Brazil | EU-Mercosur Agreement
Brazil threatens to discourage environmental protection if the EU-Mercosur agreement is not produced
The Amazonian country refutes the French unfavorable report to the agreement stating that the prices at which the products are marketed in Europe, as well as the phytosanitary standards used, are issues agreed upon by both parties.
9/23/2020
 Corn crop field in Brazil. 
The Brazilian government clarifies the following points on the report "Dispositions et effets potentiels de la partie commerciale de l'Accord d'Association between l'Union européenne et le Mercosur en matière de développement durable": - In a first preliminary examination of the report commissioned by the French government on the impact of the Mercosur-EU Agreement, published last Thursday, the Brazilian government points out the need to deepen our understanding of the Brazilian reality, as well as to consider technical data. available on the subject.
- For the moment, it affirms, first of all, that said Agreement does not pose any threat to the environment, human health and social rights. On the contrary, it reinforces multilateral commitments and adds best practices in this area.
- The report presents arguments not based on technical criteria, which suggest that the entry into force of the aforementioned Agreement will have a negative environmental impact, since it supposedly causes an increase in deforestation and undermines efforts to combat climate change under international agreements.
- The core of the report's criticism of the environmental aspects of the Agreement in question refers to the relationship between agricultural activity, especially beef production, and deforestation.
- The central argument is based on the following syllogism: (1) the Mercosur-EU Agreement will lead to a significant increase in beef exports from Mercosur countries to the EU; (2) the expansion of livestock in Mercosur always leads to an increase in deforestation; (3), therefore, the Mercosur-EU Agreement will lead to a significant increase in deforestation in the Mercosur countries, as well as an increase in greenhouse gas (GHG) emissions as a result of deforestation.
- Brazil has already shown that it can increase its production of meat, soybeans and corn while reducing deforestation. From 2004 to 2012, deforestation in the region called Legal Amazon fell by 83%, while agricultural production increased by 61%. In the same period, the cattle herd grew by more than 8 million head, reaching 212 million in 2012. These data are part of a historical trend of intensification of Brazilian agriculture and the resulting productivity gains, in line with the environmental preservation.
- The increase in production in Brazil is due to technological innovation without the need to expand into new areas. The potential for productivity expansion is enormous, since the adoption of existing technologies does not occur uniformly among different producers, not to mention the technologies that will still be developed by research organizations dedicated to the development of tropical agriculture.
- Regarding the impact of greenhouse gas (GHG) emissions, the LSE concluded that the impact derived from the entry into force of the Agreement is negligible. The study indicates that after the Agreement enters into force, Mercosur will be responsible for less than 1/6 of the EU's GHG emissions.
- The report's authors also seem to ignore the fact that the Brazilian traceability system for beef exports to the EU is already in full force. Exports of meat from Brazil to the European bloc must already comply with the community regulations on traceability, even before the entry into force of the Agreement between Mercosur and the EU, which will not lower the level of European requirements in this regard, at the moment of its implementation.
- It should be noted that the report of the evaluation commission of the aforementioned French government agreement reveals the real protectionist concerns of those who commissioned it when dealing with the EU's agricultural concessions to Mercosur.
- In the Mercosur-EU Agreement, when it comes to sensitive agricultural products for the parties, the blocks generally made offers with quotas. This was the case of the tariff quota for beef and chicken in the case of the European Union, for example, and the quotas for powdered milk and garlic, in the case of Mercosur. As there are marketing limits in these cases, it is not possible to imagine exaggerated incentives to export the blocks in products marketed with quantitative limitations.
- The report also ignores the progressive strengthening of environmental legislation in the country. Brazil was a pioneer in conservation policies, with the implementation of its first Forest Code in 1934. Thanks to this long-standing effort, more than 66% of the Brazilian territory is covered by native vegetation. The cultivation is limited to around 30% of the territory, of which 8% is dedicated to agriculture in the country and around 22% to livestock, according to Embrapa Territorial. This scenario elevates Brazil to the category of environmental potential.
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- The current Forest Code establishes general rules on the protection of native vegetation, the only environmental legislation in the world that allocates portions of private rural properties to preservation without offering any remuneration for doing so. As an example, every landowner in the Amazon must dedicate 80% of their assets to conserving the environment. This is a benefit for the world population made by the Brazilian rural producer, without compensation or incentive from the State. This producer, who acts in accordance with the law and guarantees the preservation of the environment, is the one who hopes to benefit from the Agreement. We invite rural producers from around the world to join forces with the Brazilian initiative, making their contribution to the preservation of biodiversity, to curb global warming, in addition to collaborating with food security.
