Climate Alliance event | 17.09.2020 | Online

Preconditioning the ratification of the EU-MERCOSUR trade agreement – what needs to change?

Building on our June webinar, this event continued the open dialogue between civil society and policy makers about the EU ratification of the MERCOSUR free trade agreement. While the recently published Sustainability Impact Assessment of this agreement emphasizes that deforestation in the Amazon can be halted only “provided that sound policies are in place”, opposing trends continue to unfold under the current Brazilian government. For that very reason, refusal to ratify the agreement is growing in the EU with Austria, France and the Netherlands strongly opposing it. Bringing the voices of both our indigenous partners and the financial sector, we asked: what needs to change to turn things around in the Amazon and for the Mercosur agreement to reduce deforestation rates?

This webinar was organised in cooperation with the Rainforest Foundation Norway and Society for Endangered Peoples. Below are the highlights of the webinar, while a full recording is available online here (in English). 

Kretã Kaingang set the scene, reminding about the gravity of the situation in Brazil; a country with a government that does not support the fight against the forest fires, but in contrast is accusing NGOs of lying about the ongoing environmental destruction. Kaingang stressed the necessary support from Europe to prevent further ecosystem losses. For him and the Indigenous Peoples he represents, the EU-MERCOSUR free trade agreement opposes any climate goal, and instead would finance even more fires, deforestation and mining. He believes that since the current government never kept his word, only international commercial pressure, such as a European boycott of Brazilian products, could yield positive effects and force the authorities to better protect the environment.

Graham Stock (BlueBay Asset Management, see slides here) explained that since June, a Policy Dialogue on Deforestation exists between the Brazilian government and investors, who view deforestation as a major risk and the protection of existing ecosystems as increasingly important. According to this high level dialogue, some people in the administration and Congress are more sympathetic towards climate issues than the President. This format could inspire other investors, using the cost of financing as leverage to improve transparency and accountability.

Both panelists made clear that prior to the ratification, certain preconditions need to be implemented. See recommendations from Brazilian civil society in full here and from the investors’ side here. The main points are the following:

  • Moratorium on deforestation in the Amazon
  • Increased penalties for environmental crimes and deforestation, including freezing the assets of the 100 worst criminals
  • Implementation and respect of Brazil’s Forest Code
  • Strengthening Brazil’s agencies tasked with enforcing environmental and human rights legislation so they can carry out their mandates effectively
  • Demarcation of indigenous and quilombola lands
  • Legal framework for supply chain transparency, public access to data on deforestation, forest cover, tenure and traceability of commodity supply chains
  • Application of the Action Plan for Prevention and Control of Deforestation in the Legal Amazon

In the subsequent political discussion, Rainer Handflinger, Mayor of an Austrian municipality, highlighted the importance of pressure from the local level to the national level about the ratification of free trade agreements through a Resolution from European municipalities against the MERCOSUR agreement. Irmi Salzer (Deputy Head of the cabinet of the Austrian Ministry for Environment) also stressed that the climate crisis is a global one, for which we need global solutions. Ratifying the EU-MERCOSUR agreement without conditions is inacceptable for both, climate goals and indigenous rights!

Saskia Bricmont (MEP, Greens) confirmed that an environmental impact assessment commissioned by the Greens showed the huge human and environmental impact this agreement could have. Recommendations on these topics also figure in the official Impact Assessment, as the current safeguards are entirely insufficient. Despite all this, the Commission made clear that they won´t  reopen negotiations, which means that the only option is to increase the public pressure asking for a rejection of this agreement and the inclusion of enforceable environmental and social safeguards in European trade.

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