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EU Mercosur deal : the EU ombusdman opens an inquiry

Mathilde Dupré, 10 July 2020

[English] [français]

The European Ombudsman has opened an inquiry into the EU Commission’s trade agreement with the ‘Mercosur’. This follows a complaint from several NGOs alleging that the Commission ignored its legal obligation to ensure the trade deal would not lead to social, economic, environmental degradation and human rights violations.

In June 2020, 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 submitted a formal complaint outlining the Commission’s failure in conducting the trade negotiations without fully considering the potential social, economic or environmental impacts. Now, the Commission will have to answer to its conduct, after the Ombudsman this week announced that the complaint is admissible.

We welcome the Ombudsman’s inquiry into the trade deal between the European Union and Mercosur countries, which was concluded without seriously considering its environmental and social impacts, and without adequately ensuring civil society participation. We look forward to hearing the Commission’s reply to our concerns.”

In June last year, the Commission announced that after 20 years of negotiations, it had reached a trade agreement with Mercosur countries – Argentina, Brazil, Paraguay and Uruguay. Combined, this group of countries is the fifth largest economy outside the EU, with an annual GDP of EUR 2.2. trillion.

On 18 June 2020, the European Union and Mercosur concluded negotiations on the Political Dialogue and Cooperation - the other two pillars that form the Mercosur Association Agreement with the trade deal.

In the Ombudsman complaint, NGOs highlighted that the Commission concluded the trade deal with only the first phase of the sustainability impact assessment process (out of three) completed. On Wednesday the Commission finally published the draft final report of the sustainability impact assessment. The Commission will hold a Civil Society Dialogue on 22 July.

The fact that the draft final report of the sustainability impact assessment was only published this week, more than a year after the conclusion of the trade negotiations, calls into question the Commission’s decision-making process. We need the Commission to explain to what extent this vitally important environmental assessment actually fed into the Commission’s policy choices during the negotiations.

 With over 260 million consumers and an annual GDP of 2.2 trillion euros, the Mercosur is the fifth largest economy outside the EU.
 If the process is successful, the trade agreement will be the largest concluded by the EU for the population concerned (780 million people) and one of the largest in terms of the volume of trade covered (40 to 45 billion euros of imports and exports).
 The deal should encourage exports by European companies in the automotive, chemical, pharmaceutical and clothing sectors and offer them increased access to the public markets of Mercosur states. In exchange, Mercosur-based companies would benefit, in particular in the agri-food industry, from larger outlets on the European market for their production, including beef, poultry, sugar/ethanol, etc.

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.

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