The EU-Mercosur trade agreement would not only acutely jeopardise rainforests, biodiversity, climate and human rights, but would also create a new right of action against the sustainability laws of the European Green Deal. This is the conclusion of a new study by Bread for the World, Misereor and PowerShift. The organisations are calling on the German government and the European Parliament not to sign the current text of the agreement. The agreement could be presented for signature as early as the summer.
"The agreed bans on export restrictions and the reduction of import tariffs unilaterally favour livestock farming, industrial sugar plantations and soya fields as well as mining in South America," summarises Thomas Fritz from PowerShift and author of the study. "It is precisely these industries that are primarily responsible for the destruction of rainforests, dry savannahs, the displacement of indigenous communities and pesticide poisoning in South America. However, they make hardly any contribution to job creation, poverty reduction and sustainable economic development." The agreement is also slowing down the socio-ecological transformation in the EU by facilitating the export of pesticides, some of which are highly toxic, and cars with combustion engines.
A heavy burden for the climate and human rights
In the renegotiations of the agreement between October 2022 and December 2024, the EU had sought stricter sustainability rules. However, the opposite has happened: "While the European Commission fiercely defended the tariff reductions for its own industry, it simultaneously abandoned any claim to a sustainable trade policy," criticises Armin Paasch, Misereor expert on trade and human rights. "The agreement still does not contain any sanctions against sustainability violations, but it does contain sanctions against the EU's sustainability requirements." The newly created compensation mechanism grants the Mercosur states a right to compensation if EU laws such as the deforestation regulation restrict their trade advantages. "The EU would permanently shackle itself when it comes to climate protection."
According to the study, the agreement would damage the automotive, mechanical engineering, metal and textile industries in the Mercosur states. "This threatens further deindustrialisation, job destruction and more social inequality in South America, which has contributed significantly to the rise of right-wing populist parties in Argentina and Brazil, for example," warns Sven Hilbig, trade expert at Bread for the World. As a result of the elimination of import duties on 91 per cent of all products, the impact assessment commissioned by the European Commission also expects industrial production in Mercosur to shrink. "'Partnership agreement' is therefore a fraudulent label for this agreement, which would only deepen the economic divide between the EU and Mercosur," says Hilbig.
The EU Commission wants to present the agreement to the member states as early as the summer. There is the threat of a procedural trick: the trade part could be outsourced, bypassing national parliaments and enabling approval in the Council with a simple majority. This weakens democratic control. There is also the threat of binding human rights and climate clauses being removed - with the result that even the most serious violations would no longer allow the agreement to be suspended.
