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EU-Mercosur mythbuster

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Greenpeace | 5 October 2020

EU-Mercosur mythbuster

The EU must make progress on several fronts to play its part in tackling the climate emergency, avoiding ecological collapse and preventing future health crises.

European meat consumption, already double the global average, must be reduced by 71% in the next nine years to cut greenhouse gas emissions and to protect forests and other ecosystems. Intensive animal farming and forests and ecosystems destruction for animal feed production or pasture both put us at risk of future pandemics, as the destruction of nature allows new diseases to emerge and factory farms act as breeding grounds.

Despite being banned in Europe for their impact on human health and on nature, the EU continues to export dangerous pesticides to third countries. Though they are banned for sale in Europe, residues of these pesticides can be reimported on crops grown in third countries. The EU’s export of hazardous pesticides must stop.

Petrol and diesel combustion engine cars account for 12% of the EU’s greenhouse
gas emissions, and make significant contributions to air pollution which caused about 400,000 premature deaths in the EU in 2016. By 2028, sales of new diesel, petrol combustion engine cars and hybrid cars must end in the EU.

The EU-Mercosur free trade agreement (FTA) will not only stop any progress on any of this from happening, it actively works to achieve the opposite. The point of the deal is to increase trade in agricultural products like meat and soy, chemicals like pesticides, and cars and car parts. It is in direct opposition to the goals of the European Green Deal . The devil is not just in the details – the whole FTA is set up to take us backwards on climate action and nature protection . No changes or additions to it will make it better.

But powerful economic interests want this deal to go through. And they will say anything to make it happen. We’ve made this mythbuster to unpick their spin on this toxic deal.

-* Some European leaders say they won’t sign the agreement “as it is now” , so we can rest easy

As of autumn 2020, the EU-Mercosur free trade agreement is in the hands of lawyers and translators to agree on the final detailed wording (what is termed “legal scrubbing”). The last negotiations finished in June 2019, so technically the deal EU Member States would finally sign, after the “legal scrubbing” would be different. But this is no reassurance – the CETA deal that was signed between the EU and Canada had had 19% of text changed after the negotiations officially closed, but the final deal was just as dangerous for the environment, workers’ rights and public health.

This is because the “legal scrubbing” is neither meant to alter any significant part of the FTA’s text, nor to change its underlying economics. The fundamental problems of the EU-Mercosur deal can only be addressed by rejecting the deal entirely, and resetting EU trade policy on an entirely different basis.

Yet, some European leaders have mentioned that something along the lines of an “interpretative declaration”, that they would attach to the agreement, could be used as a fix for the damaging effects of the agreement. While such declaration would be mutually agreed, it would not change the terms of the agreement in the way the achievement of environmental, health and social protection would require. At best, it would influence the agreement’s interpretation, providing a nice packaging to an otherwise very bad deal: the negotiators designed the agreement to increment trade at the expense of climate, forest and ecosystem protection, health and human rights. Hence, the only reasonable option is to reject it.

-* “This deal would allow EU leaders to exert more influence and pressure on Brazil and Bolsonaro”

The European Commission concluded the deal with Brazil and the other Mercosur countries while the Bolsonaro administration pushed forward its agenda to weaken environmental and climate protection and the rights of indigenous people. So Bolsonaro has seen that his environmental destruction and inhumane policies are not only tolerated by the EU, and Germany as the main driver of the EU-Mercosur deal, but are actually getting rewarded. So much so that the agreement contains no sanctions for human rights violations or non-compliance with environmental rules.

Even if the EU did try to use the trade deal to push Brazil to stop violations like these, the speed would be glacial. Look at the EU-South Korea agreement, the first of the new generation of EU free trade agreements, with a trade and sustainable development chapter. Before the deal was even signed in 2011, and came into force in 2013, South Korea failed to ratify key International Labour Organisation conventions that they had promised to as part of the trade agreement. But it took six more years before the EU Commission started a dispute related to labour rights. This shows how long it would take to take action, and it is still not clear if this action will even improve conditions for workers in South Korea.

