As the political divide over the Mercosur trade deal widens, its advocates argue that shelving it will damage the EU’s credibility. The opposite is true, writes Perrine Fournier.
Perrine Fournier is a trade a forest campaigner at the forests and rights NGO, Fern.
Controversy has stalked the European Union’s (EU) largest ever trade deal since it was agreed in June 2019.
The free trade agreement that the EU and the South American Mercosur bloc of Brazil, Argentina, Paraguay and Uruguay, announced in principle after 20 years of stop-start negotiations, was hailed as a landmark in by policymakers on both sides. The then European Commissioner, Jean-Claude Juncker, called it a “truly historic moment”.
But signing the Mercosur agreement in its present form has become a litmus test for the EU’s commitments to protect the world’s forests.
Around 20 per cent of soy and 17 per cent of beef exports to the EU from the Cerrado and Amazon regions of Brazil are linked to illegal deforestation, and soy and beef production are known to be driving land grabs, violence against Indigenous Peoples and slave labour. Fern and many others see this deal as a potential disaster for the planet.
At the end of 2020, Portugal and eight other EU Member States wrote to the EU Trade Commissioner, Valdis Dombrovskis, arguing that “not signing and ratifying the EU-Mercosur Agreement will not only affect the EU’s credibility as a negotiating and geopolitical partner, but will also strengthen other competitors’ position in the region.”
EU credibility at stake
In truth, signing the deal will dent the EU’s credibility far more than not doing so.
It will jeopardise the EU’s ambition to be a global leader in the fight against deforestation, climate change and biodiversity loss, while undermining its commitments to defend human rights in its trading partnerships.
It will also damage the EU’s credibility in the eyes of civil society in Mercosur countries, and progressive members of Brazil’s Congress where many hope that EU resistance to the deal in its present form, combined with Biden‘s commitments on climate and the Amazon, will restrain President Jair Bolsonaro from continuing along his path of tearing up Brazil’s safeguards for the environment and Indigenous rights.
A YouGov poll published in September found three-quarters of Europeans would want the deal to be scrapped if it would lead to deforestation and environmental damage. The evidence that it would is becoming overwhelming.
Concluding a trade deal without requiring soy and beef importers to know that their product hasn’t caused deforestation has become an anachronism, as more and more companies are trying to clean their supply chains from deforestation.
In December, 160 groups of international retailers, food groups and investors including Tesco, McDonald’s, Unilever and Lidl called on soybean traders to divest from commodities linked to deforestation in Brazil’s Cerrado region. Even a major Chinese trader, Cofco, has committed to establish traceability for the soybeans it buys directly from farmers in Brazil.
The EU should level the playing field and incentivise Brazil to enforce its laws and improve its regulatory frameworks to protect forests and human rights. The EU should do this at the right moment, when there is leverage: during negotiations, not when the deal is signed and in force.
EU member states blocking the deal must stay firm
Trade Commissioner Dombrovskis and Mercosur countries have agreed to negotiate additional commitments on forests and climate, in order to head off criticisms and save the deal.
But that is unlikely to make a difference.
The EU-Canada (CETA) trade deal adopted an additional declaration which delivered no results despite including wording to say that Parties had to review Trade and Sustainable Development provisions to achieve their “effective enforceability”.
Stephanie Ghislain, president of the EU Domestic Advisory Group under CETA said: “In the context of CETA, the EU considers that this additional declaration does not commit the Parties to amend the agreement, only to review whether provisions are working well.
The Commission carried out such an assessment last year, and concluded that the provisions were adequate despite many concerns raised by civil society about their lack of enforceability.”
The EU and Brazil are already party to numerous commitments to stop deforestation, including in the UN’s Sustainable Development Goals. Instead of more commitments, the Mercosur negotiations should be re-opened and civil society from both sides of the Atlantic given a seat at the table.
All parties can then work together to tackle the deal’s structural flaws, in particular by making market access conditional on respect for internationally agreed social, environmental and human rights commitments.
This would create a precedent for future EU trade agreements. It would bolster the EU’s claim to being the global leader in the fight against deforestation. And, most urgently, it would help protect the Amazon and other ecologically precious biomes in South America, and the rights of those who live there.
The ratification process for the Mercosur deal is expected to start after the French regional elections in spring, and with political manoeuvring against its opponents now in full swing, those unwilling to sacrifice forests and rights on the altar of trade, must make their voices heard once more.