European Commission publishes final Sustainability Impact Assessment and Position Paper on the EU-Mercosur Trade Agreement

The European Commission published today the final version of the Sustainability Impact Assessment (SIA) on the potential economic, social, environmental and human rights impact of the trade part of the association agreement between the European Union and the Mercosur countries (Argentina, Brazil, Paraguay and Uruguay). In addition, the Commission published a Position Paper with comments on the main findings and recommendations of the SIA report.

The SIA is an independent report carried out by the London School of Economics and takes into account contributions made by interested stakeholders, ensuring a high degree of transparency. The Draft Final Report was published on 8 July 2020.

According to the SIA, the EU-Mercosur agreement will have a positive impact on the economies of both blocs and can contribute to the recovery from the economic crisis caused by the current pandemic. The importance of this agreement goes beyond economic benefits: it will consolidate a critical partnership between the two blocs based on common values.

The SIA notes that the EU agricultural sector will also benefit from the agreement. The reduction of non-tariff barriers and the protection of EU geographical indications in Mercosur countries will increase substantially agricultural and food exports. .

The report found that appropriate policies, enforcement activities and market-based initiatives can prevent any major impact of the trade agreement on deforestation in Mercosur. Similar policies and initiatives implemented in Brazil between 2004 and 2012 resulted in a decline in deforestation while agricultural production rose.

The SIA also highlights concerns about the agreement's potential impact on environment, human rights and indigenous people. It makes recommendations aimed at minimising this impact.

These issues were very much at the heart of the EU’s approach in negotiating the agreement. The trade and sustainability development (TSD) chapter provides an adequate legal framework and the proper tools to address these concerns.

The Commission has made clear that it needs meaningful results and engagement from Mercosur countries before it can propose the agreement to the Council and Parliament for signature and conclusion. Addressing sustainability challenges such as deforestation will require clear, firm commitments and measurable sustainability objectives.

The Commission is therefore engaging with Mercosur countries to seek real progress on commitments on the Paris Agreement and deforestation. In December 2020, Mercosur and the EU reiterated at ministerial level their commitment to implementing the trade deal effectively and officials have intensified contacts with a view to identify specific and measurable sustainability commitments.

The Commission is currently finalising the legal revision of the agreement and fine-tuning some technical details, together with Mercosur; the following step will be to proceed with the translation into all EU official languages before the Agreement is submitted to the Council and the European Parliament for signature and conclusion.

For more information

Final report

Executive summary (also available in FR, DE, ES and PT)

Position paper