strengthen the biodiversity provisions of existing and new agreements ‘if relevant’. The Commission will also present in 2021 a legislative proposal and other measures to avoid or minimise the placing of products associated with deforestation or forest degradation on the EU market, and to promote forest-friendly imports and value chains. These intentions have also been made clear in the priorities and key actions the commission outlined in its communication on protecting and restoring the world’s forests. Sadly, ‘promoting’, ‘assessing’, ‘increasing efforts’, ‘exploring’, ‘encouraging’, … are all very useful and viable target actions, but are arguably vague and do not clearly state binding and enforceable frameworks that exceed the voluntary initiatives that have failed to halt deforestation. It would indeed be nice to know what exactly will be considered ‘relevant’.

Luckily, recent parliament adoptions called the Commission to put forward rules to stop EU-driven global deforestation through mandatory due diligence for companies placing products on the EU market, in other words, binding legislation to stop EU driven global deforestation.

CALL FOR ACTION

In our Call For Action we have called the EU to engage with best-available scientific and socio-economic evidence on the biodiversity crisis and its mitigating measures; as well as with global and regional multilateral environmental agreements.


In this context, we specifically urge the:

  • EU and Member States to not ratify the EU-Mercosur trade deal until the EU has invoked its legislative proposal to avoid or minimise the placing of products associated with deforestation or forest degradation on the EU market, and to promote forest-friendly imports and value chains.


  • European Commission to set up a legal framework that completely avoids the placing of products associated with deforestation or forest degradation on the EU market; that includes high carbon and biodiversity rich ecosystems other than forests; and ensures equal participation and opportunities for smallholders in producing markets.


  • European Commission to commit to transparent and timely involvement of civil society and impact assessments on the development of trade agreements, while holding itself accountable when failing to do so.


Written by one of our baes at Biodiversity Action Europe


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