Update: The EU-Mercosur Free Trade Agreement

In October 2020, Climate Alliance's General Assembly adopted a resolution calling on the European Council and the Members of the European Parliament to reject the EU-MERCOSUR Free Trade Agreement in its current form. Since then, universities, foundations, NGOs and other actors have been publishing new studies and statements on various aspects of the agreement on an almost monthly basis.

The agreement:
The agreement between the EU and the four Mercosur states, Brazil, Argentina, Uruguay and Paraguay, largely lifts tariffs between these regions on either side of the Atlantic while increasing import quotas. Exports of beef, soy, ethanol and iron ore from Mercosur to the EU will rise, as will exports of cars, machinery and chemicals from the EU to Mercosur. Swapping raw materials from the South for finished products from the North – this is a classic, imbalanced, post-colonial exchange.

Social resistance is forming
In December 2020, 120 Brazilian civil society organisations called the "asymmetric agreement that reproduces the colonial logic of perpetual suppliers of raw mate-rials and importers of industrial goods a real disaster".¹ On 15 March 2021, the transatlantic "Stop EU-Mercosur" network of 450 organisations from the EU and South America publicly called on their governments to stop the agreement.² On 17 March 2021, the EU Commission's "Sustainable Impact Assessment" of De-cember 2020, completed far too late, was derided by 180 economists as "flawed" and "misleading" and, on the same day, also criticised by the European Ombuds-man Emily O'Reilly as "bad administrative practice".³

Reactions in the political arena
In view of the headwinds – not least because of critical voices from France and the Netherlands as well as Austria’s veto – the EU Commission is internally reviewing the options of either splitting the agreement in such a way that the actual trade agreement, separated from "political" agreements, no longer requires the approval of the EU Parliament and the Council, or of drafting an additional protocol on deforestation and climate change. Legal opinions are sceptical of both options. In April 2021, the Ecologic Institute⁴ concluded that any additions must be legally binding parts of the agreement to be effective. Client Earth⁵ noted that the division of responsibilities between the EU and its member states after 20 years of negotiations was not covered by the 1999 mandate. An expert report commissioned by Misereor, Greenpeace and CIDSE⁶ called for transparent and democratic renegotiations. While the EU Commission is playing for time by referring to the legal review of the agreement in light of French and Brazilian elections in April and October 2022 respectively, President Bolsonaro is greening Brazil's image to the outside world, having sent, for example, the largest delegation to COP26 in Glasgow of any nation and promising forest protection. Within Brazil, however, he is further facilitating land grabs and deforestation. For his part, Lula, Bolsonaro’s contender for the presidency, announced his support for the agreement in a 15 November 2021 speech to the EU Parliament, provided it is improved and does not lead to a de-industrialisation of Brazil.⁷

Land consumption is on the rise...
Since at least 2020, numerous studies have shown that the agreement would drive land grabbing for cattle grazing, soy and sugar cane cultivation at the expense of the rainforest, the climate and the rights of indigenous peoples. Recent examples include documentaries by IWGIA on the risks to indigenous peoples⁸ and on Bloomberg Green regarding the practices of the meat company, JBS⁹. European chemical companies such as Bayer, BASF and Syngenta sell pesticides that are banned in Europe to the Mercosur countries, the residues of which return to us in imported agricultural products.^10,11,12 What the agreement means for methane emissions through increased livestock farming is no surprise and obviously not compatible with Brazil's "Global Methane Pledge" at COP26.

...and demand too
So far, too little attention has been paid to the six fold increase in bioethanol imports into the EU amounting to a 650,000 tonne quota annually. Of this, 450,000 tonnes are to be used for bioplastics and 200,000 unallocated tonnes will mostly go towards biofuels.¹³ The aviation industry has high hopes for the development of bio kerosene based on ethanol: in its RefuelEU Aviation Initiative, the Green Deal stipulates that at least 63% of European aviation industry fuel should be sustainable (known as Sustainable Aviation Fuel or SAF) by 2050.^{14, 15}  

The EU Commission has also set a target to increase the share of non-fossil sources in chemical and plastic products to at least 20% by 2030.¹⁶ Bioplastics production is expected to triple over the next five years.¹⁷ The agricultural land used for bioplastics will thus increase from 0.7 million hectares in 2020 to 1.1 mil-lion hectares in 2025 or by 57%, amounting to 10% annually.¹⁸

Conclusion
While the sale of banned pesticides that find their way back into the EU through imports is obviously not in the spirit of a sustainable transformation, replacing fossil fuels with biogenic materials seems innocuous or even good. As the amount of biogenic waste and renewable biomass in the EU will in all likelihood not be sufficient to meet Green Deal goals though, our reliance on biomass imports is likely to increase even further. The EU is thus making big promises and fulfilling them via externalisation at the expense of the rainforests, indigenous peoples and the world's climate. Climate Alliance’s resolution of 8 October 2020 calling on the European Council and Members of Parliament to reject the EU-Mercosur Free Trade Agreement in its current form is more relevant and necessary than ever.

