Negotiations concerning the EU-Mercosur trade agreement have been suspended for 9 years, from 2004 to 2013. A final agreement between the European Union and Mercosur should be signed at the end of 2019. Despite the refusal of the European Union, to sign trade deals with countries that don’t ratify Paris climate change. 

The trade agreement between Mercosur and the European Union is a project under negotiation since 2000 and then suspended in 2004. The negotiation started again in 2013. Moreover, with the return of the protectionism in the United States after the election of Donald Trump, the European Commission is now convinced to reach an agreement at the end of 2018. Previously, the reasons for blocking negotiations were mainly based on the export of beef and ethanol which were not enough satisfying for Mercosur. To open back the negotiation, the European Commission changed its offer, accepting the entry on its market of 70,000 tons of beef meat and 600,000 tons of ethanol, which is still not enough according to Mercosur. To fully satisfy the Latin American trade bloc, the European Union would also allow in this agreement a total suppression of customs duties to Mercosur. A statement which has not been confirmed so far but would be an unprecedented setting in terms of trade agreement. Behind this major trade agreement, human and land rights are threatened in South America and European agriculture will have to give up their lands, if a deal is reached.

“63% of Irish farms were already not economically viable in 2015 according to a Teagasc report and 85% of farms income in Northern Ireland are dependent on EU Farm subsidies.”

Attracta Ui Bhroin

The farmers are threatened in Europe and the human rights in South America

As the article 29.5.2° of the Irish Constitution mentions: “the State shall not be bound by any international agreement involving a charge upon public funds unless the terms of the agreement shall have been approved by Dáil Éireann”.

            In order to understand better, the danger of the trade agreement between Mercosur trade bloc and the European Union, it was essential to turn up at the conference “Law Defending, Land Defending” organised by the Latin America Solidarity Centre. There, Attracta Ui Bhroin, previously a journalist for the Irish Times and now EEB Vice President (The European Environmental Bureau), answered few essentials questions concerning Irish preoccupation on this trade agreement. “Two numbers to understand the risk of this agreement on Irish farmers, 63% of Irish farms were already not economically viable in 2015 according to a Teagasc report and 85% of farms income in Northern Ireland is dependent on EU Farm subsidies.” In other words, in some countries like Ireland and France or Germany, the small farmers are already suffering from the import-export inside the European Union as the regulation within the member state is also weakening in terms of control of quality and quantity imported within Europe. Therefore, an eventual trade agreement would potentially kill the rest of the farmers remaining in Europe or push them to overproduce (in other words, saving money financial resources by neglecting the health of livestock, farmland, or worst using antibiotics and similar drugs), and instead replace the Irish and French grass-fed food by a lower quality food. Mercosur according to Attracta Ui Bhroin: “will privilege intensive production methods at the expense of more sustainable agricultural practices.”

            On the other side of the planet, the land rights are threatened, at the same conference “Defending Land – Defending Life”, Karina Flores, community leader and activist from Honduras fighting for Land and Human Rights in her country describes the trade agreement in negotiation as the “radicalisation of neo-liberalism”. According to Karina Flores and the same evidence was found in a study made by Ambroise Mazal, this trade agreement is increasing corruption, social inequalities, criminality and expropriation in countries like Honduras, Uruguay, Paraguay and Argentina. Karina Flores then explains that a group of activists she was part of in Argentina, get all expropriated of their lands because the government “needed to access to a part of land behind their village and the roads were too small to reach it”. They all fought to keep their lands, but one morning the leader of this activist group got killed by a workman after a fight in front his house. Then Karina Flores, further in her speech, reminds the assembly: “every 17 minutes in Latin America someone dies to defend both land rights”. she adds. “In South America, 2,5 billion people from indigenous and local communities are under constant threat of losing their lands”. Moreover, on average three people are killed every week while protecting their land, forests and rivers. As Mercosur doesn’t only imply food, but also wood, minerals and as a result, exploitation of human properties, murders and criminalisation of the activists.

The food insecurity will increase drastically

To take the Irish example, the price of the meat (beef) was on the 3rd April 2018 of €3.85/Kg. Based on a study of price made by ICSA, the Irish Cattle & Sheep Farmer’s Association Cattle. This price for the beef meat changes and varies every week, and a VAT and importation prices must be added to have a full price. On the other side of the planet, the agreement will allow so far, 70,000 tons of South American meat, at the incredible price of €1-2/Kg of beef meat, according to a study from Copa Cogeca.

            But that price is not the only issue, because in addition to that insane price killing the little farmers, that the European Commission won’t hesitate to accept, they won’t have any customs fees or taxes to pay on this import as it is one of the settings of the agreement.

