Negotiations between the EU and Mercosur countries, initiated in 1999, resulted in a 2019 agreement in principle on the trade component. However, new negotiations took place in 2023 and 2024 regarding an additional instrument. To address internal opposition, the EU demanded additional commitments concerning adherence to the Paris Agreement and combating deforestation. Meanwhile, Brazil sought to better protect its industry (1). Ultimately, changes were made to the text’s content, though not to the agricultural chapter or the production’s sanitary and environmental standards.
A preliminary analysis of these new texts indicates that the clauses added at the EU’s request are in no way sufficient to effectively prevent the anticipated health and environmental impacts arising from the implementation of the trade agreement (I). Furthermore, some of the new provisions—such as the rebalancing mechanism for trade concessions—could prove highly detrimental, making it exceedingly difficult to adopt and effectively implement mirror measures within the EU or in Mercosur countries in the future (II).
Finally, this note examines the democratic deficit in the negotiation process and the upcoming political steps. The content of these final negotiations was kept secret until their conclusion, even from parliamentarians and member state governments. The European Commission’s communication on the negotiation outcomes appears overly “favorable,” even misleading on certain points (III).
In any case, the three red lines drawn by France in 2020 regarding the agreement remain relevant, and their violation should continue to justify a definitive rejection of the EU-Mercosur agreement.
1. Insufficient Environmental Guarantees
1.1 Paris Agreement as an Essential Element of the Agreement
The Paris Climate Agreement is now included as an essential clause in the EU-Mercosur agreement, as was done in the EU-UK and EU-New Zealand agreements.
While this addition is useful, it does not resolve contradictions between the trade agreement and the implementation of the Paris Agreement. As drafted, the essential clause applies only in cases where a party exits the Paris Agreement. Its wording is even weaker than that found in past agreements with the UK and New Zealand (2).
Moreover, essential clauses already exist for human rights (3), but they are rarely invoked, as key actors in trade policy often view them more as deterrents than actual enforcement mechanisms (4). The French panel of expert’s report on the EU-Mercosur agreement stresses that the effectiveness of essential human rights clauses “has been limited by the preference for incentives over the threat of sanctions” (5).
In the case of Mercosur, activation would be even more complicated because the agreement involves regional blocs. For example, if Argentina decided to leave the Paris Agreement, suspending the entire agreement seems politically unlikely, and a partial suspension affecting only Argentina would be technically challenging to implement.
Finally, the credibility of a clause on good faith implementation of the Paris Agreement is questionable. Hasn’t the Argentine government already shown bad faith by withdrawing its climate negotiators from COP 29 just three days after it began in November 2024? How credible, then, is this commitment?
Article XX
“2. The Parties shall cooperate, as appropriate, on trade-related climate change issues bilaterally, regionally, and in relevant international fora. In this context, recognizing the role of trade in contributing to the response to the urgent threat of climate change, each Party shall remain a party, in good faith, of the UNFCCC and its Paris Agreement.
3. The Parties agree that the second sentence of paragraph 2 constitutes an essential element of this Agreement.”
Article XY
“The suspension of this Agreement in the event of a violation of the essential element set out in Article XX [Paris] committed by a Signatory MERCOSUR State shall not entail the suspension of the operation of this Agreement in relation to the other Signatory MERCOSUR States.”
1.2 Deforestation
The agreement includes a vague and non-binding commitment to halt deforestation after 2030.
16. “Each Party reaffirms its relevant international commitments and shall implement measures, in accordance with its national laws and regulations, to prevent further deforestation and enhance efforts to stabilize or increase forest cover from 2030. In this context, the Parties should not weaken the levels of protection afforded in their environmental law.”
The annex to the “Trade and Sustainable Development” chapter also contains provisions that could weaken the implementation of the EU regulation on deforestation. The annex states that the EU commits to using information provided by Mercosur national authorities to verify compliance with requirements, including traceability. Additionally, the agreement’s existence will be considered when assessing Mercosur countries’ deforestation risk levels.
55. “Where a Party’s law provides for verification of compliance of an imported product with the relevant laws of another Party, the Parties acknowledge that the authorities of a Party are best placed to assess compliance with the law of that Party. Hence, when assessing compliance with the law of a Party, the Parties shall use the information provided by the latter’s authorities.
