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25th Feb 2024

EU Commission 'failed' on assessing Mercosur trade deal

  • The ratification process is facing reluctance from some EU countries, such as France and Austria, notably over concerns about deforestation of the Amazon rainforest (Photo: Neil Palmer (CIAT))

The European Commission was guilty of "maladministration" in failing to make a timely assessment of any environmental impact from the EU-Mercosur trade deal before finalising negotiations, according to the European Ombudsman.

The EU and the Mercosur bloc of South American countries (Brazil, Argentina, Paraguay and Uruguay) reached the agreement in June 2019, after two decades of negotiations.

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But the preliminary impact report - carried out by the London School of Economics - was only published in February 2020, with a final version released in July 2020.

"The EU projects its values through its trade deals. Concluding a trade agreement before its potential impact has been fully-assessed risks undermining those values and the public's ability to debate the merits of the deal," ombudsman Emily O'Reilly said in a statement.

"Not finalising the necessary assessment leaves the EU open to criticism that it is not taking seriously all concerns raised," she added.

The inquiry follows a complaint launched by five environmental and human rights organisations last year.

In its conclusions, published on Friday (19 March), the EU ombudsman does not make any recommendations, since the negotiation process has already ended.

However, it urges the EU Commission to change its conduct in the context of future trade negotiations, ensuring that the potential impact on the environment and other issues are fully assessed before any trade deal is agreed.

Similarly, the EU ombudsman found in 2016 that the EU executive should have undertaken a human-rights assessment before the EU-Vietnam trade agreement was concluded.

In February, Brussels committed to make sustainability the cornerstone of its trade agreements.

Environmental disaster 'waiting to happen'

The EU-Mercosur agreement is currently subjected to a legal revision, a preliminary step before it is translated in all EU and Mercosur official languages and submitted to the European Parliament and member states for its ratification. In the European Council, unanimity is required.

However, the ratification process is facing reluctance from some EU countries, such as France and Austria, notably over concerns about the deforestation of the Amazon rainforest and the intensive agro-industrial model of Mercosur countries.

Mercosur's biggest exports to the EU in 2019 were agricultural products, such as soya, coffee and meat.

If the deal is ratified, some agricultural goods produced in the bloc, like cereals or wine, would benefit from increased market liberalisation, but EU beef, rice, poultry and sugar would come under pressure.

Meanwhile, green groups warn that the implementation of this deal could lead to an increase in the EU's consumption of beef, soy, ethanol and other agricultural goods - further fuelling deforestation and human-rights violations of Indigenous communities.

"The EU-Mercosur deal is an environmental disaster waiting to happen. National governments must now reject this deal, or else they make themselves complicit in accelerating the destruction of the Amazon and other vital ecosystems," Jürgen Knirsch from Greenpeace told EUobserver.

Earlier this month, a coalition of more than 450 civil society organisations call on the EU and Mercosur countries to withdraw the agreement, arguing that it is an outdated 20th-century model of trade that has already proven to fail the planet.

MEPs divided

The European Commission is currently negotiating with Mercosur countries on "pre-ratification conditions," such as deforestation and climate change commitments, under the 2015 Paris Agreement.

This trade agreement is also one of the key priorities for the Portuguese presidency, which has previously argued that Europe's credibility is at stake should the bloc fail to ratify the deal.

Meanwhile, MEPs remain divided. Some say the trade deal is not compatible with the Green Deal, while others warn that geopolitical competitors will engage with South American countries if the EU does not.

"What would be the environmental and social consequence of withdrawing from the agreement and increasing the US and Chinese trade in the area - this is the key question," said German MEP Sven Simon (European People's Party), during the last debate on this issue in the parliament's trade committee.

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