20 years in the making, the EU-Mercosur draft free trade agreement has been obstructed by members of parliament in Austria who are insisting a government veto. Mercosur is a South American bloc comprising Argentina, Brazil, Paraguay and Uruguay, established by the Treaty of Asunción in 1991 and Protocol of Ouro Preto in 1994. The Deal has been rejected by all but one of Austria’s major parties within a parliamentary sub-committee, demanding Mercosur prioritize environmental issues. France and Ireland are threatening to reject the deal unless more is done to impede the fires within the Amazon rainforest. The Mercosur deal will not go through without the support of every government in the EU.
The EU is Mercosur’s biggest trading partner, conducting 20.1% of the bloc’s trade in goods. The deal is the largest trade agreement the EU has ever concluded, potentially saving over €4 billion worth of duties per year. The agreement will remove the majority of tariffs on EU exports that are as high as 35% for cars and clothing. If passed it will create a market of 780 million people; this provides immense opportunities for the EU. In addition to the momentous economic benefits, the trade agreement will implement human rights, social, and environmental standards within Mercosur countries. The Paris Climate Agreement will be effectively enforced with a focus on sustainable development. The agreement provides numerous opportunities to improve conservation of forests, respect for labor rights, promotion of responsible business conduct, and address the rights of indigenous communities.
EU-Mercosur Deal is a valuable trade deal that has the potential to implement real change. It provides a mutually beneficial economic relationship between the EU and Mercosur countries. An emphasis on key environmental issues within the South American countries is included in the agreement. The opportunity to bring Mercosur countries into the Paris Climate Agreement is a valuable concurrence with the potential to positively impact the world in the battle against climate change.
A continued delay of action on environmental issues could hypothetically do more harm than good. However, with such positive economic benefits, it is likely that Mercosur will be compelled to oblige to environmental protection demands. The Austrian effort to tackle environmental issues is crucial, given the opportunity the EU should push for as green a deal as possible.