Mercosur trade pact splits EU, threatening ratification

Ratification of the free trade agreement between the European Union and Mercosur is "hard to imagine" if Brazil continues its failure to contain the fires that are currently devastating large swathes of the Amazon rainforest, said the President of the European Council Donald Tusk to reporters at the G7 meeting in Biarritz, France over the weekend.

He said that the EU "stands by the EU-Mercosur agreement" but “it is hard to imagine a harmonious process of ratification by the European countries as long as the Brazilian government allows for the destruction of the green lungs of planet earth.”

Following two decades of discussion, the EU and the four South American countries of Mercosur came to an agreement in June on a free trade agreement between the two blocs. Two months later, it is uncertain whether the deal will ever see the light of day.

Argentina, Brazil, Paraguay and Uruguay agreed to multilaterally open their markets to the EU, bucking the current global trend towards protectionism. However, the deal first came under fierce criticism from countries concerned about threats to their agricultural sectors. Then, following the immense devastation that the rainforest fires continue to cause, and the perceived complacency towards the issue of Brazilian President Jair Bolsonaro, concern in some European countries reached a peak.

In order for the deal to come into force, it must be ratified by all EU and Mercosur member states and the European Parliament.

Some reports in the Amazon say that the fires are mostly man-made and started by farmers and loggers, both industries towards which President Bolsonaro is openly sympathetic, in order to make space for further crops. In July, the rainforest was being cleared at a rate of around five football pitches every minute.

French President Emmanuel Macron said that emergency talks should be held on the crisis and that pressure should be applied on the Brazilian president. He was joined by Irish Taoiseach Leo Varadkar and both leaders have pledged to block the new trade deal. On Sunday, Luxembourg joined their ranks.

However, not all leaders agree. Spain, which has historical ties to South America does not support blocking the trade agreement saying that the environmental clauses contained within the agreement would be the best mechanisms to aid the fight against climate change. In an online message to the media, Madrid said the country “does not share the position of blocking the deal,” adding that Spain “has been at the forefront of the last effort to sign the EU-Mercosur agreement that will open huge opportunities for the two regional blocs.” 

Germany also opposes blocking the agreement arguing that it was "not the right response" to tackling the Brazilian fires.

UK Prime Minister Boris Johnson has also voiced opposition to blocking the deal, going as far as to criticise President Macron.

“There are all sorts of people who will take any excuse at all to interfere with trade and to frustrate trade deals, and I don’t want to see that,” he said, adding: “I think I’d be reluctant to do anything, at this very difficult time for global free trade, to cancel another trade deal.” 

However, with the UK set to leave the EU in two months time, the country's involvement in a deal with Mercosur remains uncertain.

For his part, Bolsonaro responded to Macron with a sharp retort, accusing the French President of having a "colonial mentality". Macron responded in turn by calling Bolsonaro a liar with regard to his June pledge to fight climate change and global warming.

Over the weekend, Switzerland announced in a statement that the European Free Trade Association (EFTA), which also comprises Iceland, Liechtenstein and Norway, all non-EU member states, had agreed on a free-trade agreement of its own with Mercosur. When it comes into force, the deal will remove tariffs from 95% of goods between the two trading blocs. EFTA said that if the EU deal with Mercosur went through, its countries would be at a disadvantage. It is expected that the deal will be signed early next year.

The Swiss statement made no mention of the Amazon fires. It did, however, say that the signed accord included “provisions on climate protection and the sustainable use of forest resources.” 

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