-* “We can’t increase pressure on Bolsonaro without deepening relations with Brazil”

EU commercial relations with Brazil are already as deep as they could be: it is worth noting that the EU is Brazil’s second-largest trade partner
, the second-biggest importer of Brazilian soy , and a major importer of Brazilian beef . The EU is a strategic and irreplaceable trade partner, even without this deal. Yet the EU either hasn’t been willing or hasn’t been able to influence Bolosonaro’s disastrous policies. The EU-Mercosur FTA would be “more of the same” policy, which would boost the trade of the very agricultural products that are driving forest and ecosystem destruction, and related human rights abuses, without doing anything to address those problems.

If the EU is serious about protecting natural forests and ecosystems as well as human rights, it must ensure its consumption no longer drives environmental destruction and human rights violations. The best way to do this is a new EU law that requires companies to prove there’s no deforestation, ecosystem conversion or human rights abuses linked to the products they want to sell in the EU market.

-* “If the EU doesn’t do this trade deal, the Mercosur countries will do one with China and the EU will lose influence, which would be worse for the environment and human rights”

We don’t need trade agreements to trade – the EU already trades with the Mercosur countries, and so does China. The Mercosur countries are in fact looking to sign this deal with the EU as their trade with China slows down.

The EU has a population of almost 450 million people, with a lot of purchasing power and the responsibility that goes with it. We should not downplay the power the EU has, let’s just make sure EU leaders use that power to make positive change in the world – to ensure that workers around the world have their labour rights protected as they produce the food we eat, and to ensure that our consumption doesn’t contribute to forest and ecosystem destruction or human rights abuses.

At EU level, we need a new law to ensure that the products of forests and ecosystem destruction and human rights violations can no longer end up on our supermarket shelves. We expect this is to be an important step towards the reduction of the environmental and social footprint of the EU’s consumption. It makes no sense for the EU to conclude free trade agreements that promote trade in harmful commodities and products that the new law should try keep out of the internal market.

-* EU leaders are making these trade deals to benefit small and medium enterprises

This is a trade deal created only to benefit the largest of corporations, who are tied to 80% of global trade. For instance, pesticide manufacturing giants based in Europe, such as BASF or Bayer-Monsanto , stand to make enormous gains

if the EU-Mercosur deal is ratified.

They are already selling highly hazardous pesticides, not allowed to be sold on the EU market, in Mercosur countries. This deal would only reward them further, by providing preferential tariffs on exports of European chemicals to the Mercosur countries, just boosting their profits.

Only large corporations can take advantage of any benefits trade agreements can bring to companies, as it is difficult for smaller companies without the resources to do so. This is why SMEs generally prefer to simply export under WTO rules, or not export outside the EU at all. In this sense, we can even see this agreement as a barrier to success for SMEs, as it makes the already uneven playing field with large corporations even more tilted. The chapter on SMEs in this agreement is only four pages long, and no sanctions can be applied in the case of violations of provisions in this chapter. Clearly SMEs are not a priority for those who negotiated this agreement.

-* This deal will deliver more jobs

Even the European Commission’s own sustainable impact assessment admits this deal is unlikely to add a significant number of jobs. The assessment was only finished once the negotiations were completed, meaning these findings were not taken into account in the agreement, so nothing was drafted to address the problems found. The numbers of sectors with predicted job losses certainly busts the myth of job creation, and the few figures showing job increases are negligible at best. For example, even looking at the Commission’s best-case scenario projections, they expect employment in the motor vehicle and transport equipment sector to increase by only 0.5% because of this deal. This is a sector that grew 11.6% since 2011 without this deal.

Investing in green transport will create new sustainable and local jobs. Nearly five million more jobs could be created if UNECE countries doubled their investment in public transport. A study by the European Cyclists Federation shows that around 655,000 people work in the cycling related sectors already as of today in the EU, and if cycling’s modal share were to be doubled, more than 400,000 additional jobs could be created.

