A February version of the additional document to the EU-Mercosur Agreement prepared by the European Commission in the utmost confidentiality was leaked yesterday by the NGO Friends of the Earth Europe (1). This draft "joint statement", which is supposed to provide a number of safeguards to address the strong reservations expressed by many EU member states since 2019, does not resolve any of the environmental, climate and health threats that will become a reality if the agreement is ratified (2).

In the draft statement, the parties would merely affirm their commitment to implement the anachronistic provisions of the EU-Mercosur TSD chapter, which are non-binding and therefore of very limited scope. This approach falls far short of the new strategy announced on June 22, 2022 (3), in which the EU expressed its willingness to align its trade policy with sustainable development, including by means of trade sanctions in case of violations of commitments made under the Paris Agreement. Once again, there is a large gap between the EU’s theoretical commitments and the actual content it promotes in its trade agreements.

In a context of recurrent criticism at the World Trade Organization about European regulations stemming from the Green Deal (4), the declaration also fails to include a commitment by the Mercosur states not to contest before the WTO the recent European measures seeking to curb the adverse effects on the environment and climate of production processes for imported goods, in particular the carbon border adjustment mechanism, the regulation on imported deforestation, and the recent environmental mirror measure banning imports of products containing residues of two neonicotinoids prohibited in the EU.

According to FERN (5), the draft interpretative document proposes a flawed interim target to reduce deforestation by at least 50 per cent from current levels by 2025. According to Rainforest Foundation Norway, this would violate Brazil’s own stricter law’s target on reducing deforestation. The Commission’s proposed interim target would, in effect allow a 47 per cent increase of Brazil’s 2020 deforestation target, according to the NGO Rainforest Foundation Norway."

The declaration does not contain any commitment by the EU to stop its exports of pesticides banned in the EU for their hazardousness to health or the environment.

Finally, there are no measures to make tariff preferences conditional on compliance with sustainability standards for the most environmentally sensitive goods. The issue is not even addressed, while the agreement will facilitate the entry of goods that are produced using practices prohibited in the EU. French demands to introduce binding mirror clauses in the tariff conditionality of the agreement have thus remained a dead letter, despite the support expressed by the Netherlands in April 2020 and again by Austria at the Agriculture and Fisheries Council of March 20.

The three "red lines" drawn by France, in terms of climate, deforestation and health and environmental standards for imported agricultural products, therefore remain relevant.

While European leaders are expected to address the sensitive issue of the agreement’s ratification "methodology" at their March 23-24 summit, Paris must strongly reaffirm its opposition to the Agreement and do everything possible to keep its veto right and prevent the ratification of this draft Agreement.

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Notes

(1) The progress of negotiations on this document remains uncertain at this time. The draft statement was presented by European negotiators to Mercosur countries in mid-March. But other sources report that the Mercosur countries may present their own document on April 19 and 20.
(2) UE-Mercosur : les dangers d’une ratification de l’accord de commerce en l’état, Institut Veblen, FNH et Interbev, Mars 2023, Mercosur (veblen-institute.org)
(3) See in particular the communication presented by Australia, Brazil, Canada, Colombia, Costa Rica, Dominican Republic, Ecuador, Guatemala, Honduras, Malaysia, Nicaragua, Panama, Paraguay, Peru, the United States and Uruguay, against the European Union concerning the "implementation of non-tariff barriers on agricultural products", of 4 July 2019, GCW767.pdf (politico.eu). See also the communication from Argentina, Australia, Brazil, Canada, Colombia, Costa Rica, Dominican Republic, Ecuador, Guatemala, Honduras, Jamaica, Malaysia, Nicaragua, Panama, Paraguay, Peru, United States, and Uruguay, on the EU’s implementation of "non-tariff barriers on agricultural products", on November 1, 2019. directdoc.aspx (wto.org)
(4) See the Communication "The Power of Trade Partnerships: Together for Green and Fair Economic Growth", in which the Commission sets out its strategy for strengthening the implementation and enforcement of the trade and sustainable development chapters of the EU’s trade agreements.
(5) FERN, Still got it! As discussions aimed at ratification begin, Mercosur deal retains its capacity to dismay, 13 April 2023