Written by Dietmar Mirkes, former National Coordinator of Climate Alliance Luxembourg

Sources:

1. Misereor (9 December 2020): Frente de organizações da sociedade civil brasileira contra o acordo mercosul-ue, URL (in German): https://www.misereor.de/fileadmin/user_upload/2.Informieren/Welthandel/brasilianische-zivilgesellschaft-gegen-eu-mercosur-abkommen.pdf  (Accessed on 19/1/2022)
2. Stop EU-Mercosur (15 March 2021): 450 civil society organisation launch a coalition to stop the EU-Mercosur trade agreement!, URL: www.stopeumercosur.org (Accessed on 7/2/2022)
3. European Ombudsman (17 March 2021): Decision in case 1026/2020/MAS concerning the failure by the European Commission to finalise an updated 'sustainability impact assessment' before con-cluding the EU-Mercosur trade negotiations, URL: https://www.ombudsman.europa.eu/en/decision/en/139418 (Accessed on 7/2/2022)
4. Ecologic Institute (30 April 2021): Anpassungsmöglichkeiten des Mercosur-Vertrags im Bereich Nachhaltigkeitsanforderungen, Völkerrechtliches Kurzgutachten für das BMU – Endfassung
5. Client Earth (June 2021): EU-Mercosur Association Agreement. Governance issues in the EU trade decision making process
6. Misereor, Greenpeace + CIDSE (ed.) (May 2021): Rechtsgutachten und Vorschläge für eine mögliche Verbesserung oder Neuverhandlung des Entwurfs des EU-Mercosur-Assoziierungsabkommens
7. Jamil Chade (20 November 2021): Sob Lula, acordo fechado por Bolsonaro com UE será revisto, URL: https://noticias.uol.com.br/colunas/jamil-chade/2021/11/20/sob-lula-acordo-fechado-por-bolsonaro-com-ue-sera-revisto.html (Accessed on 20/1/2022)
8. Ricardo Verdum (ed. IWGIA) (August 2021): Mercosur-European Union Trade Agreement: Risks and Challenges for indigenous peoples in Brazil, Copenhagen.
9. Bloomberg Green (January 2022): How big beef is fueling the Amazon’s desutrction, URL: https://www.bloomberg.com/graphics/2022-beef-industry-fueling-amazon-rainforest-destruction-deforestation (Accessed on 24/1/2022)
10. Corporate Europe Observatory (13 October 2021): Stop the toxic trade!, URL: https://corporateeurope.org/en/2021/10/stop-toxic-trade (Accessed on 7/2/2022)
11. Public Eye (10 September 2020): Banned in Europe: How the EU exports pesticides too dangerous for use in Europe, URL: https://www.publiceye.ch/en/topics/pesticides/banned-in-europe (Accessed on 7/2/2022)
12. Larissa Bombardi (2021): Geography of Asymmetry: the vicious cycle of pesticides and colonialism in the commercial relationship between Mercosur and the European Union, University of Sao Paulo
13. Friends of the Earth Europe (December 2021): Ethanol expansion, Brussels
14. European Commission: DG Mobility and Transport (14 July 2021): Proposal for a Regulation on ensuring a level playing field for sustainable air transport, URL: https://www.europeansources.info/record/proposal-for-a-regulation-on-ensuring-a-level-playing-field-for-sustainable-air-transport/ (Accessed on 7/2/2022)
15. Chemietechnik (20 January 2021): Konsortium plant Produktion von nachhaltigem Kerosin in Europa, URL: www.chemietechnik.de/anlagenbau/konsortium-plant-produktion-von-nachhaltigem-kerosin-in-europa-106.html: Aireg (2019): Aviation Initiative for Renewable Energy in Germany e.V., URL: https://aireg.de/ (Accessed on 24/1/2022)
16. European Commission (15 December 2021): European Green Deal: Commission proposals to remove, recycle and sustainably store carbon, Brussels
17. Recycling Portal (7 December 2021): EUBP Conference 2021: The role of bioplastics within the European Green Deal, URL: https://recyclingportal.eu/Archive/69533 (Accessed on 21/1/2022)
18. European Bioplastics (2020): Bioplastics Market Development update 2020, URL:www.european-bioplastics.org (Accessed on 21/1/2022)