The EU-Mercosur trade agreement: What is it, and what could it mean for forests and human rights?

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In June 2019 the European Union (EU) and Mercosur (Brazil, Paraguay, Argentina and Uruguay) announced that they had reached an ‘in principle’ agreement on the content of a bilateral trade agreement which they had been negotiating, on and off, for over 20 years. Most of the text of the trade agreement is now public in draft form, although some important annexes and the framing preamble are not available. This may be because they are still being worked out, behind closed doors.

This briefing note lays out what we know about the proposed trade agreement, what we do not yet know, and some of the implications for people and forests. Addressing climate change, keeping forests standing and respecting people’s right to make decisions about their own lives can only happen if trade is carried out in a way that promotes deforestation-free supply chains and respects community and Indigenous Peoples’ rights. The EU-Mercosur agreement is far from reaching that standard.

We hope this briefing will provide a discussion for NGOs in Brazil who want to understand the implications of this deal for people and forests and take action

In an open letter published June 2019, over 340 civil society organisations demanded that the EU immediately halt Free Trade Agreement negotiations with the Mercosur bloc on the grounds of deteriorating human rights and environmental conditions in Brazil. Some Members States have also expressed concerns about the deal.

Despite the concerns, the Commission and most EU Member States maintain business as usual and want us to believe the deal will contribute to the environmental protection and the respect of human rights.

Voices from potentially affected peoples in Mercosur countries, communities and Indigenous Peoples have not been sufficiently heard. A massive mobilisation of civil society is needed both in the EU and Mercosur countries to alert decision makers and the public about the risks and reshape the deal to place the environment and human rights at its heart.

The briefing is also available in Portuguese.

Glossary

Domestic Advisory Group (DAG)	All new EU trade deals include a requirement that each signing Party establish one or more Domestic Advisory Groups (DAGs), to monitor implementation of either the TSD chapter or the entire trade agreement. The structure, membership, functioning and mandate of each DAG is specific to that agreement. For more see Fern’s briefing on the EU-Mercosur Agreement.
Non-tariff barrier (NTB)	NTBs can be anything which restricts trade, except for tariffs. It can include quotas and embargoes, but also environmental standards and safety requirements.
Quota	A government-imposed restriction that limits how much of a product can be imported or exported during am agreed timeframe. The EU uses quotas extensively to limit how much can be imported at a zero or low-tariff rate. Once the quota has been filled, future imports incur a higher tariff.
Sanctions	Trade sanctions are penalties imposed by one or more country(ies) on one or more other country(ies). Their purpose is to restrict or abolish trade, making it more difficult for the country(ies) receiving the sanctions to trade with the country(ies) imposing them. Sanctions can come in many forms, including quotas, tariffs, asset freezes and embargoes. In the context of the EU-Mercosur Agreement, sanctions generally refer to suspending the preferential trade terms introduced in the agreement.
Tariff	A tax applied to imports or exports.
Trade and Sustainable Development (TSD) chapter	All new trade deals with the EU contain a Trade and Sustainable Development chapter, which sets out commitments around environmental and labour standards. For more on these see Fern’s briefing on the EU-Mercosur Agreement.