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EU-Mercosur: Another Case of Profit vs. Sustainability

by Anjela Postic

Editor: Zosia Łukasiewicz

January 2025

Introduction

French farmers are taking to the streets, dumping manure in front of government offices (Vohra, 2024). In Poland, convoys of tractors adorned with banners like “The Demise of Polish Agriculture” brought cities to a standstill last December (PAP, 2024). Such scenes of unrest are familiar - European farmers have long protested rising production costs and EU agricultural policies. But this time, their anger is fueled by another reason: the newly finalized EU-Mercosur trade deal. 

 

Indeed, after 25 years of negotiations, the European Union concluded an agreement with the founding nations of the Southern American trade bloc - Argentina, Brazil, Paraguay, and Uruguay - on December 6, 2024. The deal eliminates tariffs on over 90% of traded goods, facilitating annual trade flows of up to €45 billion (Steinberg, 2024). It promises preferential market access for South American products and the establishment of a vast free trade zone, all under the banner of environmental principles aligning with the Paris Agreement (European Commission, n.d.).

Yet, behind the polished rhetoric lies a stark reality. Critics argue that the agreement is little more than greenwashing, masking its potential to devastate the environment and exacerbate global inequalities (Dupré & Kpenou, 2024). With climate change intensifying, its timing raises pressing questions: why push forward a pact that undermines sustainability goals? And who truly benefits from this trade agreement? If ratified, the EU-Mercosur deal will further entrench a system that devastates the environment to sustain capitalist profits.

Sustainable or Greenwashed?

The EU-Mercosur trade deal falls short due to weak environmental protections and its failure to tackle the true ecological effects of increased trade (Dupré & Kpenou, 2024). Indeed, the removal of tariffs would undoubtedly boost certain industries, particularly those with high environmental impacts (Climate Action Network, 2024). The European Union plans to export cars and manufactured goods, whose production emits greenhouse gases and reduces carbon sinks. Similarly, harmful goods banned in the EU - e.g. pesticides - will be back in Mercosur’s market (Greenpeace European Unit, 2023). These pesticides are known for harming ecosystems and non-targeted biodiversity. The effects would be felt both in South American countries where they are used and in the EU, through secondary exposure via food waste and landfills (Verheyen et al., 2024). On the other hand, strict EU environmental standards are not always applied within Mercosur, giving their countries a comparative advantage  (Climate Action Network, 2024). This would lead to increased demand for polluting raw materials like lithium whose extraction results in water depletion and habitat destruction. Similarly, South American countries will continue to produce beef and soy at lower costs. However, these industries drive illegal logging, thus deforestation, in the Amazon, worsening global warming (Climate Alliance, n.d.). The Veblen Institute found that if the EU-Mercosur deal is ratified, deforestation could rise by 25% annually over the next six years, far exceeding Brussels' projected 5% (Dupré, 2020).

 

This is an example of greenwashing, a strategy the EU used to portray the agreement as environmentally sustainable (Dupré & Kpenou, 2024). Despite the agreement's commitment to "promote the green transition" and align with the Paris Agreement for climate neutrality by 2050, its promises fall short in the Sustainability Impact Assessment (SIA) (Dupré & Kpenou, 2024; European Commission, n.d.) Studies show these environmental guarantees are weak and hardly enforceable (Dupré & Kpenou, 2024; Verheyen et al., 2024). The Paris Agreement clause only applies if a country leaves and explicitly rejects it. Since the deal involves a region, Mercosur, suspending it due to one country's non-adherence is politically and technically challenging for the whole bloc (Dupré & Kpenou, 2024). The legal language is weak and vague, with the SIA showing no binding sanctions for violations of social rights, biodiversity, or deforestation (Verheyen et al., 2024). The clauses act more as deterrents than credible enforceable measures, e.g. financial penalties. Given this, it is highly likely that the disastrous environmental scenarios predicted by scientific institutes and NGOs will come to pass. So why, amid a global environmental crisis, is such an agreement being prioritized on the political agenda?