-* The coronavirus pandemic means high economic losses, we need this trade deal to regrow the economy.

Even the proponents of this say it will only expand EU GDP by 0.1% by 2032 – while at the same time anticipating consumer prices to increase by 0.2%.

Free trade has time and again shown to only benefit large corporations at the expense of the average worker and the environment. Government spending is essential to protect jobs and provide services, especially in tough economic times. But reducing tariffs on trade will take away a key source of government revenue. If VAT is increased to compensate for the loss in revenue due to tariffs reductions, that will hit consumers even more. And there’s no guarantee that the goods traded will become cheaper, as companies can just choose to pocket the benefits from trade liberalisation rather than pass them on to consumers.

-* The agreement says parties should effectively implement the Paris climate agreement, this will help push Brazil and others to act on climate

The article mentioning the Paris climate agreement is in the Mercosur deal’s trade and sustainable development chapter, which doesn’t have any mechanism to enforce the commitments.

The exclusion of the entire trade and sustainable development chapter from the agreement’s dispute settlement mechanism also raises questions as to how potential conflicts would be adjudicated. This brief and toothless commitment to the Paris climate agreement does not offer any reassurance.

-* The deal contains provisions on sustainable forest management, the obligation to combat illegal logging, including involving local and indigenous communities

Protecting the rights of Indigenous People and local communities and their livelihood must be a priority for EU policy on the protection and restoration of world forests and ecosystems. It is clear, however, that the EU-Mercosur FTA is far from being the appropriate instrument to achieve this. The European Commission has made no effort to ensure that these groups were consulted on the deal’s content and it did not wait for the completion of its own sustainability impact assessment before concluding negotiations.

The deal is based on the assumption that the “inclusion” of Indigenous Peoples in transnational “supply chains of timber and non-timber forest products” is by definition the most appropriate or desirable means of “enhancing their livelihoods” and “promoting the conservation and sustainable use of forests.” However, it ignores how this “inclusion” concretely takes place nowadays.

Murders of environmental defenders and Indigenous leaders are at an all time high in the Amazon, and the idea of concluding an internationally binding agreement that does not address this is scandalous.

Instead of enhancing the protection for Indigenous People and local communities, the provisions of the agreement change the wording “free, prior and informed consent” (recognised by the UN as an essential guarantee of Indigenous People’s rights over the land they live on) to “prior informed consent”. That they don’t even use the established human rights norm in this provision is more indication that the rights of Indigenous People were not a high priority in the trade deal.

In its Communication on “Stepping up EU Action to Protect and Restore the World’s Forests”, the European Commission recognised that the EU consumption represents a disproportionate 10% of the global share of deforestation embodied in total final consumption of commodities such as palm oil, beef, soy, cocoa, maize, timber and rubber. We need policies and laws that stop this, not exacerbate it.

Further resources on the deal:

  • Greenpeace e.V.: EU-Mercosur: Double Standards concerning agrotoxics. The brief analysis shows that companies in the EU, including the German chemical giants BAYER and BASF, will benefit from the planned custom duty exemption under the EU-Mercosur trade agreement – at the expense of biodiversity, people and the environment.
  • Fritz, T.: EU-Mercosur Agreement: Risks to Climate Protection and Human Rights. The publication by MISEREOR, Greenpeace and CIDSE describes central human rights and ecological risks posed by the EU-Mercosur Agreement based on the texts of the treaty as published to date. It also analyses the extent to which the intended agreement could obstruct the necessary control of harmful movements of goods
  • Greenpeace e.V.: EU-Mercosur Legal Q+A. This document provides information on the text of the agreement, focusing on the Trade and Sustainable Development Chapter and the precautionary principle, as well as issues such as the right to regulate, food safety, and the Paris Agreement.

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 source: Greenpeace