Is the EU-Mercosur trade deal bad for the planet?

BRUSSELS - European Union countries have signed off on the bloc's largest-ever trade deal with countries in South America's Mercosur group after months of wrangling over safeguards for European farmers who launched protests across the EU.

The deal passed despite opposition from France, Hungary and Poland, and faces final approval in the European Parliament in April or May.

Lowering tariffs between the EU and Argentina, Brazil, Paraguay and Uruguay, the accord would create one of the largest free trade zones in the world. It also aims to counter the tariffs raised by U.S. President Donald Trump, which threaten to choke international trade.

While the deal is worth billions of dollars in exports, members of the Mercosur bloc are home to the Amazon rainforest, where agricultural products like beef and soy are major drivers of deforestation, greenhouse gas emissions and biodiversity loss.

Negotiations for the deal spanned 25 years, complicated by political and environmental concerns as well as the evolving global economy.

Here's what you need to know:

What is the deal, and what are the environmental safeguards?

The pact aims to remove trade barriers and make it easier to sell goods between the two blocs, secure EU access to Latin America's critical minerals and cushion the blow of U.S. tariffs.

This entails Mercosur removing duties on 91% of EU exports, including for cars that are currently subject to a rate of 35%, over the next 15 years. The EU would progressively remove duties on 92% of Mercosur exports over 10 years.

The European Commission says the deal would help shape global trade rules in line with the "highest EU standards," including commitments on sustainable fisheries and binding commitments to tackle deforestation.

Green groups say weak provisions in the text make sustainability measures unenforceable and point to recent legislation in Brazil that weakens environmental protections.

How might it impact forests and biodiversity?

Friends of the Earth, an international network of environmentalists, labelled the deal "climate wrecking", saying increased trade in goods like beef, soy and poultry, which are often sourced from the Amazon and Brazil's Cerrado savannah, Pantanal wetland and Atlantic Forest, would lead to their destruction.

Mercosur countries are among the most affected by deforestation, and the deal could lead to the loss of 700,000 hectares of forestland to beef alone, according to an analysis from French forestry NGO Canopée and French think tank the Veblen Institute.

A rise in meat production could also threaten biodiversity through habitat loss, pesticide use and soil degradation.

Would more trade drive up planet-warming emissions?

The deal has the potential to undermine the EU's climate goals by fuelling trade in emissions-intensive goods, a legal analysis by Brussels-based Climate Action Network Europe showed.

Trade itself generates greenhouse gases, accounting for 20% to 30% of global carbon dioxide emissions, according to a 2022 report from the Intergovernmental Panel on Climate Change.

Where deforestation occurs, carbon stored by trees is released back into the atmosphere as carbon dioxide. Land use changes, mainly deforestation driven by farming, contributes 12% to 20% of global emissions, the European Commission has said.

Who supports the deal, and what happens next?

The European Commission hailed the accord for creating the world's biggest free trade zone, saying it could increase EU annual exports to Mercosur members by up to 49 billion euros ($57.36 billion) and support more than 440,000 jobs in the bloc.

Supporters, including Germany and Spain, say the Mercosur deal could offset trade losses linked to Trump's tariffs and reduce reliance on China, particularly for critical minerals.

France and Poland have previously expressed opposition due to increased competition for their farmers, although the Commission has proposed a measure to allow imports of some farm products, such as beef, to be suspended. 

The European Parliament must now approve the deal, which also must be ratified by member states before it can enter into force.

The pact has faced fierce pushback from climate campaigners and Green Party politicians, who say it is incompatible with the EU's climate plans.

Right-wing politicians in the European Parliament have called the Mercosur agreement "unacceptable" for its impact on European farmers. 

This story was updated on January 12 2026 with new developments related to the trade deal's approval.

(Reporting by Joanna Gill; Editing by Ayla Jean Yackley.)