Mercosur, the world's largest trade agreement suspended in the Amazon
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Mercosur, the world's largest trade agreement suspended in the Amazon

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The trade agreement between the European Union and Mercosur (Brazil, Argentina, Paraguay and Uruguay) is the largest trade treaty ever negotiated. Signed a year ago, the ratification of this nearly €17 trillion agreement could fail because of the environmental and human abuses of Brazil's Bolsonaro in the Amazon. A few days ago, just after seeing a green wave in the municipal elections, French President Emmanuel Macron made a point of solemnly affirming that France will not conclude " any trade agreement with countries that do not respect the Paris Agreement "; thus making direct reference to the administration of Brazilian President Jair Bolsonaro who is pursuing an aggressive policy in the Amazon without any restraint.

The finalisation of the trade agreement between the European Union and Mercosur was announced at the G20 meeting in Japan in June 2019. Since that event, it has come up against growing opposition from European national governments, European parliamentarians and non-governmental organisations, not to mention several organisations active in Latin America, all of which are jeopardising its ratification.

At the heart of this resistance is the EU's strong dissatisfaction with Brazil's destructive environmental policies and the rapid increase in the rate of deforestation under President Jair Bolsonaro. One of the biggest opponents of the trade deal to date is the French government of Emmanuel Macron. The day after municipal elections saw the Greens win in several major cities, the French president suspended negotiations with the EU-Mercosur bloc. " We will not conclude any trade agreement with countries that do not respect the Paris Agreement, ," Macron said, making clear reference to Jair Bolsonaro and the Brazilian government. The French president also insisted on the creation of the crime of ecocide crime, a crime against the environment, which should be tried by the International Criminal Court.

Fearing the position of the President of the Republic, French and Brazilian businessmen (in particular Brazilian agro-industrial interests) are putting pressure on their respective governments to ease tensions between the two countries in favour of the Mercosur-EU trade agreement. Diplomats from both countries participated in a video conference on Tuesday 7 July, during which they reviewed their bilateral agenda.

France is one of the largest international investors in Brazil. In 2018, the Banque de France revealed that French companies had invested 23.7 billion euros in Brazil, according to Valor Econômico.

If approved, the EU-Mercusor Treaty - the largest global agreement of its kind ever negotiated - will create an open market encompassing 780 million people with a Gross Domestic Product (GDP) of €16,800 billion between the two blocs. This pact is of great value to both sides: EU countries will see most export tariffs to Mercosur eliminated, including for cars and chemicals; while the South American bloc, made up of Brazil, Argentina, Paraguay and Uruguay, will benefit from an exemption from import duties on 81.7% of agricultural products.

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In the case of Brazil, orange juice, fruit and vegetable oils, among others, will see their tariffs eliminated, while beef, pork and poultry, in addition to sugar and ethanol, will be entitled to preferential access to the European market through quotas.

When the agreement was signed last year, Brazil's Minister of Agriculture, Tereza Cristina, said it would promote the modernization of the country's agribusiness sector: " [It is] our products that are sold in this market of more than 700 million people; I think it's a great opportunity ".

However, the treaty, signed but not yet ratified, came under rapid attack as President Bolsonaro aggressively dismantled most of Brazil's environmental protections. Environmental and human rights NGOs, as well as the protectionist interests of European producers and their lobbies, put pressure on EU national governments to reconsider the agreement.

Opposition to the agreement is growing

France is not alone in its opposition. The Dutch parliament passed a motion against the EU-Mercosur trade agreement on the grounds that it could lead to unfair competition for European farmers and accelerate deforestation in the Amazon. The same objections were raised by the governments of Austria, Belgium (Walloon region), Ireland and Luxembourg, as well as dozens of MEPs.

Critical pressure increased last week when 265 European and Latin American organizations sent a letter to German Chancellor Angela Merkel and the 28 EU Member States asking them to reject the Mercosur agreement. Last month, Client Earth and the International Federation for Human Rights (FIDH), among other non-governmental entities, filed a formal complaint with the European Commission calling for the treaty to be suspended.

The organizations condemn the Bolsonaro government's position on the environment and human rights, and argue that the trade agreement will worsen environmental destruction and the climate crisis with the dramatic expansion of commodity monocultures, including soybean production, in the Amazon rainforest.

Civil society intervention

Submitted to the EU Ombudsman - a channel through which civil society can challenge the functioning of the European Commission - a memorandum states that the EU executive body signed the agreement without having carried out a full assessment of its future environmental impacts.

The European Commission has ignored its legal obligation to ensure that the trade agreement with the Mercosur group of South American countries will not lead to social, economic and environmental degradation and human rights violations, " the document says.

When the agreement was signed in the summer of 2019, the European Commission had not yet completed the final report of the Sustainability Impact Assessment (SIA) on Mercosur's environmental performance. Finally published last February, the SIA " does not include recent data on the deforestation rate in Brazil, nor recent information on changes to its legal forest structure, " said Client Earth and its partner entities. If the EU Ombudsman agrees to open an investigation, the European Commission will have three months to respond.

Burnt land in the municipality of Canarana, Mato Grosso State, Brazil, in 2014. Mato Grosso and Pará were the first Brazilian states to engage in deforestation during the 2018/2019 baseline period. Image courtesy of Na Lata / IPAM.

Concern about deforestation

The process of developing the treaty has been very complex and challenging; it has already taken 20 years to negotiate the agreement. The legal text of the agreement is not yet ready and, once finalised, it will have to be translated into the 24 official languages of the European Union. Only then will Members of the European Parliament be able to vote on the economic and commercial parts of the Treaty. The political part, which covers subjects such as the environment and human rights, must be approved by each of the 28 parliaments of the EU member nations.

