B-R5: The EGP opposes the EU-Mercosur Agreement

As Greens, we believe in a global trading system that is based on global justice
and solidarity, shapes globalization for the better, and puts human wellbeing at
its centre while taking into account the biophysical limits of the planet. We
believe in reshaping the EU’s trade policy towards sustainable development and
stronger human rights protection.

Therefore, we are deeply worried by the negotiations between the EU and the
Mercosur countries to conclude an Association Agreement affecting 700 million
people and that would be the world’s most ambitious bi-regional agreement. These
negotiations to complete the agreement in principle tentatively announced in
2019 hinge notably a Joint Instrument tabled by the European Commission and the
counterproposal put forward by the Mercosur.

The expected outcome

Even though the texts discussed since the Joint Instrument and the Mercosur
counterproposal (both were leaked) are not public, the final agreement will
likely fall short of the EU demands in the Joint Instrument and even fail to
meet the level of ambition shown in the EU-New Zealand Agreement, which was
hailed as the “gold standard”. Mercosur countries are steadfast in their
rejection of sanctions or additional sustainability requirements. The EU-
Mercosur agreement will therefore be incompatible with the European Green Deal
and the Sustainable Development Goals. We share the view of Latin Americantrade
unions, CSOs and academia who consider that this Agreement will deepen economic
asymmetries, locking Mercosur countries into a development path based on agri-
food and mineral exports and hindering economic diversification.

On the EU side, the attempts to pursue the trade agreement have already led to a
legislative chilling effect. The long overdue animal welfare review was
presumably put on the backburner because it would have impaired imports from
Mercosur. In the same vein, the President of the European Commission announced a
one-year delay to the Deforestation Regulation, two weeks after bilateral
meetings with presidents of Mercosur countries who repeated their concerns about
this supposed “trade irritant”.

The Agreement was opposed by farmers during their protests over the winter of
2023-2024 for fear of unfair competition from unmanageable flows of imports.
Despite words of comfort from the political parties in power ahead of the
European election and the recommendations of the recent Strategic Dialogue on
the Future of EU Agriculture calling for a “stronger alignment of imports with
EU food and farming standards” and a fundamental rethinking of agriculture’s
place in EU trade agreements, the EU-Mercosur Agreement has not been adapted
accordingly. EU farmers will be exposed to competition from agri-food products
that do not comply with higher EU sanitary and phytosanitary standards and use
toxic chemicals (fungicides, herbicides, insecticides) banned in the EU. Like
farmers’ organisations, we consider that the proposal floated by the Commission
to create a new fund to compensate European farmers for any negative impact of
the EU-Mercosur agreement is an acknowledgement that the Agreement will indeed
harm farmers. Rather than tackling root causes, the Commission only suggests
that EU taxpayers foot the bill for the benefit of export sectors.

Since the pandemic and Russia's illegal war of aggression against Ukraine, the
risks of disruption to EU supply chains have become evident, including the EU’s
growing demand for strategic and critical raw materials. Most of the world’s
energy transition mineral projects are located either on or near Indigenous
peoples’ or peasant lands posing serious risks for human rights-compatible
permitting, consultation, and consent. Mercosur countries have huge reserves of
lithium, copper and other minerals. But the Agreement does not refer to the UN
principle of free, prior and informed consent, or to the UN Declaration on the
Rights of Peasants, or to the United Nations Declaration on the Rights of
Indigenous Peoples. Growing trade in raw materials seriously risks increasing
human rights violations, environmental degradation, including water scarcity and
pollution, and public health issues. Deforestation, which could rise by as much
as 25 per cent due to the Agreement, brings the same concerns.

We also have concerns regarding gender equality and women’s empowerment. The
sustainability impact assessment already outlined the “risks to women’s economic
independence” and academic research has projected overall negative impacts for
women in the labour market.

Towards the finalization of the deal

Over the last months, European Commission negotiators have continued technical
discussions with their South American counterparts, aiming to announce a final
agreement by the end of 2024. To our knowledge, the conditions for fair
competition, including for the farming sector, have not been included among the
concrete proposals, or even discussions. The process thus ignores the Strategic
Report’s recommendations onagriculture commissioned by the President of the
European Commission.

The Greens are alarmed by the possibility that the Commission splits the
Association Agreement to facilitate the adoption of the Trade part, which
requires a qualified majority voting (contrary to the Political and Cooperation
part subject to the unanimity rule). Such a decision would circumvent the
opposition of some Member States and bypass Parliamentary oversight, running
counter to the 2018 Council Conclusions declaring the Mercosur Agreement as a
mixed agreement.

We are also worried about the rebalancing mechanism requested by the Mercosur
countries. This demand to be compensated for possible negative externalities of
EU autonomous measures would violate the EU’s strategic autonomy and right to
regulate. It would set a dangerous precedent for future EU trade agreements. It
would also create uncertainty about the future implementation of the Carbon
Border Adjustment Mechanism, which has been fiercely criticized by Mercosur
countries.

We support a closer relationshipwith Mercosur partners but based on another
narrative and hinging on other modalities. The Greens in the European Parliament
commissioned a study on alternative partnerships that put people and planet
first and that can definitively turn the page on the “cows for cars” approach to
trade.

For all the above-mentioned reasons, the European Green Party: