EU Commission reprimanded for failure to consider environmental, social impacts of South American trade deal

Environmental and human rights organisations have welcomed today’s European Ombudsman finding of maladministration by the Commission. It found that the Commission failed to complete a timely assessment of the social and environmental impact of the trade deal between the EU and the Mercosur bloc of South American countries.

EU trade negotiations are supposed to be informed by a ‘sustainability impact assessment’, to ensure they are based on evidence and that the resulting agreements respect human rights and high economic, social and environmental standards.

The Ombudsman found that Commission’s failure to complete this assessment before completing negotiations between the EU and Mercosur countries Argentina, Brazil, Paraguay and Uruguay constituted maladministration.

These findings follow an inquiry launched after a formal complaint in 2020 by environmental and human rights organisations ClientEarth, Fern, Veblen Institute, La Fondation Nicolas Hulot pour la Nature et l’Homme, and International Federation for Human Rights.

ClientEarth Trade and Environment Lawyer Amandine Van Den Berghe said:

“With this decision, it’s clear that the Commission attached little consideration to non-economic factors when it negotiated its trade deal with Mercosur countries. But that’s not all.

“Almost two years after the end of the negotiations, we are still waiting for the final report on the sustainability impact assessment, and for the Commission to explain the results.”

Faced with criticism by EU governments over the environmental impact of the deal, and threats that countries will not ratify it, the Commission is currently negotiating an additional instrument to address concerns including climate impacts and deforestation.

“We’re now waiting while the Commission discusses this new instrument behind closed doors, without any opportunity for civil society or the European Parliament to meaningfully engage. This deeply erodes public trust in the process,” Van Den Berghe added.

Since formal negotiations over the EU-Mercosur agreement have concluded, the Ombudsman did not issue any recommendations from the inquiry. They did urge the Commission to ensure the sustainability assessment is finalised before the end of negotiations.

Fern Trade and Forest Campaigner Perrine Fournier said:

“This maladministration is a failure of moral, as well as legal duty. Multiple impact assessments from Member States and civil society have shown that the deal will only increase Europeans’ vast consumption of beef, soy, ethanol and other agricultural goods, intensifying pressure on forests bordering the lands of Indigenous communities.

Whatever additional instruments the Commission and Member States propose, they must be informed by the latest evidence.”

The organisations conclude that it is high time for the EU Commission to learn from past mistakes. If the EU does not change the way it conducts its trade policy, it will be at best paying lip service to its EU Treaty obligations to foster sustainable development.

Sara Lickel, Trade Policy Officer from Veblen Institute, said: “European Treaties provide rules for setting up trade policy and trade agreements: the environmental, social and human rights impacts need to be assessed and those results need to be taken into account before concluding negotiation.”

Notes to editor

• Combined, the Mercosur bloc of South American countries is the fifth largest economy outside the EU – with an annual GDP of EUR 2.2 trillion.
   

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Timeline

• 1999: Talks between the EU and Mercosur countries began.
• 2009: First sustainability impact assessment published.
• 2010: Negotiations restarted following a suspension of talks. Negotiations gained
• new impetus in 2016.
• 24 January 2018: consultants issued the Sustainability Impact Assessment inception (SIA) report, followed by stakeholder consultations.
• April 2018: European and international NGOs sent a joint open letter, calling on the Commission to ensure “the ongoing sustainability and human rights impact assessments of the EU-Mercosur free trade agreement are conducted in a comprehensive and participatory way and that their findings are taken into account before concluding the negotiations, according to the rules set out in the Commission’s handbook for trade sustainability impact assessments and article 21 of the Treaty on the European Union”:
• 28 June 2019: EU and Mercosur announced political agreement on the EU-Mercosur Trade Agreement, while the new SIA was still ongoing and the interim report had not even been published.
• July 2019: in a Q&A, the Commission explained that “Work is currently underway on a new a Trade Sustainability Impact Assessment (SIA) evaluating the economic, social, environmental and human rights impact of a trade agreement between the EU and Mercosur. An independent contractor is carrying out the study.”
• 15 July 2019: Organisation of a Civil Society Dialogue by the Commission to debrief civil society organisations on the state of play and to exchange views on the topic.
• 3 October 2019: publication of the SIA draft interim report (the “Draft Interim Report”) followed by stakeholder consultations.
• November 2019: contributions from the civil society on the “Draft Interim Report”
• 9 February 2020: publication of the final interim report (the “Interim Report”), with a similar assessment as in the draft interim report.
• 20 July 2020: publication of the SIA draft report, will be presented at a civil society dialogue on 22 July 2020.

Categorias: Press Releases, EU-Mercosur Free Trade Agreement