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Beyond the Bolsonaro policy, it is the very content of the EU-Mercosur agreement that promises an environmental disaster

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Veblen | 17 September 2020

Beyond the Bolsonaro policy, it is the very content of the EU-Mercosur agreement that promises an environmental disaster

by Mathilde Dupré

The commission of experts has spoken: an annual increase in deforestation of 5% for 6 years but in reality of 25% according to the figure retained by the Veblen Institute and the FNH, facilitated entry into the European market of foodstuffs produced with pesticides banned in the EU, risk of weakening European environmental and health standards for very low economic gains, out of all proportion to the damage to the climate and biodiversity ... On these bases, and whoever the Brazilian president in office may be, France must block this agreement.

As the Commission of Experts in charge of assessing the ecological impacts of the draft trade agreement between the EU and the Mercosur countries is due to issue its report on Friday 18 September, the Veblen Institute and the Nicolas Hulot Foundation solemnly call on France to demand its outright abandonment. The committee’s conclusions are indeed irrevocable: beyond Jair Bolsonaro’s policy, it is the very nature of the draft agreement to promote Mercosur meat exports in exchange for European cars, machinery and chemicals, without any environmental obligations, that will lead to a disaster for the climate and biodiversity.

European countries are already responsible for more than a third of global deforestation linked to trade in agricultural products. Just because of the increase in beef production foreseen in the agreement, deforestation in Mercosur could increase by at least 25% per year over the next six years. Indeed, the 5% figure put forward by the Commission only takes into account the area of deforestation necessary to raise the piece of sirloin (exported to Europe) and not the whole beast. And despite the EU ban on 27% of the 190 active ingredients authorised in Brazil, the agreement will further facilitate the entry of agricultural products treated with these banned pesticides into the EU market. These conclusions are broadly in line with the analyses carried out for several years by the Veblen Institute and the Nicolas Hulot Foundation.

If a trade agreement between these two regions of the world is to see the light of day, it must be rethought and built on completely different bases, compatible with the European Green Deal and the planetary boundaries. In particular, the reduction of trade barriers must be strictly conditional on compliance with a number of strict health and environmental criteria, as suggested in the report. And all provisions that could lead to the weakening of existing or developing standards must be removed.

 The Ambec Committee report in a nutshell :

1. Deforestation and biodiversity :

  • The main figure put forward in the summary evokes an acceleration in deforestation of 5% per year for 6 years, due solely to the increase in beef exports generated by the Agreement. This acceleration would already be a disaster for the climate and biodiversity, but the reality could be even worse.

Explanation: The report estimates the increase in beef exports generated by the Agreement at 53,000 tonnes per year and specifies that there is also an estimate high at 98,000 tonnes, but that there is no consensus within the Commission. According to the low consensus assumption, this represents an increase in production area of about 3.6 million hectares. But the report also specifies that the meat exported will be mainly the so-called "noble" cuts, which represent 19.5% of a typical young Mercosur cattle carcass, and that the rest of the meat produced will be valorised on other, booming markets, particularly China. Most of the data therefore suggests that only a theoretical surface area of 700,000 hectares should be retained, i.e. 19.6% of the total corresponding to the "noble" cuts of the animals thus raised, a way of minimising the real impact on the environment.

  • Taking into account the total surface area used to produce the head of cattle needed to produce the 53,000 additional tonnes of beef exported to the EU, the acceleration of deforestation is rather 25% per year for 6 years.
  • If one also takes into account the high hypothesis of meat exports, on which there is no consensus within the Commission (98,000 additional tonnes exported), the acceleration of deforestation could reach 45% per year for 6 years due to the total increase in the number of livestock heads.
  • It should be noted that this estimate does not take into account the additional areas of crops needed to feed beef, poultry and possibly (specifically indirectly for the latter) sugar cane. In other words, deforestation related to soybean or sugar cane is not included in the calculations.

2. Climate and GHG emissions

  • The emissions estimated from the data of the impact study commissioned by the European Commission are between 4.7 and 6.8 million tonnes of CO2 equivalent depending on the assessment scenario. However, the experts Commission points out that this study does not take into account freight transport or deforestation.
  • Deforestation caused by the increase in meat exports alone would generate a climatic impact of the agreement that is out of all proportion to the figures quoted above. Emissions linked to deforestation of 20% (which corresponds to the theoritical share devoted to the production of « noble cuts ») of the total surface area needed for the production of additional beef could amount to between 121 and 471 MteqCo2. Taking into account the total surface area needed, the figures would be much higher still. The Ambec Commission concludes from this that the expected economic gains do not compensate for the climate costs (estimated in terms of a flat-rate carbon value of 250 or 50 euro per tonne). Even if it would be possible to offset irreversible environmental degradation with economic benefits, this conclusion is therefore indisputable.
  • The Ambec Commission points out that for one kilo of beef produced in South America, greenhouse gas emissions are four times higher than for one kilo produced in Europe (78 kgeqCO2 in Latin America compared with emissions of between 14 and 18 in Europe).

