The Mercosur deal — why would the EU trust a man like Milei?

The EU’s climate hypocrisy is exposed yet again: while Argentina’s far-right president Javier Milei withdrew its delegation from the UN climate summit COP29 and threatens to exit the Paris Agreement, the EU is turning a deaf ear and rushing to finalise the climate-wrecking EU-Mercosur trade deal.

Despite widespread opposition from civil society, farmers and unions on both sides of the Atlantic, the European Commission is aiming to seal the deal during the Mercosur summit in Uruguay on Thursday and Friday (5-6 December) — precisely at the moment when the climate-denier Javier Milei will take over the Mercosur bloc’s rotating presidency.

The deal is set to advance Milei’s destructive economic reform plans. Like his ideological partner – former far-right Brazilian president Bolsonaro – Milei combines bolstering corporate power with rolling back environmental, democratic and social rights. 

Under Milei’s administration, Argentina’s poverty rate has soared to almost 55 percent due to austerity cuts in public services.

Likewise, his ‘chainsaw’ policies dissolved the ministry of environment and eliminated funds for the protection of native forests.

As a result, Argentina’s Forest Law has been left without its main monitoring and action tools, opening the door for further deforestation of the Chaco forest, South America’s second-largest forest. Like the Amazon, the Chaco forest is considered of global importance for its role in mitigating the effects of climate change, acting as one of the planet’s largest carbon sinks. 

Milei’s environmental rollback coupled with the EU-Mercosur deal could cause critical global ecological spillovers, as it will further jeopardise the Chaco Forest and other critical ecosystems in the region.

Studies have shown the EU-Mercosur trade deal could accelerate deforestation by 25 percent. This creates a clear conflict with the apparent ambition of the EU’s deforestation legislation (EUDR), the implementation of which has already been delayed for a year and risks being dismantled by the EU’s conservative and far-right political groups. 

Bolstering the fossil fuel industry is another key pillar of Milei’s libertarian reforms, spearheaded by the new Incentives Regime for Large Investment (RIGI). The RIGI regime aims to boost major large-scale investments in oil, gas, mining, agribusiness and forestry sectors, by granting big corporations far-reaching economic benefits, including massive tax-breaks.

But while extractive industries profit from these generous incentives, the disastrous reform package does not include any accountability for these industries’ social or environmental impacts, nor does it set out any requirements for companies to submit environmental impact studies. 

Even worse, the RIGI includes the notorious ISDS (Investor-State-Dispute-Mechanism) mechanism allowing corporations to sue provincial governments in secretive corporate courts if they believe that public policies, including environmental protection measures, interfere with their profits.

Negotiations are based on a text from 25 years ago and totally out of touch with the reality of the climate crises we face today

The ISDS system has been criticised by international bodies like the IPCC and the UN for its damaging effect on climate action and human rights. Most alarming is that  Argentina is already the world’s most sued country in investor-state disputes, including claims made by major fossil fuel giants like Total Energies and BP.

The creation of a special “Security Unit”, tasked to mobilise military forces in extractive regions, underscores the Milei administration’s intent to suppress social resistance to these destructive projects and criminalise grassroots protests. 

Milei the man to do business with?

And despite all this, the EU, which claims to be a champion of the green transition, is willing to do business with the climate-sceptic far-right president Milei by concluding the EU-Mercosur trade deal.

The deal reinforces neo-colonial trade relations and risks pushing the South American region further into ecological collapse.  Once finalised, the deal will boost exports of agricultural products such as beef, soy, sugarcane and pesticides, including hazardous pesticides banned in the EU.

These commodities are the biggest drivers of deforestation, greenhouse gas emissions and biodiversity loss, and threaten Indigenous communities, who already bear a disproportionate burden of the climate crisis. 

The EU is now trying to greenwash the deal with an environmental annex, but this will not address the long-term destructive impacts of this obsolete trade deal.

Negotiations are based on a text from 25 years ago and totally out of touch with the reality of the climate crises we face today.

But Milei’s corporate-friendly policies and the EU’s business-driven agenda to boost its global competitiveness appear to be the uncontested yardstick and prevail over the adverse impacts of the EU-Mercosur deal.

This is a big win for corporate lobby groups who have been pushing for the EU-Mercosur trade deal. But this shortsighted ‘corporate-first’ agenda comes with detrimental costs and could even provoke long-term economic damage, as has been proven by recent scientific studies.

Milei’s 'economic shock therapy' combined with the outdated EU-Mercosur deal is a recipe for climate disaster.

In the face of growing global far-right tendencies derailing climate action and intimidating civil society, partnering up with Milei and empowering his agenda, spells a dangerous shift away from the EU’s international climate, human rights and sustainability commitments.

If the EU is serious about its economic and climate resilience, it needs to seriously recognise the associated costs of the climate crisis, and redirect trade policy efforts and funds into creating sustainable and regenerative economies.

Likewise, the EU also needs to address its historical responsibility for the climate crisis and colonial legacy. Burying the EU-Mercosur trade deal, once and for all, will be a modest but critical step in the right direction.