Belgium, (Brussels Morning Newspaper) After 20 years of discussions, the EU and Mercosur announced the signing of a free trade agreement on June 28, 2019. If put into practice, the pact will exacerbate deforestation, human rights abuses, and animal cruelty, devastating livelihoods for workers, farmers, and indigenous people in South America as well as Europe. The contract sends the message that violations of human rights connected to the supply chains at issue are permissible.
The deal between the EU and the four Mercosur nations—Brazil, Argentina, Uruguay, and Paraguay—reduces import limits while virtually eliminating tariffs between these countries on either side of the Atlantic. Exports of vehicles, machinery, and chemicals from the EU to Mercosur will increase, as will exports of cattle, soy, ethanol, and iron ore from Mercosur to the EU. Trading goods from the North for raw materials from the South is a typical example of an unbalanced post-colonial exchange.
Following strong pressure from civil society several Member States – including Austria, France, Belgium, and Luxembourg – which have expressed their concerns in the European Parliament, the ratification procedure is on hold.
Brussels Morning discussed at length and in detail a fundamentally important subject with Dr. Claudia Horn, with whom we agree that needs to be further analyzed and re-addressed in the Parliament.
Claudia Horn is a sociologist and post-doctoral fellow at the London School of Economics where she wrote her Ph.D. on green capitalism and international cooperation, based in Brazil. Her experience includes working as a project manager for the Rosa Luxemburg Foundation’s New York office and as an advisor to the municipal government of the Socialism and Freedom Party (PSOL) in Belém, Pará, Brazil. A native of Dresden who has worked on international social justice for 13 years, Claudia focuses on power structures, regional inequalities, and peripheries in the context of global capital accumulation.
AK: The agreement lowers social and environmental standards for workers, farmers, and people in favor of transnational corporations and investors’ profits. Can countries cope with the needs of Brussels?
CH: Indeed, the agreement does not reflect the needs of EU or Mercosur workers and citizens but a few powerful corporate interests who would benefit from the deal. Proponents try to greenwash the deal, arguing its sustainability chapter would improve standards and that the cooperation would boost the green economy of renewables. But the opposite is true. For the EU business sector, the deal offers a green fix, a way to displace the costs of environmental restrictions and the emissions generated through production. For instance, the European car sector pushes for the deal because it opens a new market for engines and cars that are becoming difficult to sell in Europe and the Mercosur mining sector for lithium and aluminum essential for electric cars. It is rather investors in mining than renewable energies that are behind the agreement. It is similar to the Mercosur countries which have a strong agribusiness lobby in favor of the deal that could advance under the neoliberal economic policy of the Bolsonaro government in Brazil.
The end of the Bolsonaro government, the return of Luiz Ignacio Lula da Silva as President in Brazil, and the broader left-wing resurgence in Latin America open important opportunities for regional integration, socioenvironmental transformation, reindustrialization, and energy transition. While some present this as a more secure starting condition for EU-Mercosur, left forces to worry that the deal with Europe will impede these plans pushing for trade liberalization and potentially open key public sectors such as energy, water, public transportation, and facilities for European companies searching new profits.
Brazil, Argentina, and Uruguay are already the three main countries from which the EU imports beef. With Paraguay, the Mercosur countries already account for almost 80% of all beef imports into the EU. The agreement seeks to increase these imports, locking in a toxic, unsustainable monoculture agribusiness model in the Mercosur countries and accelerating their industrial disadvantage. The deal will limit governments’ control and efforts and plans to revitalize sectors like the pharmaceutical industry.
In this sense, the sustainability impact assessment commissioned by the EU commission has affirmed a job loss of around four percent in Mercosur countries’ industry sectors. This loss cannot easily be compensated, especially not in a highly mechanized and precarious agribusiness sector. It is family agriculture that employs 80% of the people in this sector and also feeds 70% of Brazilians. Impact studies point to further rising inequality, food insecurity, deindustrialization, and environmental devastation.
AK: Numerous studies have demonstrated that the agreement would result in land grabbing for the development of soy, sugar cane, and cattle grazing at the expense of the rainforest, the climate, and the rights of indigenous peoples. How do you think the agreement can be upgraded to ensure sustainability?
CH: Let’s be clear, this is not an agreement for climate, or sustainable development, but for trade expansion. I am convinced that upgrading does not resolve or address the core socioenvironmental problem. The agreement reflects and reinforces a colonial model of primary goods exports from Mercosur and industrial exports from the EU. After all, a commercial deal’s purpose is the facilitation of commodities trade, in this case, especially through increased quotas of beef, etc., the elimination of tariffs, and so-called non-tariff barriers to trade. These barriers are essentially environmental and health regulations. For instance, the provisions include measures to preapprove increased meat exports; reduce food safety inspections by the importing country; and weaken the authority of governments to preemptively block imports if they suspect food safety problems.
Brazil’s Lula government has called for adjustments to the deal’s text, especially in the intellectual property, industrial, and environmental sections. But the EU commission considers the agreement ready for ratification. These negotiators act as if the exit of the Bolsonaro government and its commitment to indigenous and environmental issues could guarantee the sustainability of supply chains. By contrast, the agribusiness sector is even stronger than before in Congress and many infrastructure plans for commodities export through the Amazon promise land conflicts in the next years. If they make a compromise and add amendments, these won’t change the nature of the deal.
Affected sectors in all countries—labor organizations, indigenous and traditional populations, small farmers, and fishers—have been excluded from the negotiations. The agreement makes mention of indigenous rights but waters down their right to consultation and did not meaningfully include their demands. Labor representatives have told me that especially Bolsonaro in Brazil has advanced the negotiations without any access to information. Activists resorted to their partners in Argentina in Europe to follow the deal. This April, 450 organizations signed a letter against the agreement. In other words, no adjustments can solve the complete lack of democratic legitimacy of the agreement and the complacency of European negotiators with Bolsonaro’s repressive regime and corporate lobbyists.
The problems of the EU-Mercosur agreement can only be solved by rejecting the agreement and its underlying false reciprocity altogether and fundamentally changing the EU trade policy. For instance, the current agreement has a limited focus on commerce and does not guarantee rights for South American workers and migrants in Europe, or any form of historical compensation for European colonialism in South America. Sustainable trade policy needs to include these concerns, be transparent, and recognize the autonomy of the people of the global South.
AK: How do you think the human rights violations associated with the supply chains involved in the deal came to be initially included in the first place? Who lobbied for such a bad deal?
CH: The deal does not directly include these violations and encourages social and environmental protection, e.g. in the sustainability chapter. As I said, given its purpose of facilitating trade, it lowers standards to the least common denominator, which is not unique to this FTA. Moreover, violations of the sustainability chapter are not part of the arbitration mechanism so accountability is weakened.
Especially the agrichemical and car industry lobbies and their neoliberal think tank allies have been pushing for the deal, as well as the mining sector. Companies such as Bayer and BASF would profit from the deal because of the elimination of tariffs on exporting pesticides to the farmers in Mercosur countries. Stringent health and environmental standards—inspections, liability clauses, the possibility of import stops—are all an impediment to their business objectives.
