Negotiations between the EU and Mercosur countries, which began in 1999, reached an agreement in principle on trade in 2019. Further negotiations took place in 2023 and 2024, and the final text was published in December 2024. In this note, Canopée and the Veblen Institute take stock of the impact of the implementation of the agreement on deforestation, as well as European regulations on the fight against deforestation. The note also analyses the relevance of the proposed safeguards.

• The EU-Mercosur agreement will lead to massive deforestation.

While Mercosur countries are among those most affected by deforestation, the reduction of over 90% in customs duties, the creation of new tariff quotas, and the abolition of export taxes provided for in the Agreement will increase exports of beef and pork, poultry, sugar, bioethanol, and soy, consequently leading to deforestation. The note points out that the agreement could lead to an initial deforestation of 700,000 hectares for beef alone, followed by continued degradation due to loss of land productivity.

• The EU-Mercosur agreement threatens the European regulation against deforestation

The annex to the trade and development chapter of the agreement limits the controls provided for in the European Anti-Deforestation Regulation (EUDR). It compromises the independence of the control authorities.
In addition, the EU undertakes to take account of the existence of the EU/Mercosur agreement when assessing the risk of deforestation in Mercosur countries. However, given the weak guarantees offered by the agreement, it is clear that it is in no way an indicator of a low risk of deforestation.
Finally, the mechanism for rebalancing concessions in the Agreement could neutralise the EUDR. This mechanism could dissuade the European authorities from fully applying the European regulation, which will come into force in December 2025. Based on data from 2020 to 2022, the risk posed by the rebalancing mechanism on deforestation amounts to almost 69,000 hectares per year. This figure is probably underestimated because it does not consider indirect deforestation and does not include the risk of deforestation linked to wood imports. This deforestation would result in the emission of at least 11.8 million tonnes of CO2 per year.

• A semblance of safeguards

The commitment by States “to implement measures, in accordance with its national laws and regulations, to prevent further deforestation and to enhance efforts to stabilise or increase forest cover by 2030” is very limited in scope. This is not least because countries are only committing themselves—in a non-binding way—to enforcing their laws, even though the impact of deforestation is the same whether it is legal or not.

• There’s still time to reject this agreement.

The agreement must be ratified, and the complete ratification procedure to be proposed by the European Commission is not yet known. It could split the political and commercial components of the agreement, thereby circumventing any vetoes from Member States. But regardless of the procedure chosen, the agreement could be blocked if it does not receive the approval of the Council or the European Parliament. Everything will, therefore, depend on the votes of the Member States and MEPs.