The EU-Mercosur free trade agreement: a critical analysis and an alternative

On December 6, the visit of European Commission President Ursula von der Leyen to the Mercosur Summit sealed the agreement on the final text of the EU-Mercosur Association Agreement. Both ENDS condemns this damaging agreement for undermining human rights, the environment, and democracy in Europe, and in Mercosur countries. Should the agreement be ratified as it stands, it will have devastating consequences for the environment, indigenous communities, family farming and small-scale farmers on both sides of the Atlantic.

Indigenous communities in Paraguay saw their attempts to regain their ancestral lands thwarted by German investors. This is the level of impact that investment treaties can have on social, environmental and economic development and rights. Why? Because of the ‘Investor-to-State Dispute Settlement’ (ISDS) clauses that are included in many such treaties.

The decision of Minister for Climate and Energy Rob Jetten to withdraw from the Energy Charter Treaty (ECT) is good news for the energy transition in the Netherlands and beyond. Governments of countries that are party to this treaty can therefore shape the transition to sustainable energy without having to fear claims by Dutch-based businesses.

At the core of the Fair, Green, and Global (FGG) Alliance’s mission is the commitment to building a just and sustainable world. As members of this alliance, Both ENDS, SOMO, and the Transnational Institute (TNI) recognise the urgent need to reimagine global investment frameworks. These frameworks, entrenched in outdated treaties such as Bilateral Investment Treaties (BITs) and the Energy Charter Treaty (ECT), often prioritise corporate profits over human rights, environmental sustainability, and social justice.

Today, more than 340 organisations from both South America and Europe, including Both ENDS, have sent a joint open letter to European Union leaders calling for the EU to cease negotiations on the EU-Mercosur Free Trade Agreement. The organisations and their constituencies are seriously concerned about increasing violations of indigenous human rights and damage to nature and the environment in Brazil.

Germany must use its influence as president of the EU in the second half of this year to ensure that the controversial EU-Mercosur free trade agreement is not signed. This is the message in a letter presented to German chancellor Angela Merkel today by 265 civil society and environmental organisations from the EU and Mercosur countries. The deal between the EU and Argentina, Brazil, Uruguay and Paraguay will stimulate destruction of the natural environment and the violation of human rights in vulnerable areas in South America. The agreement will also give European farmers an unfair competitive advantage. Dutch signatories to the letter include Greenpeace and Both ENDS and various organisations united in the Handel Anders! coalition.

The EU-Mercosur trade agreement leads to environmental destruction, violation of the land rights of farmers and indigenous people and the loss of industrial jobs in the Mercosur countries. It also creates unfair competition for European farmers. The Handel Anders! coalition is calling for an alternative agreement to improve the political cooperation between the EU and the Mercosur countries and is making proposals for just and sustainable international trade rules. That is the core message of new publication presented today in the Nieuwspoort in The Hague.

Silencing the Voices of Environmental Defenders

Together with environmental justice groups from the Global South, Both ENDS works towards a sustainable, fair and inclusive world. In recent years, our partners have become increasingly threatened, intimidated, violated, imprisoned, and even murdered as a result of their environmental and human rights activities. Our advocacy partners face repressive reprisals for speaking out against environmentally destructive initiatives and denouncing human rights abuses of companies and governments, whilst the communities they support are subjected to violence for simply acting out of necessity to protect their lives, land, territories, and communities from harm.

On 23 May, the Netherlands celebrates 60 years of bilateral investment treaties (BITs). The first BIT was signed with Tunisia in 1963. These treaties were intended to make an important contribution to protecting foreign investments by Dutch companies. A study by SOMO, Both ENDS and the Transnational Institute (TNI), however, shows that in practice they mainly give multinationals a powerful instrument that has far-reaching consequences people and the environment worldwide.