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

BRUSSELS - The European Commission sent its long-negotiated trade deal with South America's Mercosur countries to EU decision makers for approval last week, hoping to close the chapter on decades of thorny talks.

The deal, struck in December, would lower tariffs between the EU and Argentina, Brazil, Paraguay and Uruguay, creating 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, which is also called the Southern Common Market, are home to the Amazon rainforest, where agricultural products like beef and soy are major drivers of deforestation, greenhouse gas emissions and biodiversity loss.

The trade negotiations spanned 25 years, complicated by political and environmental concerns, as well as the evolving global economy.    

Though the text includes climate commitments, it faces resistance from green groups and politicians who say that it lacks teeth and could fuel carbon-intensive agriculture and forest loss and undermine the EU's own green goals.

Here's what you need to know:

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

The aim of the pact is 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 would entail 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 that 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, labeled the deal "climate wrecking", saying increased trade in goods like beef, soy and poultry, which are often sourced from the Amazon, as well as 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 driving up 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 as 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 that 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 facing their farmers, although the Commission has proposed a measure to allow imports of some farm products, such as beef, to be suspended.

The deal also faces fierce pushback from climate campaigners and Green Party politicians, who say it is incompatible with the EU's climate plans and want decision-makers to reject it.

The Commission is hoping to conclude the approval process by the end of 2025, but it faces ratification hurdles in a vote at the European Parliament. It then requires the approval of 15 of the 27 EU national governments.

($1 = 0.8542 euros)

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