Why you should care
A long-awaited EU-Mercosur trade deal could be a boon to sustainable climate policy … or a cover to loot the Amazon.
This is an OZY Special Briefing, an extension of the Presidential Daily Brief. The Special Briefing tells you what you need to know about an important issue, individual or story that is making news. Each one serves up an interesting selection of facts, opinions, images and videos in order to catch you up and vault you ahead.
WHAT TO KNOW
What happened? After two decades of talks, the EU and Mercosur — the customs union made up of Brazil, Uruguay, Argentina and Paraguay — reached a trade deal on Friday. The EU’s main aim has been to reduce tariffs for European industrial products like cars, while South American leaders like Argentine President Mauricio Macri, pictured, are looking to boost exports of agricultural products. Venezuela is a member of Mercosur but was suspended from the bloc in 2016.
Why does it matter? While the deal will likely take years to be approved by EU member states and individual Mercosur governments, it comes at a crucial time for the Amazon rainforest. To get the deal signed, Brazilian President Jair Bolsonaro, a noted climate skeptic, had to agree to implement the terms of the 2015 Paris climate agreement, something U.S. President Donald Trump had reportedly been trying to convince him not to do at last week’s G-20 summit in Osaka, Japan. But some environmentalists still aren’t happy with the agreement, as it remains unclear whether it will force more accountability on climate — or merely pay lip service.
HOW TO THINK ABOUT IT
Don’t have a cow. Brazil produces 15 percent of the world’s beef, second only to the United States, and farm exports to the EU are a big draw of the trade deal. Cattle pastures are responsible for the majority of deforestation in the Amazon, and encouraging the beef industry in Brazil — especially given Bolsonaro’s proud climate change denial and brushing off of environmental concerns — is likely to contribute further to the rainforest’s devastation. The EU pledged in 2017 to eliminate deforestation from its agricultural supply chains by 2020, but scientists have since noted that imports from Brazil have fallen short of that commitment.
Or do, but OUR cow. Leaders of France, Belgium, Ireland and Poland sent a letter to the European Commission in June outlining concerns about the sustainability of South American beef farming practices. But that might be a cover: Though it’s couched in the language of fighting climate change, the EU is a big beef producer too (nearly 13 percent of global supply) and many farmers are concerned about the increase in competition, even as manufacturers rejoice in the chance to sell cars without the high tariffs of yore.
Where is the Lorax? While Europe’s insistence that Bolsonaro keep to the Paris climate goals could curb the Brazilian president’s impulses, deforestation has increased sharply since he came to power. In May, Amazon deforestation surged to a record high: An estimated 47 acres are cleared every hour. Last week, German Chancellor Angela Merkel expressed concern about Bolsonaro’s record, but didn’t seem inclined to halt talks on the trade deal. “I don’t think the non-conclusion of the agreement with Mercosur will mean that a hectare less forest will be felled in Brazil,” she said. The agreement does call for independent evaluation of how countries are keeping to the Paris climate goals, though the mechanism for that hasn’t yet been announced.
Moot points. While prominent Green politicians have denigrated the EU doing business with Bolsonaro, it may not matter after all — and not because of Brazil. Governments on both sides still need to approve the trade deal, which is closely associated with with Argentine President Macri, who’s up for reelection this fall. If he doesn’t win, the deal likely will be buried by his opposition, considering the high support for trade protectionism in Argentina.
WHAT TO READ
EU-Mercosur Deal Faces Hurdles on Two Continents, by Ryan Dube, Emre Peker and Jeffrey T. Lewis in The Wall Street Journal
“French President Emmanuel Macron, who had asked the EU to safeguard the bloc’s farmers and climate goals, called the agreement ‘a good one given that the demands we made have all been taken into account.’ ”
Can Economic Pressure Curb Jair Bolsonaro’s Anti-Indigenous Agenda? by Sue Branford in Pacific Standard
“Bolsonaro, a former Army captain, currently shows no sign of restraining his strident rhetoric and attempts to conduct policy by fiat in one of the world’s largest functioning democracies — not only angering the Congress and the courts, but also confronting one of his most important trading partners.”
WHAT TO WATCH
Leaders Cheer after EU, South America Bloc Reach Trade Deal
Watch on AFP on YouTube:
European Farmer’s Beef With Mercosur Trade Deal
“It’s about a model in which the EU does not only export goods and services, but also values and principles.”
Watch on Euronews on YouTube:
WHAT TO SAY AT THE WATERCOOLER
Hot in here. French President Emmanuel Macron was widely credited with insisting that Bolsonaro accept the Paris climate goals as a condition of the deal. Perhaps it has something to do with the record-breaking heat wave that was gripping his country: France recorded its highest temperature ever on Friday, at 113.2 degrees Fahrenheit, and the World Meteorological Organization predicts that the number of heat waves in France is expected to double by 2050.