After 20 years of negotiations, the European Union and the Mercosur member countries (Argentina, Brazil, Paraguay and Uruguay) announced the finalisation of a trade agreement on 28 June 2019. This agreement is an integral part of a broader association agreement, including a component on political dialogue and cooperation between the two regions, finalised on 18 June 2020. However, the ratification of this instrument has been suspended following the opposition expressed by several Member States, notably because of the environmental impacts it could generate.
For several months now, many actors in Europe are calling for the process to be relaunched, particularly in view of the geopolitical crisis, which, in their view, would argue for the ratification of as many new trade agreements as possible with various partner countries. And the political changeover in Brazil at the beginning of 2023 could well speed things up.
But the draft EU/Mercosur trade agreement finalized in June 2019 cannot be ratified as it stands. The foundations of this text often presented as a "cars for cows" deal are incompatible with the European Green Deal’s objectives.
Its implementation will lead to increased trade flows of goods inconsistent with the goals of combating climate change and protecting biodiversity. Its environmental impact is likely to be significant due to the substantial increase in agricultural production that it will induce in the Mercosur countries. Without preventive measures, this will dramatically affect deforestation, greenhouse gas emissions, phytosanitary products use and ecosystem destruction.
In their joint report, the FNH and the Veblen Institute warned in 2019 on the terrible impacts of the Agreement on several levels. These fears (also shared by Interbev) are in line with the conclusions of the Commission of Independent Experts mandated by the French Government delivered in September 2020. These conclusions emphasize that the economic gains expected by the Agreement will in no way make it possible to offset its costs.
Following the publication of the Commission’s report, France set three conditions for the acceptability of the Agreement:
- An association agreement with Mercosur cannot in any way lead to an increase in imported deforestation within the European Union.
- The public policies of the Mercosur countries should be entirely in line with their commitments under the Paris Agreement, which are an integral part of the association agreement.
- Imported agri-food products benefiting from preferential access to the European Union market should comply, de jure and de facto, with the health and environmental standards of the European Union.
These red lines remain largely relevant as long as the content of the Agreement is not revised, as shown in this note from the Veblen Institute, the FNH and Interbev.