Last June, after 20 years of negotiations, the EU signed a trade agreement in principle with the South American trade bloc Mercosur, the fifth-largest economy in the world. That deal would open a large market to Mercosur’s not suspended member states – Argentina, Brazil, Paraguay, Uruguay – multiplying the current trade value of €88 billion.
Up to 90 percent of tariffs on goods would be eliminated on both sides. Europe would save on goods such as wine, spirits, chocolate, biscuits, tinned peaches, and olives, and import a quota of 99 tonnes of beef per year, as well as 180’000 tonnes of sugar and 100’000 tonnes of poultry. The EU hopes the deal would expand its access to South American telecommunications, transport, and financial services, and expects it to make the region more attractive to American, Japanese, and South Korean markets.
Protestors of the deal from the farming sector worry that South American beef imports would hurt local European farms. One concern is described by The Irish Times as Brazil’s reputation for “meat fraud”, since the country does not follow the same ethical and food safety standards imposed under EU regulations.
While the EU claims that both parties would have the power to put regulations on imports should any harm come to local markets, it is unclear how long these measures can be put in place and exactly each sector would be protected.
Despite intentions to expand the high-carbon beef industry, the deal explicitly references the Paris Climate Agreement with commitments to fight climate change and to transition to a “sustainable, low carbon economy”. But to meet this goal, rigorous enforcement of regulations on the quotas would need to be put in place whether or not harm does come to local markets.
As for the deal’s sure environmental degradation, Mercosur members would have to further eat into their cattle ranching land. In Brazil, climate change denier and deforestation enthusiast President Jair Bolsonaro naturally contradicts environmental protection and sustainable development efforts. He has threatened to tear down the Amazon rainforest to make room for more beef farms, and is widely condemned by international media for intentionally starting this year’s Amazonian wildfires with his policies.
Since 1978 over 780’000 square kilometres of Amazonian rainforest has been destroyed across Brazil, Peru, Columbia, Bolivia, Venezuela, Suriname, Guyane, and French Guiana for cattle ranching, soy farms, mineral excavations, palm oil extractions, urban planning and illegal logging projects. According to satellite data, Brazil has by far lost the most tree cover in comparison to other countries which share the Amazon.
To come into effect, the draft Mercosur Agreement must be ratified by the European Council and the European Parliament, as well as by the Mercosur Parliament. This may be a very long process.
Irish Taoiseach Leo Varadkar said his government will block the deal, unless Brazil takes steps to protect the Amazonian rainforest. Varadkar previously said his government would assess the financial impact of the deal, but supported the deal’s bid for billions in savings on trade duties for Irish companies.
The opposition party Sinn Fein led political support to reject the deal. A majority in the Dail voted against it and called for the Irish government to form alliances with other EU members to do the same. However, the deal must pass under the EU Trade Council for any opposition to be considered in law.
In Austria, the draft deal was rejected by the national Parliament EU’s subcommittee. Together with Ireland, they may use their veto in two years’ time to block the EU-Mercosur deal.
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