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The signing of the world’s biggest free trade agreement between the European Union and Southern Common Market (MERCOSUR) on December 6 — after 25 years of stalled negotiations — has grave implications for the environment and human rights should it be ratified and come into effect.

MERCOSUR is a South American trade bloc formed in the early 1990s with the aim of being a consolidated free trade area between Argentina, Brazil, Paraguay and Uruguay, which then expanded to include countries like Bolivia, Peru, Chile, Colombia and Ecuador. Although formed along similar lines of the EU, it never materialised in the sense of an integrated market and citizenship. However, it represents a significant economic bloc, holding nearly a quarter of the world’s gross domestic product.

The free trade agreement reduces import tariffs on manufactured goods coming from the EU into MERCOSUR countries, while reducing restrictions on agricultural products and minerals imported into the EU.

and the media are lauding the sheer scale and opportunity for profit-making, as MERCOSUR represents the world’s biggest agricultural producer and has the biggest reserves of minerals and oil.

Meanwhile, grassroots movements have the agreement for its expected impact on climate change, exacerbation of human rights violations and violation of countries’ sovereignty.

The trade agreement violates the principle of free, prior and informed consent, with indigenous communities, campesinos (poor, small-scale farmers) and civil society excluded from the negotiations. Decades of negotiation were done in , and there is still no complete text of the trade agreement available to the public — important information about negotiations and the agreement was only made available through .

Under the deal, the EU will increase imports of products like beef, poultry, soy and sugar, while exporting cars, plastics and pesticides — including pesticides that are in the EU for their environmental and health impacts. Given that Brazil and Argentina are the biggest users of pesticides, respectively, this will have significant health and environmental impacts.

Meat production is the leading driver of deforestation in the Amazon region, accounting for of land-clearing for cattle grazing and monocultures that produce animal feed. Therefore, expanding demand for beef and other agricultural products has huge consequences for the ecological and climate crisis, as deforestation is a significant driver of climate change.

A 2020 by French NGOs found that the predicted increase in solely beef production under the EU-MERCOSUR agreement could increase deforestation by 25% per year over six years.

This particularly threatens the Gran Chaco forest, the continent’s second-largest forest (about 80 million hectares) after the Amazon rainforest and one of the world’s biggest carbon sinks, which spans across Argentina, Brazil, Paraguay and Bolivia. 

Along with grave environmental impacts, the expansion of logging, mining and agribusiness industries will further exacerbate , predominantly those of indigenous peoples in Latin America.

Powerful agribusiness and mining corporations are responsible for and destruction of indigenous land in the Amazon region, which is often imposed with violence.

Critically, indigenous peoples are the stewards of , despite making up only 5% of the population.

Hypocrisy

The agreement also exposes the hypocrisy of European countries’ purported commitments to climate action. While the EU touts itself as — particularly through its “European Green Deal” — its trade agreement with MERCOSUR will profit from exporting climate-wrecking products to Latin America and importing resources with a similarly destructive footprint. 

Western powers are seeking to control or obtain “critical” minerals, like lithium, which are used for batteries in electric vehicles, electronic devices and solar power storage. The exploitation and processing of these minerals, however, comes at a huge environmental and social cost.

Several EU countries are moving towards “” their domestic economies, based on agreements to reduce climate emissions, pesticide use and phase out diesel and petrol vehicles. But this large-scale greenwashing is dependent on expanding destructive industries in the Global South, essentially creating more , as well as blocking those economies’ pathways to a meaningful climate transition.

A released by Climate Action Network in November said that the agreement essentially secures a lucrative market for EU’s car manufacturers to “continue to sell fossil-fuel cars at the expense of the climate, while simultaneously proclaiming their green credentials in the EU”.

At the same time, car manufacturers lobbied hard for the agreement to eliminate import tariffs on the raw materials used in the industry and prevent MERCOSUR countries from introducing export restriction on those materials.

The deal predominantly benefits big agribusiness and extractivist interests in MERCOSUR countries and car, chemical and plastics manufacturers in the EU.

Proponents of the deal have thrown in dubious claims of employment increases — contradicted by the European Commission’s own Sustainability Impact Assessment predicting only — in an attempt to position the trade agreement as mutually beneficial.

However, it is only mutually beneficial to Latin American and European capitalists, by deepening and perpetuating the colonial structures of global trade.

The deal reinforces the same pattern seen since the initial colonisation of Latin America, which is the pillaging of primary resources by mostly foreign interests that are then converted into higher-value industrial products to be sold for a monumental profit. Uruguayan journalist Eduardo Galeano’s Open Veins of Latin America documents this history with precision.

At the same time, Western imperial powers in Latin America like manufacturing, often through military force. The result is that Latin America’s economies are largely export-based, of the Global North.

This unequal trade between Europe and Latin America, and more broadly the Global North and South, still exists today. Currently, to MERCOSUR countries are services or high-value industrial products, whereas about 75% of MERCOSUR exports to the EU are agricultural and mineral resources.

Governments of the Global North safeguard their own industries through protectionist policies, such as tariffs on imported manufactured products like cars, while advocating “free trade” for their access to cheap primary resources. Even in the EU-MERCOSUR agreement, the import of agricultural products into the EU would still be heavily regulated under a .

This so-called “free trade” is actually a complex series of regulated trade flows usually designed to maintain unequal trade and guarantee profits for transnational corporations.

A key feature of most trade agreements is a prohibition of taxes on exports, which favours the competitive economies of the Global North exporting high-value products and service, while condemning the mostly export-based economies of the Global South to the draining of their wealth and resources.

La Via Campesina Brazil — the Brazilian chapter of an international anti-capitalist movement fighting for food sovereignty and campesino rights — released a rejecting the EU-MERCOSUR trade agreement that “assumes neo-colonial characteristics in its conception and threatens our peoples and territories, posing a danger for peasant agriculture, traditional communities, and delivers our common goods to the interests of international capital”.

The statement said that the deal consolidates the “export-oriented nature of [Brazil’s] economy, which is basically to continue exporting raw materials to meet the demands of European countries in exchange for industrialized products”.