Negotiations between the EU and Mercosur countries, initiated in 1999, resulted in a 2019 agreement in principle on the trade component. However, new negotiations took place in 2023 and 2024 regarding an additional instrument. To address internal opposition, the EU demanded additional commitments concerning adherence to the Paris Agreement and combating deforestation. Meanwhile, Brazil sought to better protect its industry (1). Ultimately, changes were made to the text’s content, though not to the agricultural chapter or the production’s sanitary and environmental standards.
A preliminary analysis of these new texts indicates that the clauses added at the EU’s request are in no way sufficient to effectively prevent the anticipated health and environmental impacts arising from the implementation of the trade agreement (I). Furthermore, some of the new provisions—such as the rebalancing mechanism for trade concessions—could prove highly detrimental, making it exceedingly difficult to adopt and effectively implement mirror measures within the EU or in Mercosur countries in the future (II).
Finally, this note examines the democratic deficit in the negotiation process and the upcoming political steps. The content of these final negotiations was kept secret until their conclusion, even from parliamentarians and member state governments. The European Commission’s communication on the negotiation outcomes appears overly “favorable,” even misleading on certain points (III).
In any case, the three red lines drawn by France in 2020 regarding the agreement remain relevant, and their violation should continue to justify a definitive rejection of the EU-Mercosur agreement.
1. Insufficient Environmental Guarantees
1.1 Paris Agreement as an Essential Element of the Agreement
The Paris Climate Agreement is now included as an essential clause in the EU-Mercosur agreement, as was done in the EU-UK and EU-New Zealand agreements.
While this addition is useful, it does not resolve contradictions between the trade agreement and the implementation of the Paris Agreement. As drafted, the essential clause applies only in cases where a party exits the Paris Agreement. Its wording is even weaker than that found in past agreements with the UK and New Zealand (2).
Moreover, essential clauses already exist for human rights (3), but they are rarely invoked, as key actors in trade policy often view them more as deterrents than actual enforcement mechanisms (4). The French panel of expert’s report on the EU-Mercosur agreement stresses that the effectiveness of essential human rights clauses “has been limited by the preference for incentives over the threat of sanctions” (5).
In the case of Mercosur, activation would be even more complicated because the agreement involves regional blocs. For example, if Argentina decided to leave the Paris Agreement, suspending the entire agreement seems politically unlikely, and a partial suspension affecting only Argentina would be technically challenging to implement.
Finally, the credibility of a clause on good faith implementation of the Paris Agreement is questionable. Hasn’t the Argentine government already shown bad faith by withdrawing its climate negotiators from COP 29 just three days after it began in November 2024? How credible, then, is this commitment?
Article XX
“2. The Parties shall cooperate, as appropriate, on trade-related climate change issues bilaterally, regionally, and in relevant international fora. In this context, recognizing the role of trade in contributing to the response to the urgent threat of climate change, each Party shall remain a party, in good faith, of the UNFCCC and its Paris Agreement.
3. The Parties agree that the second sentence of paragraph 2 constitutes an essential element of this Agreement.”
Article XY
“The suspension of this Agreement in the event of a violation of the essential element set out in Article XX [Paris] committed by a Signatory MERCOSUR State shall not entail the suspension of the operation of this Agreement in relation to the other Signatory MERCOSUR States.”
1.2 Deforestation
The agreement includes a vague and non-binding commitment to halt deforestation after 2030.
16. “Each Party reaffirms its relevant international commitments and shall implement measures, in accordance with its national laws and regulations, to prevent further deforestation and enhance efforts to stabilize or increase forest cover from 2030. In this context, the Parties should not weaken the levels of protection afforded in their environmental law.”
The annex to the “Trade and Sustainable Development” chapter also contains provisions that could weaken the implementation of the EU regulation on deforestation. The annex states that the EU commits to using information provided by Mercosur national authorities to verify compliance with requirements, including traceability. Additionally, the agreement’s existence will be considered when assessing Mercosur countries’ deforestation risk levels.
55. “Where a Party’s law provides for verification of compliance of an imported product with the relevant laws of another Party, the Parties acknowledge that the authorities of a Party are best placed to assess compliance with the law of that Party. Hence, when assessing compliance with the law of a Party, the Parties shall use the information provided by the latter’s authorities.
56. With regard to the implementation of sustainability measures affecting trade and the placement on the market related to the protection of wooded ecosystems and where EU law so allows:
(a) The EU recognizes that this Agreement and actions taken to implement commitments thereunder shall be favorably considered, among other criteria, in the risk classification of countries. (b) Documentation, licenses, information, and data from certification schemes and traceability and monitoring systems officially recognized, registered, or identified by Mercosur countries shall be used as a source by the relevant authorities in the EU for the purpose of verifying compliance of products covered by such measures with traceability requirements placed on the EU market. (c) In case of a divergence between the documentation, licenses, information, and data from certification schemes and traceability and monitoring systems officially recognized, registered, or identified by Mercosur countries, and the information being used by the relevant authorities in the EU, the latter shall, upon request, promptly consider information and clarifications provided by Mercosur countries.”