56. With regard to the implementation of sustainability measures affecting trade and the placement on the market related to the protection of wooded ecosystems and where EU law so allows:
(a) The EU recognizes that this Agreement and actions taken to implement commitments thereunder shall be favorably considered, among other criteria, in the risk classification of countries. (b) Documentation, licenses, information, and data from certification schemes and traceability and monitoring systems officially recognized, registered, or identified by Mercosur countries shall be used as a source by the relevant authorities in the EU for the purpose of verifying compliance of products covered by such measures with traceability requirements placed on the EU market. (c) In case of a divergence between the documentation, licenses, information, and data from certification schemes and traceability and monitoring systems officially recognized, registered, or identified by Mercosur countries, and the information being used by the relevant authorities in the EU, the latter shall, upon request, promptly consider information and clarifications provided by Mercosur countries.”
There is no binding sanction mechanism for violations of the sustainable development chapter’s provisions, such as on social rights, biodiversity, or deforestation. On this point, the agreement does not align with the EU’s recent commitments to integrating sustainable development into trade policy (6).
1.3 No Mirror measures or clauses
Contrary to repeated claims by the French government, no formal proposal for introducing mirror clauses was tabled.
“Mirror measures were not part of these negotiations with Mercosur,” stated Olof Gill, spokesperson for the European Commission on international trade, on December 9.
2. Rebalancing Mechanism: An Anti-Mirror Measure Tool
At Mercosur’s request, the agreement allows for the dispute settlement mechanism to be activated to seek compensation when one party’s unilateral measures affect the use of trade concessions agreed between the two blocs. This means that the other party can initiate mediation, escalate to a dispute settlement panel, and take corrective measures.
Article XX.1 Objective
“The objective of this Chapter is to establish an effective and efficient mechanism to: (b) preserve the balance of concessions accorded by Part X of the Agreement, when applicable.”
Article XX.4
“The provisions of this Chapter apply with respect to any dispute: (b) concerning an allegation by a party that a measure applied by the other party nullifies or substantially impairs any benefit accruing to it under the covered provisions in a manner adversely affecting trade between the parties, whether or not such measure conflicts with the provisions of Part X of the Agreement, except if otherwise expressly provided.”
The scope of this clause is interpreted differently by the parties. European officials argue that it is based on the WTO’s non-violation complaint (7) and does not apply to regulations already adopted, such as the Carbon Border Adjustment Mechanism (CBAM) or the deforestation regulation (EUDR), nor to measures foreseeable by the time negotiations are concluded.
However, the newly added definition of “measure” appears to include legislation not yet implemented at the conclusion of negotiations, as well as their implementing acts.
Article X.3 General Definitions
“Unless otherwise specified, for the purposes of this Agreement: … (j) ‘measure’ includes any measure by a Party, whether in the form of a law, regulation, rule, procedure, decision, administrative action, requirement, or practice. For greater certainty, the term ‘measure’ includes omissions and legislation that has not been fully implemented at the conclusion of the negotiations of this Agreement as well as its implementing acts.”
Clearly, Mercosur negotiators have a different interpretation than their European counterparts.
7. Setting up a Rebalancing Mechanism:
“An unprecedented mechanism has now been established preventing unilateral measures by one of the Parties from jeopardizing the balance established in the Agreement, as such measures have the potential to negatively affect the negotiated trade concessions and breach the balance of the agreed outcome. After the 2019 ‘political agreement,’ the European Union adopted legislation that, depending on its implementation, could disrupt the balance reflected in the 2019 understanding on issues not renegotiated in the phase that began in 2023. This includes, for example, EU quotas for Mercosur meat exports, which were not reopened in 2023 negotiations.
Parties established that arbitration will determine whether there was a breach of commitments and to what extent. If trade is restricted, compensation (market opening) must be offered. If no agreement is reached, temporary remedies (e.g., suspension of Agreement benefits) may be adopted.”
Such a mechanism could enable Mercosur countries, which have consistently opposed the effective implementation of mirror measures formally adopted by the EU (e.g., bans on imports of meat treated with growth-promoting antibiotics, the deforestation regulation (8), and the ban on agricultural products containing certain neonicotinoids (9)), to exert further pressure. If implemented, Mercosur countries could demand additional trade concessions as compensation, even if these unilateral measures are deemed WTO-compliant.
Furthermore, this would serve as a powerful regulatory freeze tool, impeding future measures on either side (e.g., phasing out internal combustion engine vehicles).
3. Opacity and Democratic Deficit
3.1 Opacity of Negotiations
The initial negotiations were already marked by significant opacity (e.g., non-publication of the negotiating mandate (10), Commission proposals, and draft texts (11) and violations of the Commission’s commitments, which the EU Ombudsman criticized (e.g., delayed publication of the sustainability impact assessment after negotiations had concluded (12).