Secrecy and Opacity: The Recipe for Money and Lobbies

The EU-Mercosur agreement was incentivized by profit-driven structures that prioritize short-term profit over long-term sustainability. Since trade discussions began in 1999, local communities on both sides of the Atlantic have strongly opposed the agreement (Blaylock, 2024). French and Polish farmers fear price dumping and unfair competition from cheap South American products that bypass strict socio-environmental regulations (Vohra, 2024). In Brazil, indigenous communities in the Amazon face displacement and resource theft. Civil society has voiced alarm over the devastating environmental consequences of the deal. In response, movements like the "Stop EU-Mercosur" coalition have emerged, uniting 450 civil society organizations from Europe and South America (Blaylock, 2024). They have engaged in acts of civil disobedience, hoping to draw attention from decision-makers. But for 25 years, negotiations have been made behind closed doors. Transparency has been absent by not publicly publishing negotiating mandates, Commission proposals, or draft texts. Important stakeholders, namely local farmers, were not involved in shaping the very policies they were threatened by (Climate Action Network, 2024).

Behind this opacity lies unethical agribusinesses, export-driven lobbyists, and profit-focused EU elites pushing for the deal to get ratified (Katanich, 2024). These actors prioritize financial gain over the environment’s expense. Agribusinesses in South America are a prime example: they promote unsustainable practices like land grabbing to expand intensive livestock farming or monocropping (Ibama et al., 2021). Friends of the Earth found that since 2019, top-level meetings in Brussels have been dominated by industry lobbies - e.g. BusinessEurope -  while civil society groups were relegated to lower-level officials (Friends of the Earth Europe, 2022). It is in multinational corporations’ interests to import cheap raw materials from the Global South and export high-value goods. This also strengthens the EU's strategic position in South America - a position currently challenged by China and the United States. Government elites are thus also prompted to prioritize competitive trade over sustainability goals (Steinberg, 2024).

Therefore, the EU-Mercosur pact symbolizes the disconnect between capitalist interests and public demand for sustainability, as witnessed in the "Stop EU-Mercosur" coalition (Blaylock, 2024). Accusations of an "undemocratic process" have also grown with proposals to "split" the agreement to speed up ratification. This would separate the trade deal from provisions like environmental clauses, to ensure faster approval in the European Parliament (Climate Action Network, 2024). If this occurs, it would bypass democratic scrutiny and public debate, suggesting that the EU's primary goal is to secure the corporate capitalist deal, regardless of environmental standards. 

Conclusion 

If ratified, the EU-Mercosur agreement risks sacrificing long-term sustainability for short-term profit. If ratified, the decision would lack transparency, as farmers' protests persist alongside accusations of greenwashing. If ratified, the deal could lock Mercosur nations into an exploitative cycle of dependency on primary goods exports, hindering economic diversification while primarily benefiting corporate elites in both the EU and South America (Radford, 2025).

However, there remains an opportunity to reshape the agreement into a truly sustainable and equitable partnership. This requires meaningful inclusion of key stakeholders and addressing their concerns. The Institute for European Environmental Policy (IEEP) recommends that the deal include enforceable environmental and social mechanisms, prioritizing trade in sustainably produced goods over polluting industries (IEEP AISBL, 2024).

For the EU-Mercosur trade zone to succeed, it must move beyond serving corporate interests to foster a balanced economic relationship. Both regions can benefit from a partnership built on ethical trade, fair value distribution, and environmental stewardship. While this approach may take longer to implement, it ensures that sustainability and ethical profit are achieved without sacrificing the needs of communities or the planet.