Taking the example of Brazil, in 2010, the government spent €47 billion in agriculture budget, of which almost €3 billion was used to maintain a system of minimum prices for various type of agriculture, and especially meat. Brazil has also been investing aggressively since 2015 in public fund to increase its production in comparison to EU. But even though Brazil has developed a pro-active agriculture strategy, the difference in the available on-farm structures does not contribute to Europe’s advantage. 50% of farms in Brazil have less than 10 hectares of land, this figure is 85% in the EU. This price dumping and extra-productivity to catch up from South America are damaging the quality of the meat. In addition to this revelation and this direct loss of competitivity from Europe, there would also be an indirect effect on the price of beef meat produced in Europe. This would mean a 30% average reduction with an additional cost of €9 billion.

            Then, the traceability will also be part of this poor-quality beef. Most of Mercosur countries do not have tagging, traceability or movement control system in place for livestock and, therefore, cannot guarantee origin. Tagging has been attempted in Mercosur countries but FVO reports have consistently noticed illegal removal or cutting out tags while slaughtering meat. In addition to the traceability, another important aspect according to Attracta Ui Bhroin, is the use of drugs. “The hormone-treated beef usage in South America is not regulated, that cannot be accepted by the European Union.” She adds: “we can make trade agreements, but not at any price, and health is an important price to pay”. Indeed, antibiotics are already legal on some Cattle’s treatment in Europe. This is already not a good utilisation from European farmers, and even worse for the future generation consuming meat and animals cured with antibiotics.

“We can make trade agreements, but not at any price, and health is an important price to pay”Attracta Ui Bhroin

In fact, it has been proven that it will drastically increase the human’s tolerance to antibiotic treatment. Unfortunately, in the Mercosur trade bloc, many drugs, such as hormones and growth promoters, completely illegal in EU, are used. Other drugs, such as pesticides and insecticides illegal in EU are used too for the grass food, which is the main alimentation of cows and beef. According to a Copa Cogeca report, there is still no regulation and no authorities recording the use of drugs or monitoring withdrawal period on farms. In other words, Mercosur-EU trade agreement won’t uphold a high food safety standard, and this will allow mainly bad quality meat from Argentina, Uruguay, Paraguay and Brazil, to enter in Europe.

An ISDS or ICS for this trade agreement too?

Attracta Ui Bhroin settles the basement of a potential effect of an ISDS, Investor-State dispute settlement in the favour of Mercosur: “the European Commission should explicitly say that every action in favour of sustainable farming cannot be sued by an ISDS”. She adds: “we have to change our approach in Europe concerning the ISDS, or ICS, especially concerning subjects like agriculture, health and environment.” (Investment Court System)

            This question is important to raise, as an ISDS, concerning the Mercosur-EU trade agreement would concretely mean that huge illegal directed farms in Argentina or Brazil would be able to sue Irish or French governments in case of reforms or law changes. This question has also been raised many times concerning the CETA, as it would push the European member state to stop regulating because of the scared of being sued. For example, in July 2017, the Global Arbitration News was proclaiming that EU was declaring the ISDS “dead”, after the failure of establishment of an ISDS in the Japan-EU Economic Partnership Agreement (“JEEPA”).[ Instead of an ISDS with the Japanese agreement, EU decided to pursue the ICS, under which a permanent panel of State-appointed judges is established. Of course, some argued like Attracta Ui Bhroin and Karina Flores, that the EU should push human rights and protesting rights in Latin America before even thinking of those settings. Even though this setting is major for the negotiation, it is right now that the EU and Mercosur are finding a final agreement. And the ICS could be a major disaster in terms of court expenses administrative expenses, price regulation and competition. According to Attracta Ui Bhroin: “it’s now that we have to act to stop the Mercosur-EU trade agreement. We have to raise awareness, and I guess require a watchdog effect on both blocs concerning export and human rights.” A final agreement should be found at the end of 2018, and the European Commission says that its new investment proposal – the ICS – will protect governments’ abilities to regulate on crucial matters such as public health and environmental protection. This ICS passed a series of test with the TAFTA-CETA and TTIP.

            Even though, the European Union will negotiate this trade agreement as they want, with private consultations of the draft agreement and everything might stay secret concerning the law aspect. Despite this fact, some argues like Mariana Pena-Pinon, in a study made on Mercosur that, the best way to structure Mercosur trade agreement with EU is to establish a kind of Court of Justice where, countries would be opposed to South American agriculture companies, but the judgement would be taken depending on the constitution and the actual laws of the countries, like this no abuse could emerge throughout this trade agreement.