This opacity persisted in the 2023 and 2024 discussions. Member states, European parliamentarians, and stakeholders were not given timely opportunities to contribute to ongoing proposals. On December 6, 2024, Sabine Weyand, the European Commission’s Director-General for Trade, told journalists that member states could not yet oppose the agreement because they were unaware of the changes made to the text.
Such practices are increasingly difficult to justify democratically. For agreements encompassing broader public policy domains, this approach also deprives negotiators of essential expertise contributions.
3.2 Misinformation
In preparing this note, several contradictions were identified between the European Commission’s FAQ and the exact wording of clauses in the final text. This excessively “favorable” presentation of negotiation outcomes resembles misinformation inconsistent with democratic principles. For example, the FAQ states: “All food products must comply with EU sanitary and phytosanitary standards. European rules apply uniformly to all products marketed in the EU, whether produced locally or imported. Our robust control system ensures compliance with EU rules.”
The Commission refers here to EU market standards, which apply uniformly to all products regardless of origin. However, it omits that EU sanitary and phytosanitary production standards do not apply to imported products. Additionally, the control system detects violations (e.g., a recent DG Santé audit in Brazil on hormone-treated beef (13) but relies on audits and sample checks. Total compliance cannot be guaranteed, and corrective measures sometimes face delays. In the hormone-treated beef case, Brazil unilaterally suspended exports, not the EU. Meanwhile, the EU has issued three successive reports highlighting irregularities in Canada that remain unaddressed (14).
3.3 Risk of Forcing Ratification
The text now requires legal review and translation into all official EU languages before submission for signature and conclusion by the Council and examination by the European Parliament.
The agreement was initially negotiated as an association agreement, combining a trade component and a political component, mixing EU-exclusive and shared member state competences. Under Article 218 of the Treaty on the Functioning of the EU, the Council must unanimously decide on such “mixed” agreements. Full ratification would then require a European Parliament vote and ratification by all member states following national procedures.
To bypass potential member state vetoes, the Commission aims to split the association agreement into two parts to isolate the “trade” component and facilitate ratification. The “trade” component would be presented as an interim trade agreement, falling under EU-exclusive competence, requiring only approval by qualified majority in the Council and the European Parliament. If ratification of the political agreement fails in one or more member states, the interim trade agreement would remain in effect.
The Commission has not officially finalized the ratification procedure.
“The legal basis of any final EU-Mercosur agreement will be determined after an assessment of the outcome of the negotiations. This will be reflected in the Commission’s proposal when it submits the agreement for ratification to the Council and European Parliament.
The following main eligible models have been used in recent agreements:
i) a ‘mixed agreement’ that requires approval by the EU and all its Member States on the whole agreement before it can fully enter into force; and ii) a single political package of two legally separated agreements that are ideally to be signed in parallel: one ‘mixed’ framework agreement, again requiring the approval by the EU and all its Member States before it can fully enter into force, and an interim agreement covering provisions falling under the exclusive competence of the EU, which would only require ratification by the EU.”
However, Uruguay’s document already mentions an “interim trade agreement.”
This approach would contradict the Council conclusions of May 22, 2018, where member states stated: “It is up to the Council to decide, on a case-by-case basis, on the splitting of trade agreements. Depending on their content, association agreements should be mixed. Those currently under negotiation, such as with Mexico, Mercosur, and Chile, will remain mixed agreements (15).”
It is therefore up to member states to accept or reject this forced passage proposed by the European Commission (16).
Sources:
- Factsheet Mercosur-European Union Partnership Agreement - December 6, 2024, published by the Brazilian government
- FAQ, DG Trade, European Commission
- Agreement Texts with 2024 Updates
- Summary of the Agreement Published by Uruguay’s Ministry of Foreign Affairs
Notes :
(1) This note does not examine all the modifications made to the text in this area, such as the restriction of the list of entities covered by public procurement market access commitments, the extension of the tariff reduction period on imports of electric vehicles by Mercosur, the strengthening of the automotive investment safeguard for Mercosur countries, or the flexibilities on export taxes in the critical materials sector in Brazil and the agricultural sector in Argentina.
This note also does not cover aspects related to the enhanced cooperation fund of €1.8 billion that has been announced.