There is no binding sanction mechanism for violations of the sustainable development chapter’s provisions, such as on social rights, biodiversity, or deforestation. On this point, the agreement does not align with the EU’s recent commitments to integrating sustainable development into trade policy (6).
1.3 No Mirror measures or clauses
Contrary to repeated claims by the French government, no formal proposal for introducing mirror clauses was tabled.
“Mirror measures were not part of these negotiations with Mercosur,” stated Olof Gill, spokesperson for the European Commission on international trade, on December 9.
2. Rebalancing Mechanism: An Anti-Mirror Measure Tool
At Mercosur’s request, the agreement allows for the dispute settlement mechanism to be activated to seek compensation when one party’s unilateral measures affect the use of trade concessions agreed between the two blocs. This means that the other party can initiate mediation, escalate to a dispute settlement panel, and take corrective measures.
Article XX.1 Objective
“The objective of this Chapter is to establish an effective and efficient mechanism to: (b) preserve the balance of concessions accorded by Part X of the Agreement, when applicable.”
Article XX.4
“The provisions of this Chapter apply with respect to any dispute: (b) concerning an allegation by a party that a measure applied by the other party nullifies or substantially impairs any benefit accruing to it under the covered provisions in a manner adversely affecting trade between the parties, whether or not such measure conflicts with the provisions of Part X of the Agreement, except if otherwise expressly provided.”
The scope of this clause is interpreted differently by the parties. European officials argue that it is based on the WTO’s non-violation complaint (7) and does not apply to regulations already adopted, such as the Carbon Border Adjustment Mechanism (CBAM) or the deforestation regulation (EUDR), nor to measures foreseeable by the time negotiations are concluded.
However, the newly added definition of “measure” appears to include legislation not yet implemented at the conclusion of negotiations, as well as their implementing acts.
Article X.3 General Definitions
“Unless otherwise specified, for the purposes of this Agreement: … (j) ‘measure’ includes any measure by a Party, whether in the form of a law, regulation, rule, procedure, decision, administrative action, requirement, or practice. For greater certainty, the term ‘measure’ includes omissions and legislation that has not been fully implemented at the conclusion of the negotiations of this Agreement as well as its implementing acts.”
Clearly, Mercosur negotiators have a different interpretation than their European counterparts.
7. Setting up a Rebalancing Mechanism:
“An unprecedented mechanism has now been established preventing unilateral measures by one of the Parties from jeopardizing the balance established in the Agreement, as such measures have the potential to negatively affect the negotiated trade concessions and breach the balance of the agreed outcome. After the 2019 ‘political agreement,’ the European Union adopted legislation that, depending on its implementation, could disrupt the balance reflected in the 2019 understanding on issues not renegotiated in the phase that began in 2023. This includes, for example, EU quotas for Mercosur meat exports, which were not reopened in 2023 negotiations.
Parties established that arbitration will determine whether there was a breach of commitments and to what extent. If trade is restricted, compensation (market opening) must be offered. If no agreement is reached, temporary remedies (e.g., suspension of Agreement benefits) may be adopted.”
Such a mechanism could enable Mercosur countries, which have consistently opposed the effective implementation of mirror measures formally adopted by the EU (e.g., bans on imports of meat treated with growth-promoting antibiotics, the deforestation regulation (8), and the ban on agricultural products containing certain neonicotinoids (9)), to exert further pressure. If implemented, Mercosur countries could demand additional trade concessions as compensation, even if these unilateral measures are deemed WTO-compliant.
Furthermore, this would serve as a powerful regulatory freeze tool, impeding future measures on either side (e.g., phasing out internal combustion engine vehicles).
3. Opacity and Democratic Deficit
3.1 Opacity of Negotiations
The initial negotiations were already marked by significant opacity (e.g., non-publication of the negotiating mandate (10), Commission proposals, and draft texts (11) and violations of the Commission’s commitments, which the EU Ombudsman criticized (e.g., delayed publication of the sustainability impact assessment after negotiations had concluded (12).
This opacity persisted in the 2023 and 2024 discussions. Member states, European parliamentarians, and stakeholders were not given timely opportunities to contribute to ongoing proposals. On December 6, 2024, Sabine Weyand, the European Commission’s Director-General for Trade, told journalists that member states could not yet oppose the agreement because they were unaware of the changes made to the text.
Such practices are increasingly difficult to justify democratically. For agreements encompassing broader public policy domains, this approach also deprives negotiators of essential expertise contributions.
3.2 Misinformation
In preparing this note, several contradictions were identified between the European Commission’s FAQ and the exact wording of clauses in the final text. This excessively “favorable” presentation of negotiation outcomes resembles misinformation inconsistent with democratic principles. For example, the FAQ states: “All food products must comply with EU sanitary and phytosanitary standards. European rules apply uniformly to all products marketed in the EU, whether produced locally or imported. Our robust control system ensures compliance with EU rules.”