References

Blaylock, J. (2024, December 2). The EU-Mercosur trade deal must be stopped – NOW! European Trade Justice Coalition. https://europeantradejustice.org/eu-mercosur-nov2024/#sig

Climate Action Network. (2024, December 12). EU-Mercosur deal concluded in secrecy, a tragic blow to the planet and democracy. https://www.google.com/url?q=https://caneurope.org/eu-mercosur-deal-concluded-in-secrecy-a-tragic-blow-to-the-planet-and-democracy/&sa=D&source=docs&ust=1738012627549482&usg=AOvVaw0M9TJP2asf90sNDkJIXBd9

Climate Alliance. (n.d.). Climate Alliance - EU-MERCOSUR. https://www.climatealliance.org/activities/advocacy/european-policy/eu-mercosur.html

Dupré, M. (2020, September 17). Beyond the Bolsonaro policy, it is the very content of the EU-Mercosur agreement that promises an environmental disaster. https://www.veblen-institute.org/Beyond-the-Bolsonaro-policy-it-is-the-very-content-of-the-EU-Mercosur-agreement.html

Dupré, M., & Kpenou, S. (2024, December 12). Key Insights into the Final EU-Mercosur Agreement. Veblen Institute. https://www.veblen-institute.org/Key-Insights-into-the-Final-EU-Mercosur-Agreement.html

European Commission. (n.d.). EU-Mercosur trade agreement. Trade. https://policy.trade.ec.europa.eu/eu-trade-relationships-country-and-region/countries-and-regions/mercosur/eu-mercosur-agreement/factsheet-eu-mercosur-partnership-agreement-opening-opportunities-european-farmers_en

Friends of the Earth Europe. (2022, March 25). The powers pushing for a planet-wrecking trade deal - Friends of the Earth Europe. https://friendsoftheearth.eu/publication/powers-pushing-for-eu-mercosur/

Greenpeace European Unit. (2023, April 24). EU-Mercosur: Banned pesticides found on Brazilian limes in EU - Greenpeace European Unit. https://www.greenpeace.org/eu-unit/issues/nature-food/46638/eu-mercosur-banned-pesticides-found-on-brazilian-limes-in-eu/

Ibama, Marcio Isense e Sá, Seeg, Cebri, & Gilmer Diaz Estela. (2021). How the toxic agribusiness model promoted by the EU-Mercosur deal will undermine Brazil’s climate and deforestation goals. https://friendsoftheearth.eu/wp-content/uploads/2023/04/FoEE_FACTSHEET_apr23_EN_V5.pdf

IEEP AISBL. (2024, April 17). Alternatives for a fair and sustainable partnership between the EU and Mercosur: scenarios and guidelines - IEEP AISBL. https://ieep.eu/publications/study-alternatives-for-a-fair-and-sustainable-partnership-between-the-eu-and-mercosur-scenarios-and-guidelines/

Katanich, D. (2024, November 19). EU-Mercosur trade deal: Winners and losers in Europe. Euronews. https://www.euronews.com/business/2024/11/19/eu-mercosur-trade-deal-winners-and-losers-in-europe

Polish Press Agency (2024, December 12). Nationwide protests against EU-Mercosur deal start in Poland. Polish Press Agency. https://www.pap.pl/en/news/nationwide-protests-against-eu-mercosur-deal-start-poland

Radford, B. (2025, January 17). Neocolonial EU-MERCOSUR trade deal is a blow to the climate, human rights. bilaterals.org. https://www.bilaterals.org/?neocolonial-eu-mercosur-trade-deal&lang=en

Steinberg, F. (2024, December 6). What Are the Implications of the EU–Mercosur Free Trade Agreement? Center for Strategic & International Studies. https://www.csis.org/analysis/what-are-implications-eu-mercosur-free-trade-agreement

Verheyen, R., Winter, G., Rechtsanwälte Günther, University of Bremen, Arndt, V. I., & Bustami, A. (2024). The EU-Mercosur Free Trade Agreement’s impacts on greenhouse gas emissions and compatibility with EU and international law. https://www.greenpeace.de/publikationen/Rechtsanalyse%20Handelsvertrag%20EU-Mercosur%20verst%C3%B6%C3%9Ft%20gegen%20Klimagesetze%20englisch.pdf?

Vohra, A. (2024, December 18). EU-Mercosur trade deal riles European farmers. dw.com. https://www.dw.com/en/eu-mercosur-trade-deal-riles-european-farmers/a-71071869

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