SANTIAGO – After 20 years of negotiating, the South American trade bloc Mercosur struck a large trade deal with the European Union (EU). The deal has become one of the largest in the world in terms of population. Environmental groups now warn of the destruction it brings.
Removing trade tariffs, lowering prices for imported products, easing exports for companies: the EU-Mercosur deal aims to increase trade between the two continents. Mercosur, currently consisting of Uruguay, Paraguay, Brazil and Argentina, and the 28 countries that make up the EU encompass 800 million consumers. After 20 years of negotiating, the trade deal has become the largest in the world in terms of population.
From both sides, policy makers responded with delight. Jean-Claude Juncker, the chief of the EU Commission, called it the EU’s biggest deal to date. Brazilian President Jair Bolsonaro called the trade deal “one of the most important trade deals of all time.”
More on Bolsonaro:
What’s in it for the EU?
Promoting import and export and reducing trade tariffs are the main goals of the trade deal.
- The EU seeks increased access to the South American market, especially when it comes to industrial products.
- European cars, currently facing trade tariffs up to 35 percent, should also find easier access.
- European construction companies will be able to bid on government contracts for public works, on equal terms as companies from the Mercosur trade bloc.
What’s in it for Mercosur?
Agricultural companies in the Mercosur countries seek increased access to Europe despite facing protests from the European agricultural sector.
- Products such as poultry, sugar, coffee, and ethanol will see greater access to the EU market.
- The meat industry in the Mercosur countries also profits: a set amount of beef and chicken can be exported at a reduced tariff rate to the EU each year.
´A Disaster for the Environment´
Environmental organizations, including Greenpeace, warn that the deal will cause a “disaster for the environment on both sides of the Atlantic.”
As the deal is likely to increase the production of agricultural products in Latin America, the warnings from Greenpeace don’t come out of nowhere. Among other things, they come from the alarming numbers that show the beef industry accelerates deforestation.
In 2010, the Food and Agriculture Organization of the United Nations was already warning about the destruction cattle ranching had done and was continuing to do to the forests of Central and South America. According to the organization, from 1985 to 2010 an area the size of India has disappeared because of the beef industry, and that the industry was also a major source of water pollution, loss of biodiversity, soil degradation, and a strong increase in carbon dioxide emissions.
WWF added that 80% of the current deforestation in the Amazon rainforest is attributed to cattle farming and that the industry with an annual emission of 340 million tons of carbon accounts for 3.4% of all global emissions. Moreover, 88% of the cattle farming industry takes place in Brazil, one of the main countries to profit from the Mercosur-EU deal.
It does not look good for the Amazon rainforest, often described as the lungs of the world. Yesterday, international media wrote that under Bolsonaro, deforestation last month had increased by nearly 89% since the year before. Environmental groups fear these numbers are set to increase if the EU-Mercosur deal comes into full effect.
Will this go in the history books as “a historic disaster” or “a historic changemaker”?
It likely all depends on the European leaders.
Editor-In-Chief Boris van der Spek is the founder of Chile Today.