Trading Away the Future: How the EU-Mercosur deal fails people and the planet - and what needs to be done

The EU-Mercosur is a harmful trade agreement for workers, women and consumer health. A neo-colonial agreement which only benefits agribusiness and those most responsible for deforestation and environmental destruction in South America, and severely limits the possibilities for environmental protection, green transition and sustainable development in the European Union and Mercosur countries.

Both ENDS denounces this harmful agreement, which undermines human rights, the environment, and democracy in Europe and in Mercosur countries. Especially in times where the contribution of trade to sustainable development is under increasing scrutinity, we renew our call for a new approach to trade policy. To a trade model that puts social welfare and environmental protection at the centre.

A harmful agreement for Mercosur countries

Economists have denounced that sustainable impacts assessment reports do not show significant positive macroeconomic effects of the EU-Mercosur agreement. And yet, certain sectors -such as the European agro-automobile sector, as well as the extractive and agro-industrial sectors in Mercosur countries- will reap huge benefits through the reduction or elimination of tariffs and export barriers on certain products and commodities. This trade deal will perpetuate the position of primary export economies of the Mercosur countries by stimulating low-productivity, low-wage sectors and limiting the growth of dynamic economic sectors. Industrialisation would benefit Mercosur economies by increasing their manufacturing capabilities, therefore increasing their share in higher added-value markets.

Indigenous peoples will be hit hard by the agreement. As many of the lands they live and work on will be threathened by the expansion of agribusiness, evictions, land rights violations and poverty are expected to increase.

Last-minute deals regarding public procurement provisions will contribute to the privatisation of public services, precluding universal access by the population. Local small and medium-sized enterprises or small agricultural producers and family farming, among other vulnerable sectors, will be severely hit from exclusion to public purchases of goods and services.

Graciela Rodriguez, of the Equit Institute and Coordinator of REBRIP's Working Group on International Economic Architecture has said over the EU-Mercosur agreement:

"A neo-colonial and anachronistic agreement... we've gained nothing of substance and we've only lost... Why sign now?

The EU-Mercosur agreement only strengthens the extractive sector - the agrarian/minority exporter - which has achieved almost nothing, but which has been strengthened in terms of "prestige" and with more "justification" to continue burning to expand the agricultural frontier. And while we're on the subject of prestige, to continue eroding our democracy in its efforts to concentrate land and wealth."

A harmful agreement for the environment

As it stands, this trade agreement will further contribute to deforestation and the loss of biodiversity in areas such as the Amazon or the Gran Chaco biome, due to incentives for the production and export of agricultural raw materials and commodities (such as soy, as a product for animal feed, or sugar) or beef meat.

Far from contributing to the global green transition, this agreement will deepen the extractivist practices of European transnational corporations. Lacking an efficient mechanism to monitor and hold corporations responsible for environmental disasters, we should expect an increase in crimes committed against the environment by mining and extractive projects.

While the European Commission insists that the agreement will increase environmental protection and improve compliance with the Paris Agreement, the truth is that the current text is limited to an exercise in greenwashing. On the one hand, it lacks valid and binding mechanisms to promote implementation and compliance with the Paris Agreement. On the other hand, it does not provide mechanisms to stop deforestation. In fact, the concessions made by the EU, in the form of rebalancing mechanisms due to expected trade distortions, severely limit the scope of the EU Deforestation Regulation and the Carbon Border Adjustment Mechanism.

A harmful agreement for democracy

Negotiated for 25 years behind closed doors, the voices of communities, civil society organisations and peoples on Mercosur countries and Europe have been excluded from this agreement. Farmers and workers have expressed their opposition in the streets.

As we enter the ratification phase, there is every reason to believe that the European Commission will attempt to split the agreement, separating the trade part from the cooperation and political sections, and bypassing the democratic procedure of parliamentary ratification by member states. Through this mechanism, a mere two-thirds vote in the European Council and approval by the European Parliament would suffice to ratify the agreement. This is an anti-democratic measure that harms the right of European citizens to decide.

On several occasions in recent years - most recently on 3 December - the Tweede Kamer voted overwhelmingly against the ratification of the EU-Mercosur agreement. Many voices reclaim that the Dutch government expresses in the European Council the clear and strong opinion of the Dutch people, who want to decide on a trade agreement which will cause profound consequences on the lives of peoples on both sides of the Atlantic.

Another trade policy is possible

As a member of Handel Anders!, the European Trade Justice Coalition and the Stop EU-Mercosur platform, Both ENDS rejects a trade agreement that will be detrimental to the peoples of Mercosur and Europe and harmful to the environment, the economy and democracy.

Instead of ratifying the current agreement, we need a new trade and cooperation framework between the EU and Mercosur countries which benefits the planet and the peoples of both regions.

In order to contribute to climate change goals in line with the Paris Agreement and the European Union Deforestation Regulation, among others, the agreement should include binding commitments and enforceable mechanisms . Furthermore, a new agreement should create the conditions for industrial and productive transformation in Mercosur countries that contribute to sustainable development and green transition. Finally, a new agreement should include the voices of small and family farmers, local communities, women and workers, encouraging sustainable practices such as agroecology and thus supporting the transition towards sustainable local food and agricultural systems.

Stop EU-Mercosur! Reclaim a trade policy for development and the environment!