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The free trade agreement between EU and MERCOSUR is going to increase the amount of forest risk commodities such as beef and soy imported in Europe.

The free trade agreement between European Union and Mercosur countries could have serious consequences on the destruction of the Amazon and other South American tropical forests, according to different voices from institutions, politics and civil society, who in recent weeks criticized the agreement, that is still waiting for the ratification by all the European governments. “There is a growing feeling among the public opinion that trade must be made differently“, says Perrine Fournier, head of trade for Fern, a NGO based in Bruxelles that has been working for years in assessing the links between European imports of raw materials and deforestation. “The positions against the Mercosur are coming from different socil movements and different political forces as well, and the motivations are quite different. But they all reflect the fact that trade has to change if you want to deal with climate change, with the loss of biodiversity and also with this pandemics”.

About the Mercosur agreement

The free trade agreement concerns the European Union and the countries of the Common Market of South America, Argentina, Brazil, Paraguay and Uruguay, which together represent a GDP of 2.2 trillion euros. The agreement was closed on June 28, 2019 after twenty years of negotiations, and today it is awaiting ratification by the Member States, which will have to approve it unanimously. In recent months, however, after the fires of 2019 in the Amazon and the Covid-19 pandemic, criticisms of the treaty have arisen from many sides, worried that it will boost the exchange of raw materials related to deforestation, in particular beef, soy and sugar.

“The Bolsonaro effect has aroused great concern,” says Fournier. “There are many subjects who would be in favor of trade, but not with Bolsonaro. I think the fires in the Amazon last year, which are so evidently related to the deregulation of many laws in Brazil, played a clear role”.

Arising criticism

The first attacks to the Mercosur treaty date back to August 2019, the month of fires in Brazil, when French President Emmanuel Macron said that “under these conditions, France opposes the agreement”. In September, Irish President Taoiseach Varadkar also threatened to stop the treaty. In January, the Austrian parliament asked the government to oppose the agreement. In Germany Angela Merkel has repeatedly defended the agreement, claiming that “a stop to the treaty is not the right response” to the fires in Brazil, but in March 2020 the German ambassador to Brazil said that the agreement would enter into force only if Brazil had returned to deforestation levels in 2017.

In recent weeks, criticisms have multiplied. On May 26, the Agriculture Commission of the European Parliament expressed a negative opinion about Mercosur, asking for the reopening of the negotiations. On June 3, a resolution from the Dutch parliament gave the government a mandate to oppose the EU-Mercosur agreement. Finally, in recent days, a consortium of non-governmental organizations for the protection of the environment and human rights presented a complaint to the European Ombudsman, claiming that the European Commission would have committed an offense by signing the agreement without having first made an adequate social, environmental and economic impact assessment. “Commercial agreements should only be approved if they have a positive impact and, above all, no negative environmental or social fallout,” says Amandine Van Den Berghe, attorney for ClientEarth, one of the organizations that filed the lawsuit. According to Van Den Berghe, the Commission was to publish a sustainability assessment before the end of the negotiations, but it only published a draft four months after the agreement was closed, making the document useless and any civil society intervention impossible.

A football field every 6 seconds

According to data from the University of Maryland published on Global Forest Watch, in 2019 the tropical areas of the planet have lost 11.9 million hectares of forest surface, of which 3.8 million primary forests: the equivalent of a football field every 6 seconds. This destruction produced 1.8 gigatonnes of carbon dioxide, equivalent to the emissions of 400 million cars in a year. Brazil alone contributed to the loss of one third of the world’s primary tropical forests, in particular due to the conversion of land for agricultural use.

“Deforestation has continued to increase in the Amazon, Brazil has reached the highest levels of deforestation in the past 10 years. It’s no surprise, given that the government of Bolsonaro has reduced environmental protection, undoing years of policy”, says Glenn Hurowitz, director of the NGO Mighty Earth. “It is a real crisis, and we have reached this point because companies like Cargill or JBS find buyers in Europe and in other countries for deforestation products, in particular those related to the meat industry, pastures or soybeans for feed production”.

Mercosur expected impact

On October 4, 2019, the European Commission published a draft assessment on the sustainability of the agreement with the Mercosur countries, according to which the treaty will produce “positive social effects, reducing inequalities”, while “the increase in imports into the agri-food sector will have a marginal effect on EU production “. NGOs have widely criticized this document, because it was published months after the closure of the treaty and because it was “based on obsolete data and very weak analyzes”. According to a Friends of the Earth report, the agreement will produce a substantial increase in imports of beef, soybeans and brown sugar into Europe. Other independent studies mention an increase in soybean imports between 2.5 and 5%, and in some cases also highlight a likely increase in EU imports of pork and chicken, which are also related to soybeans through feed. All studies associate this increase in imports with an increase in deforested areas, ranging from tens of thousands to a few hundred thousand hectares per year. A May 2020 study commissioned by the European Commission’s Directorate-General for the Environment in reference to Mercosur states that the treaty has a section that concerns sustainable development, but that the parties “cannot incur sanctions of any kind, unless the violations constitute arbitrary or unjustified discrimination or constrain trade in some way”.

“The deal includes some predictions about sustainability,” says Fern’s Perrine Fournier. “But they are very weak indications, because the commitments are very vague and it is impossible to monitor compliance. And then there is no sanction mechanism for violations”. According to Fournier, “when it comes to forests, there is a commitment to respect sustainable management, but it only concerns legal timber, while there is nothing on the other agricultural commodities that cause deforestation, there are no specific measures for soybeans or beef”.

“An interesting solution has been put forward by the governments of France and the Netherlands, which have proposed linking tariffs with sustainability criteria in free trade agreements,” adds Fournier. “Negotiations between countries should define which products are sustainable, which are the criteria, and consequently define the tariffs, placing higher tariffs on less sustainable products and lower tariffs on more sustainable ones. So it would also be possible to connect the issue of the impact of emissions, also considering transport, given that there is a lot of debate on the carbon tax. These are interesting solutions that should be investigated “.

The German semester

The German presidency of the European Union began on 1 July 2020. The Merkel government in the six months presidency planning document writes: “Closing free trade and investment protection agreements is essential to diversify and secure the supply of raw materials that guarantee our growth. This is why we are aiming for rapid developments to finalize the agreement with Mercosur “.

According to Martina Borghi, head of forests for Greenpeace Italy: “Germany has every interest in pushing Mercosur. For them, Mercosur is very important, because it allows them to sell cars in Latin America, where this industry is going downhill, and to do so at different prices from today, because so far there were no facilities they would have liked. “

 

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