Mercosur throws a spanner in the EU trade works

10 June 2021

Mercosur throws a spanner in the EU trade works

In part because of the controversial EU-Mercosur agreement, EU Trade ministers failed to reach conclusions on the new trade strategy, 20 May 2021. Member States intended to come to conclusions on the trade policy review, and on the next steps towards the ratification of the EU-Mercosur agreement. The failure to arrive at a consensus reflects a prominent divergence of views between Member States on the future direction of Europe’s common trade policy, in particular how far EU trade policy should support European autonomy and address the climate emergency.

On trade and climate, Member States disagreed on the follow up to the EU-Mercosur ratification process. Some countries, led by the Portuguese presidency of the Council, want a swift ratification, arguing that deforestation would be better addressed within the trade deal’s framework, than without. Others, led by France, want to see more commitments to protect forests in Brazil and make the conclusion of the Agreement conditional on these. Austria and the Netherlands were opposed to including any language on the EU-Mercosur agreement in the conclusions.

In effect, the EU-Mercosur deal has been put on ice. Further discussions may take place in the second half of 2021, but any progress on this will depend on Brazil’s efforts to reduce deforestation. Rates of fires and deforestation in Brazil in the upcoming months will be a litmus test, according to the Commission.

In a letter sent to Trade ministers ahead of the Council meeting, Observatorio da Clima reminded Member States that, since the signature of the deal in June 2019, Bolsonaro’s government has systematically dismantled environmental governance and human and land rights protections. “[T]he Brazilian regime has stepped up its anti-environmental policy, rolling back enforcement, harassing civil servants, cutting environmental agencies’ budgets, halting the collection of environmental fines.” Unless the Brazilian government changes its politics, the trade agreement is likely to remain quite a while in the freezer.

Category: EU-Mercosur Free Trade Agreement

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