EU on the brink: Brussels’ trade deal with South American bloc on the verge of collapse

EU-Mercosur trade deal criticised by campaign group

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The agreement is regarded by the EU as having the potential to unlock billions in trade with one of the world’s fastest-growing economic areas, as well as compensating for the loss of the UK after Brexit. However, critics argue it belongs to an “outdated 20th-century model” which has “failed the planet”.

A statement published on the website of the Stop EU-Mercosur Coalition is signed by groups from all over both continents, including Greenpeace and Friends of the Earth, as well as UK groups such as Amazon Rebellion and Extinction Rebellion.

It said: “The EU-Mercosur agreement belongs to an out-dated 20th Century model of trade that has failed the planet.

“It serves corporate interests at the expense of planetary boundaries and animal welfare and drives untenable social inequalities.

“The goals and core elements of this agreement are in direct opposition to climate action, food sovereignty and upholding human rights and animal well-being.

“The FTA will further incentivise the destruction and biodiversity collapse of the Amazon, the Cerrado and the Gran Chaco through the expansion of livestock and ethanol quotas, perpetuating an extractive model of agriculture exemplified by overgrazing, expansion of feedlots and chemically intensive monocultures.

“It would give a strong political signal that horrific human rights abuses linked to the supply chains implicated in the deal are acceptable.”

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Furthermore the deal would destroy livelihoods in both Europe and in South America, as well as damaging family farms and workers, the statement warned.

By trading agricultural commodities for cars, it represented an “imminent threat” to industrial jobs in Mercosur countries.

Furthermore, it reinforced the role of South American economies as “cheap exporters of raw materials obtained through destruction of vital natural resources”, the signatories warned.

It added: “For a viable future, a 21st century trade model must support rather than undermine efforts to create socially just and ecologically resilient societies based on the principles of solidarity, protection of human rights and our planetary boundaries.

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“Citizens across Europe and South America are uniting against the EU-Mercosur agreement and working towards a better future.”

An accompanying petition on the website calling for the deal to be binned has attracted more than 2.1 million signatures so far.

Mercosur, officially known as the Southern Common Market, was established by the Treaty of Asuncion in 1991.

Argentina, Brazil – led by controversial President Jair Bolsonaro – Paraguay and Uruguay are full members, while Bolivia, Chile, Colombia, Ecuador, Guyana, Peru and Suriname. Venezuela’s membership has been suspended since December 1, 2016.

The EU is keen to secure better access for its manufactured goods, particularly cars, which currently face stiff 35 percent tariffs.

The FTA would eliminate 93 percent of tariffs to the EU and grant “preferential treatment” for the remaining seven percent, saving an estimated €4.5billion of duties in the process.

To that end, the European Union–Mercosur free trade agreement was agreed in principle in 2019 – but the final text has yet to be finalised, signed or ratified by either party.

At the time, then-European Commission President Jean-Claude Juncker trumpeted it as a victory for the bloc with Brexit looming.

He said: “This deal delivers a real message in support of open, fair, sustainable and rule-based trade because trade creates jobs for all concerned,

“This deal promotes our values and supports a multilateral, rules-based system.”

Failure to implement the agreement would come as an enormous blow to the EU, given Mercosur exports to the bloc are worth €42.6 billion annually, while EU exports going the other way are valued at €45 billion.

Austria’s coalition government has already said it will veto the deal, arguing it goes against the EU’s environmental ambitions.

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