EuMercosur, the same old story: business as usual and market’s supremacy.

09/11/2020 Sara Lorenzini Awareness, Climate Action, Life on Land, Peace,Justice and Strong Institutions, Sustainable Development Goals

By Alessia Tonin and Sara Lorenzini

Today is the Global Mobilization Day against the Treaty #StopEuMercosur. What is the EuMercosur Agreement? Which are its implications and limits? Why shall we ask to #StopEuMercosur?

What is the EuMercosur Agreement?

After twenty years of negotiations, on the 28th of June 2019 the EU announced the achievement of a trade agreement with the Mercosur Countries, namely Argentina, Uruguay, Paraguay and Brazil. This Trade Agreement is actually only a part of an overarching Association Agreement.

Essentially, the Trade Agreement will serve to increase and facilitate trade between the two blocks. The agreement will eliminate high customs duties by 90% in key EU export sectors (cars, machinery, chemicals and pharmaceuticals) and it will increase market access to Mercosur’s agricultural products. Indeed, the EU will liberalize 82% of food imports from Mercosur, amongst which beef, soy, ethanol drawn from sugarcane and poultry.

Which are the implications?

Since the beginning of negotiations in 1999, the European Commission has conducted several impact analyses on the possible economic, social and environmental effects of the EU-Mercosur agreement. Recently, the preparation of the Sustainability Impact Assessment (SIA) has been carried out by an independent study center, the LSE Consulting, that has set up special discussion tables with civil society and the business world both in Brussels and in Mercosur countries.

What has resulted is certainly not a favorable to the environment. The Agreement covers sectors that are highly polluting (i.e. car industry) and that contribute the most to environmental destruction, deforestation in the Amazons and climate crisis (i.e. soybean production and intensive livestock farming). It is estimated that, if approved, the agreement will cause an annual increase in deforestation of 25%. The Agreement is also expected to increase C02 emissions in the long term in Europe by 0.03% and the largest impact among Mercosur countries is for Argentina (0.69% increase). Moreover, given the higher European Union’s environmental, sanitary and phytosanitary standards, Mercosur countries could encounter difficulties in complying with them, being more likely to commit violations. In particular, the lower control over pesticides, GMOs and Hormones in the South American block may result in severe consequences on people’s health. This is also due to the lack of any mechanism to trace the origin of commodities. Furthermore, the Agreement will have a negative social impact with a possible increase in Human Rights violations, including physical violence, evictions and lands’ expropriations. In particular, proper concern shall be given to indigenous peoples with respect to labour force, land allocation, and proper distribution of surrounding natural resources issues.
Commercial asymmetries may also emerge; for instance, it is estimated that an increase in the EU exports of cars will cause an expected loss of 10,000 jobs only in Brazil. In the meanwhile, the creation of local value-chains as well as decentralised and resilient food systems will be hindered. A negative impact will be also encountered in the economies of LDCs countries outside the agreements that today exports to the EU (beeves and primary products), reducing their preferential market access and towards small European farmers.

What is missing?

As denounced by GreenPeace Germany, there has been a lack of transparency and democratic control in the process that led to the Agreement, excluding national Parliaments and the European Parliament from the decision-making bodies appointed to oversee its implementation. Furthermore, the Trade Agreement does not provide for enforcement mechanisms to supervise sustainability standards, or any binding instruments to implement them or sanction non-compliance. Moreover, the special chapter on Trade and Sustainable Development (TSD) within the agreement results to be inefficient and the European precautionary principle appears vague. The Parties have only confirmed their obligations as signatories of the main international conventions in this regard and no effective disposition has been made with reference to the Paris’ Agreement implementation. Moreover, there are no mechanisms to trace the origin of commodities. Finally, in the general Association Agreement, a “supremacy clause” is also lacking, there is no official statement establishing a priority of environmental reasons over the commercial ones.

Why shall we ask to #STOPEuMercosur?

From how the Eu-Mercosur trade agreement is shaped, it is clear – once again – that economy prevails over ecological, social, human rights and development policies. This is why civil society all over the world has already started to react to the Approval of the Agreement. For example, the Copa-Cogeca Union, which represents 23 million farmers across the EU, expresses general fear that small-size farming activities be discriminated in terms of prices. The German Association for an ecological-solidarity energy and world economy, PowerShift, underlined that the agreement does not pressure for forest and climate protection but rather it exacerbates the deforestation and climate crisis in the Amazon. Likewise the Brazilian association Imazon estimated a deforestation of 200,000 Sq km as the agreements entered into force, and asked for renegotiation of the agreement after a concrete study on the land cover change in the Mercosur region. Fairwatch commented on the difficulty in implementing the human rights recommendation of the Agreement without any legally binding mechanism. Even the European Economic and Social Committee (EESC) argued that the report underestimates the impacts of beef imports on EU small farmers. Moreover, 192 economists have also taken a stand on the economic implications of the Agreement.

After mobilizations, some European countries have stated their opposition to the Agreement in its current form. Since approval of all the EU MS is required for the Agreement to pass, these declarations are fundamental. To mention some, in June 2019, France, Poland, Ireland and Belgium addressed a letter to the President of the European Commission, Jean Claude Junker, expressing their concerns towards the potential negative effects of the Agreement on European countries, especially on the EU agricultural sector and rural economy. They claimed for the necessity of more guarantees concerning the compliance with sanitary, phytosanitary, animal welfare and environmental standards and proposed the institution of an ad hoc safeguard mechanism. The EU seems to have missed its opportunity to give environmental protection a much higher priority than cost efficiency.

Due to all these reasons, the EuMercosur Agreement in its current form must be stopped.

Refusing the EuMercosur Agreement does not mean refusing cooperation and multilateralism in all its form. It means, instead, asking that these can take place in the view of promoting an effective regulation of economic activities through their subordination to clear environmental and social standards, and the construction of effective mechanisms for guaranteeing participation and transparency in the sectors at stake.

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