- The Mercosur-EU Agreement recognizes the important relationship that exists between economic and social development and environmental protection, establishing, in its chapter on trade and sustainable development, that trade liberalization can make a positive contribution to sustainable development in countries. Mercosur countries, in its three dimensions: environmental, economic and social.
- Mercosur seeks to implement a modernizing agenda with a view to reconciling greater competitiveness / productivity with high standards of environmental sustainability. As part of this agenda, the bloc concluded free trade agreements with the EU and EFTA in 2019. Both agreements contain chapters dedicated to strengthening sustainability and include technical cooperation activities for the preservation of biodiversity, management of native forests, fishing. and animal life, in addition to high standards of protection of working conditions, in line with the objectives of the 2030 Agenda. All environmental provisions have been jointly agreed by the parties and go well beyond most trade agreements of the current EU.
- As proof of the high commitment in environmental matters, the precautionary principle is present in the Mercosur-EU agreement. According to the principle, if there are objective indications that an activity may cause irreversible damage to the environment, the absence of absolute scientific certainty should not be used as a reason to postpone effective and economically viable measures to prevent environmental degradation.
- Nor will the Agreement diminish the adequate level of sanitary, phytosanitary and food safety sovereignty established by the parties. The Agreement also strengthens bi-regional and multilateral cooperation on issues such as animal welfare, biotechnology, maximum residue limits in food and the fight against antimicrobial resistance. It should be noted that the foods exported by Mercosur already meet the highest sanitary, phytosanitary and safety standards, in accordance with the parameters recommended by international organizations and reference mechanisms.
- The report concludes that the Agreement's disciplines in the areas of public health and food safety could leave European citizens in a worse situation than before the Agreement. The disciplines negotiated in the Agreement were inspired by multilateral rules already assumed by the parties and even by disciplines already in force in the EU, which go beyond the WTO.
- With regard to geographical indications (GIs), with the entry into force of the Agreement, MERCOSUR will protect 355 European GIs, in contrast to the 340 GIs recognized by Mexico and 158 by Canada. The EU GI policy has generated considerable benefits for European producers, which, however, the report does not seem to acknowledge.
- Many of the report's findings reflect the protectionist concerns of European segments, illustrating the case that tariff preferences should only be granted to products that follow European production methods. However, it cannot be ignored that the European edaphoclimatic conditions are different from those of Mercosur, so that the production methods cannot, in many cases, be the same, so that they do not become unsustainable. This is the case of double or triple harvesting in the same area per year, which is not feasible on the European continent.
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- It should be noted that the report defends bilateral safeguard measures without a time limit. The objective of the bilateral safeguard mechanism is to provide the parties with the peace of mind that they can adjust during the transition period of the agreement, that is, when and if the reduction of bilateral tariffs is causing disturbances in the markets. At the end of the transition period of the agreement, the disturbances would no longer derive from the commercial opening to a certain counterpart, but from other factors, such as adverse weather conditions, new production methods, among other reasons, and therefore should not be used, in this case, as a distortion of the bilateral safeguard mechanism.
- Finally, it is surprising that the report is focused on products of high European agricultural sensitivity and uses non-commercial arguments (such as the supposed risk of deforestation) to guarantee economic protection to certain producers.
- Based on the foregoing, the Brazilian government refutes any claim that the agreement would increase the destruction of the Amazon rainforest. It reaffirms that the agreement brings additional commitments to multilateral environmental and trade rights to regulate current and future trade flows in order to guarantee environmental sustainability.
- The entry into force of the Agreement has the potential to feed the virtuous circle in both blocs in terms of:
- Improvement of economic conditions,
- Increase the quality of life of citizens, generate employment and income and reduce the cost of food and bioenergy,
- Development and adoption of technologies to improve the efficiency of economic sectors,
- Strengthening of environmental preservation and reduction of GHG emissions, as it reinforces the commitment of the Paris Agreement.
- The lack of entry into force of the Mercosur-EU Agreement would send a negative message and would establish a clear disincentive to the country's efforts to further strengthen its environmental legislation. The non-approval of the Agreement would also have negative social and economic implications, which could further aggravate the environmental problems of the region. Failure to ratify it will imply an important gap in the strengthening of the relationship between the parties and in the reiteration of a sustainable and responsible free trade, which will provide prosperity with the preservation of nature, resulting from the improvement of economic conditions.
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