Press release: 10 December 2020

EU reply ignores social, environmental impact of South American trade deal

The European Commission has failed to demonstrate that it seriously considered the social and environmental impact of the EU’s proposed trade deal with the ‘Mercosur’ group of South American countries, environmental and human rights groups say.

In July, the European Ombudsman opened an inquiry to examine whether the Commission properly assessed the sustainability impact of the trade agreement with the Mercosur countries of Argentina, Brazil, Uruguay and Paraguay.

In its reply to the Ombudsman last month, the Commission repeated its claims that it appropriately managed the potential human rights, social and environmental impacts the deal could cause.

But, in a recently submitted response, human rights and environmental organisations have argued that there is no evidence the Commission had enough information to adequately take deforestation and human rights concerns into account.

The Commission’s reply is in stark contrast to evidence from civil society and legal experts that the deal is not strong enough to prevent issues like deforestation and violation of indigenous rights. Furthermore, there is no indication that civil society was actively consulted when developing the sustainability provisions of the agreement – as was required.

The inquiry followed a human rights complaint brought in June 2020 by environmental and human rights organisations ClientEarth, Fern, Veblen Institute, La Fondation Nicolas Hulot pour la Nature et l’Homme and International Federation for Human Rights. They allege that the Commission failed to properly assess the impact of the deal before going through with it – and that failure violated its legal obligations.

ClientEarth Lawyer Amandine Van Den Berghe said:

“It is shocking that the EU Commission continues to pretend this trade agreement adequately reflects civil society’s concerns over climate change, deforestation and indigenous rights.

“It should be a top priority that issues like rampant deforestation, the use of dangerous pesticides in farming, and the rights of indigenous people are properly addressed in the agreement.

“The Commission was clearly more concerned with reaching an agreement than fulfilling its legal obligations to ensure the sustainability impact of the deal will not cause undue harm.”

The Commission completed the Mercosur agreement before finishing the sustainability impact assessment of the deal. This means the sustainability impact had no bearing on the negotiations – making the process effectively meaningless.

EU member states have also raised doubts about the agreement, with Germany and France both warning they will not be able to ratify the agreement unless deforestation concerns are properly addressed.

The EU’s Trade Commissioner Valdis Dombrovskis has himself recognised concerns over the sustainability provisions of the deal and their enforceability.

Gaelle Dusepulchre, permanent representative of the International Federation for Human rights to the EU (FIDH) said,

“The Commission said in its reply that the trade and sustainability section of deal has enough measures included to prevent social and environmental harm.

“But this is a smokescreen. It shows the continued denial by the Commission over the need to change the way it conducts its trade policy.

“It should be integrating sustainability objectives at the core of its trade decision making – not digging in its heels and continuing to make harmful policy choices.”

Now, the Ombudsman will review the responses submitted by both the Commission and human rights and environmental groups before making a final decision.

ENDS

Notes to editors:

With over 260 million consumers and an annual GDP of 2.2 trillion euros, the Mercosur is the fifth largest economy outside the EU.

If the process is successful, the trade agreement will be the largest concluded by the EU for the population concerned (780 million people) and one of the largest in terms of the volume of trade covered (40 to 45 billion euros of imports and exports).

The deal should encourage exports by European companies in the automotive, chemical, pharmaceutical and clothing sectors and offer them increased access to the public markets of Mercosur states. In exchange, Mercosur-based companies would benefit, in particular in the agri-food industry, from larger outlets on the European market for their production, including beef, poultry, sugar/ethanol, etc.

Timeline:

• 1999: Talks between the EU and Mercosur countries began.
• 2009: First sustainability impact assessment published.
• 2010: Negotiations restarted following a suspension of talks. Negotiations gained new impetus in 2016.
• 24 January 2018: consultants issued the Sustainability Impact Assessment inception (SIA) report, followed by stakeholder consultations.
• April 2018: European and international NGOs sent a joint open letter, calling on the Commission to ensure “the ongoing sustainability and human rights impact assessments of the EU-Mercosur free trade agreement are conducted in a comprehensive and participatory way and that their findings are taken into account before concluding the negotiations, according to the rules set out in the Commission’s handbook for trade sustainability impact assessments and article 21 of the Treaty on the European Union”:
• 28 June 2019: EU and Mercosur announced political agreement on the EU-Mercosur Trade Agreement, while the new SIA was still ongoing and the interim report had not even been published.
• July 2019: in a Q&A, the Commission explained that “Work is currently underway on a new a Trade Sustainability Impact Assessment (SIA) evaluating the economic, social, environmental and human rights impact of a trade agreement between the EU and Mercosur. An independent contractor is carrying out the study.”
• 15 July 2019: Organisation of a Civil Society Dialogue by the Commission to debrief civil society organisations on the state of play and to exchange views on the topic.
• 3 October 2019: publication of the SIA draft interim report (the “Draft Interim Report”) followed by stakeholder consultations.
• November 2019: contributions from the civil society on the “Draft Interim Report”
• 9 February 2020: publication of the final interim report (the “Interim Report”), with a similar assessment as in the draft interim report.
• 20 July 2020: publication of the SIA draft report, presented at a civil society dialogue on 22 July 2020.

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