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Mercosur trade deal threatens to wreck EU’s climate credibility

Euractiv | 2 April 2021

Mercosur trade deal threatens to wreck EU’s climate credibility

By Ani Toni and Laurence Tubiana

To pass the EU-Mercosur deal in its current state would set an horrific precedent for future trade deals currently under negotiation and fly in the face of the EU’s landmark Green Deal, write Laurence Tubiana and Ani Toni.

Laurence Tubiana is chief executive of the European Climate Foundation and was France’s Climate Change Ambassador and Special Representative for the 2015 COP21; Ani Toni is executive director of Brazil’s Instituto Clima e Sociedade.

With Portugal seemingly stepping up its efforts to find a route to ratification of the EU-Mercosur trade and cooperation deal before its presidency ends in June, now is the time to recognise that the deal in its current form is not fit for purpose, and threatens to fatally undermine the EU’s leadership on climate, hard-won through the EU Green Deal.

When we say it is unfit, we don’t just mean for as long as Bolsonaro remains in power in Brazil. Though his disregard for the environment, human rights and diplomatic norms are extreme, all governments have been guilty of failing the climate to some extent.

We need an agreement that is fit for all circumstances, and reflects the EU’s intention not just to ensure that trade doesn’t worsen the twin climate and nature crises, but that it works as a lever to raise ambition. Trade can undoubtedly be a force for good, if it is backed by genuine political will.

What we shouldn’t countenance is trade at any cost. To pass the EU-Mercosur deal – the largest of its kind for either side – in its current state would set an horrific precedent for future trade deals currently under negotiation and fly in the face of the bloc’s landmark Green Deal. It would send out a message that the EU considers environmental and social concerns to be secondary to commercial gain – and that there is an inherent conflict between the two aims.

In its current toothless form, the agreement never had a hope of dissuading Bolsonaro from laying waste to the Amazon rainforest or backsliding on Brazil’s Paris commitments. Its trade and sustainable development chapter (TSD) – the principle means of addressing environmental and social concerns – lacks both clear commitments and means of enforcement. This is not an acceptable outcome of two decades of negotiation.

Given the latest polling shows three-quarters of Europeans oppose ratification of the deal – even if this would reduce exports to South American countries – confirming the deal would likely be a hammer blow to public confidence in the EU’s climate ambition. Indeed, we wonder whether the Portuguese presidency has seen the results, which show that the country’s citizens have the highest level of opposition among the 12 countries surveyed, at 85%.

The strategy of the Portuguese presidency appears to be to split the agreement into separate political and trade texts, allowing the latter to fall under so-called EU competence and be passed by qualified majority voting. The rumoured “sweetener” would be an additional protocol addressing some of the environmental concerns related to the Amazon in the existing agreement. But the non-binding nature of any additional protocol would only serve to provide false reassurance.

The trade agreement struck with the UK on its departure from the bloc – described as the first to make climate a make or break issue – should provide the baseline standard for all agreements yet to be concluded, including EU-Mercosur.

While not perfect, it affirms each party’s ambition of achieving climate neutrality by 2050 and dictates that taking insufficient action to reach the target would be a direct breach of the agreement which could lead to immediate tariff consequences, and in extremis suspension or termination of the agreement itself. The latter point – a means of enforcement – is of the utmost importance.

However, the UK deal has been criticised for the lack of any environmental impact assessment, which is increasingly the norm for new trade deals. Why should we accept any less from the EU-Mercosur Agreement? What is Europe gaining from it that it feels it can put the Amazon forest at further risk? It seems unconscionable to us that Europe could proceed without understanding the environmental consequences of the future trading relationship and how these could be mitigated.

A commission established by the French government in 2019 and headed by environmental economist Stefan Ambec warned that as it stood the agreement would increase the risk of deforestation in the Mercosur countries. Another study coordinated by Imazon, a Brazilian think-tank, titled “Is the EU-Mercosur trade Agreement Deforestation -Proof?” comes to the same conclusion.

Given the 20 years it took to negotiate and the potential economic benefits, there will be pressure to ratify EU-Mercosur extending well beyond the Portuguese presidency of the EU. In its current form the agreement therefore represents an ever-present danger to the climate and environment.

The Portuguese presidency is quite right to say that the EU-Mercosur deal goes far beyond trade and that the EU’s credibility is at stake. It is precisely for these reasons that the deal must be renegotiated in critical ways.

 Fuente: Euractiv