3) Diverging sanitary standards

  • It is made clear that products entering the EU will not be required to meet EU production standards but only the existing rules for imported products (import standards).
  • This will give a comparative advantage to Mercosur producers, since certain practices are prohibited in the EU but allowed in these countries. For example, with regard to Brazil, the report mentions divergent rules on animal meal, antibiotics used as growth promoters or animal welfare (notably iron marking), but also on pesticides: 27% of the 190 active ingredients authorised in Brazil are banned in the EU, and above all the maximum residue limits are often much higher in Brazil (10 times higher on glyphosate - sugar cane, or 400 times higher for the use of malathion on beans (products banned in the EU).

4) Risk of weakening European standards

  • The report repeatedly states that the agreement as such does not change countries’ sanitary provisions, but that the provisions it contains may weaken environmental and health standards.
  • In particular, it notes that the recognition of the precautionary principle remains incomplete, which reflects ambiguities on both sides about its applicability, and that the conditions for invoking it are ultimately more restrictive than in WTO law.
  • Finally, he points out that the Mercosur countries are very active in challenging European regulations that may have an impact on trade between the two regions and that the agreement could give them new tools to put pressure on the EU (e.g.: "Attempts by Mercosur to soften the EU’s positions are therefore to be feared, for example in the field of biotechnology. It should be recalled that Canada had tried to do so in the framework of the dialogue established by CETA. » p 111)

5) Insufficient health controls, which could be further reduced

  • The report lists shortcomings and gaps in health controls identified by European or US authorities in several Mercosur countries (e.g. "With regard to the ’hormone-free’ sector, the European Commission has identified worrying shortcomings in control and certification in Brazil and Paraguay. » p 113).
  • The agreement also provides for measures to simplify and streamline controls, despite the repeated health scandals that have shaken Brazil in particular.

This report is far from exhaustive and does not explore all the sensitive issues in detail. For example, the question of the impact on biodiversity of the expected increase in European pesticide exports (including pesticides banned in the EU) to Mercosur countries is not examined. Certain products such as soya or products from the extractive sector are not addressed. Nor does the report mention the human rights impacts of this agreement, which are documented in the work of the Veblen Institute and the FNH and many other NGOs.

The Veblen Institute’s work on this agreement ::

Juin 2019 : Open letter signed by more than 340 organisations calling on the European Union to stop trade negotiations with Brazil

Octobre 2019 : Contribution of the Veblen Institute and the FNH transmitted to LSE consulting and the European Commission on the draft interim sustainability impact assessment report of the agreement.

Nov 2019 : Analysis of the content of the agreement by the Veblen Institute and the FNH, A lose-lose agreement. Preliminary analysis of the trade agreement between the EU and Mercosur

Juin 2020 : Filing of a complaint by the Veblen Institute, the Nicolas Hulot Foundation, Clientearth, Fern and the International Federation of Human Rights with the EU Ombudsman for the Commission’s failure to fulfil its legal obligation to ensure that this agreement will not lead to social, economic and environmental degradation or human rights violations.

Juillet 2020 : Opening of an investigation by the EU Ombudsman, following the complaint lodged by the 5 associations.

Juillet 2020 : New contribution from the Veblen Institute, ClientEarth, Conservation International and Fern sent to LSE Consulting and the European Commission on the shortcomings of the draft final report of the Sustainability Impact Assessment.

Timetable for the negotiations :

1999: Start of negotiations between the EU and the Mercosur countries.
2009: Publication of the first Sustainability Impact Assessment.
2010: Resumption of negotiations after a period of suspension and new impetus in 2016.
29 June 2019 : Announcement of the closure of the trade negotiations between the EU and the Mercosur countries at the G20 Summit in Japan. Emmanuel Macron describes the project as "a good trade agreement, good for our businesses and our jobs".
23 August 2019: On the sidelines of the G7 Summit in Biarritz, Emmanuel Macron acknowledges that France has "a share of complicity" in the fires that are ravaging the Amazon and announces "that it will not sign Mercosur as it stands".
29 June 2020 : Statement by Emmanuel Macron before the Citizen’s Convention for the Climate: "That is why I have stopped the negotiations on Mercosur altogether, and the latest reports that have been submitted to us confirm me in this decision".
2 July 2020 : Statement by the High Representative of the European Union for Foreign Affairs, Josep Borrell, welcoming the finalisation of the negotiations of the agreement between the EU and Mercosur.
22 July 2020 : Publication of the draft Sustainability Impact Assessment report of LSE consulting

 source: Veblen