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As a first step, the pact, which is an association agreement [composed of three pillars: trade, political and cooperation], needs to be ratified by the countries to enter fully into force. However, if the European Commission, with the support of the European Parliament and its member states, separates the free trade agreement from the association agreement, they can try to implement its trade part and leave aside the political issues of the pact, which include the environment - i.e. implement the agreement provisionally. It all depends on what the European Commission will propose to the Parliament, " says Filipe Gruppelli Carvalho, an analyst with the Eurasia Group, a US political risk analysis consultancy with offices in five countries, including Brazil.

According to a recent Eurasia report, " if deforestation in the Amazon declines, which is unlikely, and if there is no significant deviation from Brazil's [Paris Accord] climate commitments, Germany is likely to use its influence and indirect negotiations to gain support for the pact from France and other skeptics. Although Germany is one of the biggest supporters of the trade deal, Georg Witschel, who is leaving his post as ambassador to Brazil and returning to Berlin, said in June: " Our government knows that it is increasingly difficult to get a majority in our Congress and the European Parliament with the increasing deforestation in Brazil. ".

The Brazilian Amazon - the largest rainforest on Earth - has seen 14 consecutive months of increasing deforestation since Bolsonaro came to power. Deforestation in the Brazilian Amazon is currently 83 per cent higher than last year and has reached levels not seen since 2008.

Forest fires in Candeiras do Jamari, in the state of Rondônia, in 2019. Early forecasts indicate that deforestation is worse this year and that the Amazon is drier, which means that forest fires could be much worse than last year in August and September. Image © Victor Moriyama / Greenpeace.

All eyes are on the upcoming fires in the Amazon.

Filipe Carvalho highlighted another important factor likely to enter into treaty discussions in the coming months: " EU technicians, bureaucrats, and politicians will be closely monitoring what happens in the Amazon during the dry season, which has just begun. Depending on the news, there will be a growing backlash against the agreement ".

The National Space Research Institute of Brazil (INPE) recently reported that, as of June 2019, 2,248 fire outbreaks had been recorded in the Amazon region. The fires were mainly concentrated in Mato Grosso and Pará states that lead the deforestation rankings for 2018/2019. Most forest fires in the Amazon are not natural but started by humans to expand cultivated land and pastures. " Fires are associated with deforestation. In order to reduce the number of fires, we need to reduce the amount of deforestation. What we have seen is just the opposite [under Bolsonaro]. Deforestation is increasing every month compared to last year, when it increased a lot compared to previous years," says Ane Alencar, scientific director of IPAM, the Institute for Environmental Research in the Amazon.

Bolsonaro's response to date has been an advertising campaign to be launched in Europe to counter the environmental concerns of consumers and politicians. Furthermore, the administration has shown no sign of backing down from its policies of environmental deregulation and disengagement of protection agencies. Last April, for example, Environment Minister Ricardo Salles told a ministerial meeting that the Covid-19 pandemic provided an ideal opportunity to " let the cattle through ", diverting attention from the government's cancellation of socio-environmental regulations.

Minister Salles also recently appointed a business executive with no environmental experience - whose assets have been frozen since 2014 by the courts due to alleged administrative misconduct - to head IBAMA's office in the state of Santa Catarina (IBAMA is the country's environmental agency).

In another missed opportunity to curb the current increase in forest destruction, the Ministry of Agriculture (MAPA), whose sector is closely linked to the escalation of climate change, has launched its strategic plan 2020-2027, which outlines the ministry's strategies for this period.

According to Tasso Azevedo, a forestry engineer and coordinator of the System for Estimating Greenhouse Gas Emissions (SEEG) of the Climate Observatory, a non-profit organization, the new DAFA plan " ignores or barely scratches the main challenges facing agricultural production, such as the fight against climate change and soil and water conservation... But the most incredible thing is the total absence of any reference to deforestation ". According to experts, the agricultural plan does not bode well for the ratification of the EU-Mercusor trade agreement.

Soybean monoculture in Brazil. Its main by-product is soybean oil, which is widely consumed around the world. South American soybean oil will see its import tax into the EU lifted if the free trade agreement is ratified. Image courtesy of Alceu Mauro Denes

More than 95% of the deforested areas in Brazil are occupied by agricultural activities (and more than 99% of deforestation has strong evidence of illegality). Agriculture is therefore [primarily] responsible or the direct beneficiary of deforestation, " said Azevedo. " The MAPA plan ignores the need to disconnect Brazilian agribusiness from deforestation by concretely reducing deforestation rates and establishing a strong production traceability program. Instead, it promises a communication program to counteract negative news about Brazil. ".

DAFA responds that "... it is not responsible for combating deforestation, a role that falls to the Department of Environment. Although the [deforestation] program is relevant and the federal government, particularly with the structuring of the Amazon Council, is acting to curb illegal deforestation, it would be a mistake to include in the Ministry of Agriculture's strategic plan an issue that is not within its jurisdiction ".

The outcome of the standoff between Brazilian Bolsonaro - who is dedicated to commodity growth at all costs - and the environmentally sensitive EU remains uncertain. But many analysts believe that ratification of the trade agreement, if it takes place, will require complex manoeuvres and concessions. Ratification is expected to take place in 2021 at the earliest, but it could take much longer. And the whole deal could go up in smoke if this year's Amazon fires in August and September far outstrip those of 2019.

Jenny Gonzales, journalist Mongabay

The original English version of this article was published by Mongabay (CC)

Header image: Charlie Hamilton James/National Geographic

 

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