(2) “Acts or omissions that would materially defeat the object and purpose of the Paris Agreement (Articles 764(1) and 77153). In the EU/United Kingdom Trade and Cooperation Agreement, the Paris Agreement is enshrined as an essential element under Title II, “Basis for Cooperation”. In the EU / New Zealand Trade Agreement, the Paris Agreement is raised as an essential element in Chapter 19 on TSD, as well as in the Final Provisions (Chapter 27) in a provision relating to “Fulfilment of obligations”. See Mathilde Dupré and Stephanie Kpenou, Making trade agreements conditional on climate and environmental commitments, June 2023
(3) It is possible to take “appropriate measures” in the event of human rights violations, particularly under the Cotonou Agreement with the African, Caribbean and Pacific (ACP) countries. These measures include the suspension of development aid and/or technical cooperation in response to very serious violations of democracy and human rights (Article 96). See also the economic partnership agreement between the EU and the CARIFORUM States of 2008, which refers to the “essential and fundamental” elements of the Cotonou Agreement, namely human rights, democratic principles, the rule of law and good governance.
(4) FIDH, Vietnam Committee on Human Rights, “Vietnam: crackdown on civil society intensifies”, Briefing paper for the 10th EU-Vietnam human rights dialogue, 6 April 2022; Human Rights and Democracy Network, “Recommendations for the revision of the European Union (EU) Guidelines on human rights dialogues with third countries”, December 2020; “EU ‘ignoring’ its Human Rights Clause”, Politico, 17 March 2004. The NGOs criticise the EU for not enforcing the clause on respect for human rights as essential elements with sufficient firmness. For example, no benchmark has been established to judge whether countries are respecting human rights. The NGOs also point to the lack of effectiveness of human rights dialogues, which have failed to bring about significant changes when they should be focused on results, concrete cooperation and more active participation by civil society.
(5) Rapport au Premier ministre, Provisions and potential effects of the trade part of the Association Agreement between the European Union and Mercosur on sustainable development, September 2020, p. 14 and 15: “the effectiveness of the “human rights and democracy” clause has been limited by the preference for incentives over the threat of sanctions. Political dialogue, as the “preferred form of preventive action”, and any “reporting procedures” aimed at making public a partner’s misconduct, have proved limited in impact, particularly in Africa”; because “human rights” clauses have done little to advance these values and practices in the hundred or so countries around the world covered by agreements with the EU”.
(6) The power of trade partnerships: together for green and just economic growth, COM (2022) 409 final, 22 June 2022.
(7) WTO | Disputes - Dispute Settlement CBT - Legal basis for a dispute - Types of complaints and required allegations in GATT 1994 - Page 2
(8) Marine Colli, Mathilde Dupré and Stéphanie Kpenou, A quand la fin des importations de viandes issues d’animaux dopés aux antibiotiques activateurs de croissance ? Enquête sur l’absence de mise en œuvre d’une mesure miroir essentielle pour la santé, June 2024
(9) "Environmental mirror measures : need and technical feasibility. A pesticides case study. Proposals for the operational implementation of environmental mirror measures", Veblen Institute, FNH and European Environmental Bureau, June 2023
(10) The negotiation mandate given to the Commission in 1999, outlining the objectives and scope of the negotiations, remained secret throughout the entire negotiation process until it was leaked in 2019.
(11) Before the publication of content elements in 2019, the only publicly available information was Greenpeace’s dedicated website, which included documents related to the trade agreement in December 2017 and others related to the association agreement in October 2020.
(12) Decision in case 1026/2020/MAS concerning the failure by the European Commission to finalise an updated ’sustainability impact assessment’ before concluding the EU-Mercosur trade negotiations
(13) DG(SANTE) 2024-8087, Final report of an audit of Brazil carried out from 27 May to June 2024 to evaluate controls on residues of pharmacologically active substances, pesticides and contaminants in animals and animal products
(14) DG(SANTE)/2019-6681 Summary report of an audit by the Directorate-General for Health and Food Safety conducted in Canada from September 9 to 20, 2019, to evaluate the control systems in place governing the production of beef and pork intended for export to the European Union. Similar shortcomings had already been identified during a previous audit conducted in 2014. These were noted again during a follow-up audit conducted in 2022.
(15) Council of the EU, Draft Council conclusions on the negotiation and conclusion of EU Trade agreements - Adoption, Bruxelles 8 mai 2018, 8622/18
(16) ClientEarth, EU-Mercosur Association Agreement Governance issues in the EU trade decision making process, 2021.