"The Mercosur trade deal risks derailing the EU's plan to protect the world's forests," 20 December 2024

In this legal analysis, ClientEarth lawyer Michael Rice explains why the recently agreed EU-Mercosur trade deal not only contradicts the EU's flagship legislation against global deforestation, the EU Deforestation Regulation, but will potentially force the European Commission and EU Member States into legal and political disputes over its implementation. 

The European Commission has just agreed a trade deal with Mercosur countries (Brazil, Argentina, Paraguay, Uruguay), called the EU-Mercosur Partnership Agreement. While the conclusion of these decade-long negotiations has been celebrated as a success by free trade enthusiasts, the Commission seems to have shot itself and EU Member States in the foot when it comes to implementing the EU’s deforestation regulation (EUDR)...

But we are concerned that the Mercosur agreement seems to compromise the independence of Member State enforcement authorities – which could undermine the EUDR's implementation.

In particular, Articles 54, 55 and 56 of the Annex to the Trade and Sustainable Development chapter are clearly intended to allow Mercosur countries to influence how the EUDR is implemented by the Commission and all 27 EU Member States, inevitably compromising the objectivity of EUDR processes and the independence of EUDR enforcement authorities. The potential for Commission and Member State decisions and actions to implement the EUDR to be subject to the Mercosur Agreement’s dispute settlement procedure also raises obvious risks that the day-to-day implementation of the EUDR may be subject to political influence or formal disputes from Mercosur countries.

The Commission’s legal service should review these provisions very carefully during the legal review process so as not to bind the Commission or EU Member States to act inconsistently with their obligations under the EUDR...