Varadkar flags Mercosur concerns as trade deal edges closer

Safeguards are needed to ensure a trade deal with the Mercosur group of South American countries does not cause methane-producing industries like beef and dairy to simply “transfer” out of Europe, Taoiseach Leo Varadkar has said.

Brazilian president Luiz Inacio Lula da Silva said both sides intended to conclude the trade deal “this year” as European Union, Latin American and Caribbean leaders met in Brussels for a summit in a bid to forge stronger ties.

Ireland, along with France and the Netherlands, however, have called for tougher environmental protections to be included in the deal as they face pressure from their large domestic beef and dairy sectors over concerns they could be undercut from abroad.

“Ireland is one of the countries that has a difficulty with Mercosur in that we’re not satisfied that it will be adequately strong when it comes to issues like deforestation and climate and CO2 emissions,” Mr Varadkar told The Irish Times on the sidelines of the EU-CELAC summit.

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“What we’re seeking is that there’ll be an instrument added to Mercosur that would give us the reassurance that we need that we’re not just going to see methane-producing industries transfer from Europe to America,” he continued.

“That’s a concern that we hold on behalf of Irish farmers and the food industry but also a wider concern in terms of climate and biodiversity loss and deforestation.”

“We would need to be convinced that there was an instrument attached to Mercosur that was strong enough to satisfy our concerns and that’s why we haven’t been able to actively support it to date.”

Mr Lula has previously dismissed the EU’s requests for additional environmental safeguards as heavy-handed overreach.

“The conclusion of the Mercosur European Union agreement is a priority that we have and it should be based on mutual trust and not in threats,” Mr Lula told the summit on Monday.

[ EU-Mercosur trade deal ‘within reach’, says von der Leyen ]

“The defence of environmental values that we all share cannot be an excuse for protectionism.”

He told the summit that his administration had reduced the deforestation of the Amazon by 34 per cent since taking over from his predecessor, Jair Bolsonaro, and had committed to eliminate deforestation by 2030.

Spain holds the rotating EU presidency until December and has put strengthening EU ties with Latin America on its priority list.

Spanish Prime Minister Pedro Sanchez told the summit there was a “window of opportunity” to ratify Mercosur before the end of 2023, finally concluding a deal that has repeatedly stalled since talks began in 1999.

“The Spanish government and the European Commission are working intensively to achieve an agreement on those environmental climate aspects that are still outstanding,” Mr Sánchez said.

The proposed deal would end tariffs on the bulk of products sold between the EU and the Mercosur countries, potentially boosting trade in agricultural products – a concern for some environmentalists in case it drives the deforestation of land for farming.

Mr Varadkar said there was “a prospect of it being signed and agreed” before the European Parliament breaks up for June elections next year.