Mercosur: fragmented impact assessments

Use of pesticides for large-scale cultivation of GM soy in Uruguay. The feed is exported to China and the EU.
Article as analysis
After the conclusion of negotiations on the free trade agreement with Mercosur countries, the State Secretariat for the Economy commissioned an impact assessment regarding selected environmental issues. Social affairs and human rights were left out.

The negotiations on the free trade agreement between the European Free Trade Association (EFTA), which includes Switzerland, and Mercosur (Argentina, Brazil, Paraguay, Uruguay) were concluded on 23 August 2019. More than one year on, the agreement has still not been signed and published; EFTA is content to refer to a seven-page summary.

At the start of the talks Alliance Sud had called on the Federal Council for an ex ante human rights impact assessment, which it failed to undertake, citing insufficient data. And this despite having accepted a postulate submitted by the National Council Control Committee on the elaboration of a methodology.

The State Secretariat for the Economy (SECO) for its part commissioned an impact assessment, which was published on 30 June 2020, in other words long after the conclusion of the negotiations. Conducted by the World Trade Institute, the assessment concludes that the agreement offers clear advantages for Switzerland: it would boost exports to Mercosur countries by about 55 per cent, while their exports to Switzerland would increase by a mere 5 per cent. As pertains to environmental protection, the agreement would result in an increase in greenhouse gas emissions of 0.1% in Switzerland and 0.02% in the Mercosur countries. It was found that deforestation in Mercosur countries could increase by between 0.02% and 0.1 %.

Social issues and land grabbing problems overlooked

According to Elisabeth Bürgi, a senior lecturer at the Interdisciplinary Centre for Sustainable Development and Environment of the University of Bern, there are gaps in the study: “It explores three environmental issues, namely, greenhouse gas emissions, the loss of biodiversity associated with deforestation, and eutrophication. It finds that the implications for deforestation are minimal, as the status quo will be maintained for gold, soybean and beef exports. In this connection, Mercosur countries would witness a consolidation of their existing situation under the Generalised System of Preferences. Exports, inter alia, of wheat, maize (corn), wine and poultry would increase. The study nonetheless contains significant lacunae. It fails to address either pesticides, land management and land grabbing, or social issues and human rights. Nor does it explore possible way of improving the environmental status quo (soybean, gold, meat).”

The second study conducted by Agroscope at the request of the Federal Office for Agriculture also concludes that meat exports would not increase, unlike those of cereals, maize, soybean oil, pork, wine and poultry.

The question arises here as to whether the status quo should be preserved or improved upon. According to SECO, Switzerland imports from Brazil exclusively non-genetically modified soybean that does not contribute to deforestation – an assertion confirmed in a study commissioned by the Federal Office for the Environment.

GMO-free and deforestation-neutral soybean not profitable

“There is in fact a region in Brazil from which soybean is exported to Switzerland and where the product is guaranteed GMO-free and does not encourage deforestation,” Elisabeth Bürgi confirms. “Even so, I hear from producers that sustainable soybean production is not worthwhile, as the price differentials versus conventional soybean are too negligible. Tariff preferences on sustainable soybean would have to be built into the free trade agreement if the requisite price difference is to be assured. This is a very tall order considering that soybean imports are currently duty-free. But the WTO framework does allow some room for manoeuvre, as shown by the free trade agreement recently negotiated with Indonesia and in which tariff cuts were tied to the observance of social and environmental criteria. Yet this approach was not adopted for the agreement with Mercosur – either for soybean or for any other products.”

The postulate submitted by the National Council Control Committee calls on the Federal Council to devise a methodology for conducting sustainability studies. But, according to the academic, we are not there yet: “The approach is halting. Numerous studies are being prepared which highlight different perspectives and methods, which legitimise or question the agreement. While these studies do in fact help better understand the content of the agreement and its possible ramifications, they have come too late, as the dossier is already closed. An impact assessment should generate information feedback and enable the interested parties to participate in the negotiations. Answers should be provided to questions such as: Which way is the process going? How can the agreement be formulated such that account is taken not of economic interests alone, but also of environmental and social goals? The aim should be an agreement that not merely consolidates but improves upon the status quo– for example by stipulating tariff preferences for products that meet certain standards, or for processed goods – with financial support to enhance processing”.

Alliance Sud prototype study on human rights

Simply put, such an agreement would further cement the present situation in which Mercosur countries export low value-added commodities – with more or less far-reaching implications for deforestation – while importing industrial products and services. To say nothing of the reinforcement of intellectual property rights usually contemplated in such agreements and which makes it harder to access seeds and medicines. Moreover, there are other human rights-related problems, as highlighted in a prototype study commissioned by Alliance Sud[1].

With this study, the intention of Alliance Sud was to show that both a methodology and the requisite data are available. It is now up to SECO either to draw up a study or make use of this prototype study. It should encompass issues of human rights and social progress as well as a range of environmental questions – as this is what sustainable development is about. Before the parliamentary and public debate begins, the implications of this agreement for the people in the Mercosur countries must be known. Lastly, Argentina and Brazil are among the countries worst affected by the corona pandemic, which is only further exacerbating an already dramatic economic and social crisis. This could be an opportunity to improve the agreement by incorporating some constructive provisions. Or to reject it.


[1] Caroline Dommen: Blueprint for a Human Rights Impact Assessment of the Planned Comprehensive Free Trade Agreement between EFTA and Mercosur. A study commissioned by Alliance Sud, January 2020.