EU-Mercosur trade agreement negotiations have a long and fraught history. Now, as the European Commission and partner countries (Brazil, Paraguay, Argentina and Uruguay) take up discussions for a “joint instrument” that they hope will somehow make the trade agreement palatable, it appears that the Mercosur deal has not yet run out of ways to upset everyone involved.
In June 2019, the European Union (EU) and Mercosur partners agreed the content of the deal over which they had been haggling, off and on, for more than 20 years.
In the context of rising illegal deforestation and violence in Brazil under former president Jair Bolsonaro’s administration, and his openly antagonistic approach to Indigenous Peoples, however, ratification of the deal was halted (FW 256).
For its part, the Commission was admonished with a finding of maladministration from the EU Ombudsman (March 2021) for closing the deal prior to the completion of a sustainability impact assessment, and its consequent failure to properly consider social and environmental issues (FW 264).
Since Luiz Inácio Lula da Silva’s election as President of Brazil in October 2022, however, promoters of the trade agreement are strongly pushing its ratification.
And yet the complaints are many.
In the EU, the main opponents (Austria, Belgium, France, the Netherlands) have focused on the deal’s unaddressed sustainability issues and on fears that the deal could put their agricultural sectors at risk.
In Mercosur countries, and most specifically Brazil, the deal is viewed as unbalanced, especially regarding the liberalisation of public procurements and the effects it could have on domestic industries. However, Lula and the Brazilian government have yet to take an official position. Although he has set clear objectives to tackle deforestation, achieve full employment and eradicate hunger, Lula does not hold the majority in Congress and will need its support (FW 279); the agreement could become a bargaining chip to achieve his policies, whereas he could trade off support to the trade deal for a congress majority to his policy priorities.
Talks for the new “joint instrument” are not off to a good start
Given wide-ranging concerns about the deal’s lack of sustainability, European policy makers focused on “pre-ratification conditionalities” swiftly after the 2019 text was agreed. Since Brazil’s general election, the Commission drew up a new “joint instrument” and restarted discussions early March 2023.
But the joint instrument was developed without any consultation of civil society organisations, who only recently managed to see a leaked copy. The text offers yet another example of why additional declarations historically have been criticised for their lack of teeth:
Meaningful enforcement provisions are still unacceptably absent; as before, the Trade and Sustainable Development chapter does not fall within the scope of the Agreement’s sanction-based dispute settlement provisions.
No consultation of civil society or local communities took place.
Its commitments on the environment and climate are more precise, but only aspirational and not linked to country-specific priorities.
It foresees developing a roadmap to meet those commitments only after ratification, at which point any potential for leverage will have been lost.
It proposes a flawed interim target to ‘reduce’ deforestation by “at least 50 per cent from current levels by 2025”. According to Rainforest Foundation Norway, this would violate Brazil’s own, stricter law’s target on reducing deforestation. The Commission’s proposed interim target would in effect allow a 47 per cent increase of Brazil’s 2020 deforestation target, according to the NGO Rainforest Foundation Norway.
Mercosur countries’ reactions to the text were extremely critical, ranging from “a disaster” (Argentinian sources) to “tough and unbalanced” (Brazilian sources). Mercosur governments rejected the deforestation interim target.
Negotiators have set the agenda for the coming weeks, and hope to find political compromise by the CELAC and the EU summit in July 2023, during the Spanish Council Presidency; finalising the deal is a top priority for Spain.
Local community representatives from Paraguay, Argentina and Brazil conveyed their concerns about the deal to EU policymakers early March, during a tour organised by Fern and Brazilian Partners Amazon Environmental Research Institute (IPAM) and Instituto Socioambiental (ISA). They objected to their lack of consultation, and insisted that civil society’s meaningful participation is vital to ensure forest and people are at the core of the deal. Their detailed views can be found in Fern and partners recent briefing “Not Just about Trade”.
Category: Forest Watch