Thursday, July 18, 2024

LATIN AMERICA | 04-07-2023 14:49

Argentina, Brazil take aim at EU's environmental trade deal terms

Argentina and Brazil slam "unacceptable" EU stance in negotiations with the Mercosur bloc for long-delayed free-trade deal.

Argentina and Brazil, South America's largest economies, took aim Tuesday at an "unacceptable" EU stance in negotiations with the Mercosur bloc for a free-trade deal long delayed due to stated European environmental concerns.

Mercosur countries Argentina, Brazil, Paraguay and Uruguay reached an agreement in principle with the 27-member European Union in 2019 after two decades of tough negotiations.

The EU has since proposed a "side letter" to the agreement with extra environmental requirements, angering South American leaders who suspect protectionism was at work.

Brussels wants any deal with Mercosur nations to include compliance with commitments made under the 2015 Paris climate accords.

At a two-day summit in Puerto Iguazú, Argentina, Tuesday, Mercosur leaders hit back. 

The latest proposal, said Brazil's Luiz Inácio Lula da Silva, "is unacceptable."

"Strategic partners do not negotiate on the basis of distrust and the threat of sanctions," he told the meeting. "We are not interested in agreements that condemn us to forever be exporters of raw materials, mineral products and oil."

Argentina's President Alberto Fernandez echoed this point, saying: "No-one can condemn us to be suppliers of the raw materials that others industrialise and then sell to us at exorbitant prices."

Fernández added the EU "presents us with a partial vision of sustainable development, focused excessively on the environmental" aspect.

Tuesday's heads of state meeting, following a gathering of ministers Monday, was also attended by the presidents of Uruguay and Paraguay Luis Lacalle Pou and Mario Abdo Benítez.

Also present was Luis Arce, the leader of Bolivia, which hopes to become a member of the Mercosur trade bloc.

Observers have low expectations for the summit's ability to give final shape to the pact stalled by EU concerns over environmental protections, particularly in the Brazilian Amazon. 


The grouping, founded in 1991, represents 62 percent of South America's population and 67 percent of the continent's gross domestic product.

Its trade deal with the EU became held up under the 2019-2022 presidency of Lula's far-right predecessor Jair Bolsonaro, on whose watch Amazon deforestation surged.

While veteran leftist Lula has cast himself as the anti-Bolsonaro on environmental policy, he told European Commission head Ursula von der Leyen in June he had concerns over the additional environmental guarantees.

"No-one in the world has the moral authority to discuss with us the issue of clean energy," Lula said in an interview with Brazilian public television shortly before Tuesday's meeting.

The EU's top diplomat, Josep Borrell, acknowledged recently that the environmental proposals were not well received by the South American countries and said Europe was awaiting a concrete response.

Lula said his government was preparing a counter-proposal to take to Brussels, hosting a summit of the EU and the Community of Latin American and Caribbean States (CELAC) on July 17 and 18.

"It is imperative that Mercosur presents a rapid and forceful response," said Lula, who is taking over Mercosur's rotating presidency until the end of the year.

On Monday, Argentina’s Foreign Minister Santiago Cafiero called for the 2019 agreement to be “updated” as it is “an unequal effort between asymmetrical blocs."

Cafiero pointed out that under the draft deal, Mercosur will scrap tariffs on 95 percent of agricultural imports from Europe, which reciprocates with only 82 percent.

And he said the agreement as it stands had an excessive focus on environmental issues at the expense of economic and social considerations in largely agricultural and developing Mercosur members.



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