Environmental concerns cannot be an excuse for protectionism, says Spanish deputy minister – 03/31/2023 – Market

The Secretary of Commerce of Spain, Xiana Méndez, defended Sheet that possible concerns about sustainability, within the framework of the European Union’s trade agreement with Mercosur, cannot “serve as an excuse for a protectionist attitude”.

She also said that the additional protocol on sustainability currently being negotiated between the two parties “does not have a protectionist basis”.

Méndez, who holds a position equivalent to that of deputy minister, made a work trip to Brazil this week and participated in business meetings and meetings with authorities of the Luiz Inácio Lula da Silva (PT) government.

“In the European Union we are very clear that the objective [do acordo] is cooperating to mitigate adverse effects on the environment; that climate change is a global challenge that needs global solutions based on cooperation; and it is also clear to us that this protection [ambiental] cannot serve as an excuse for a protectionist attitude, in the sense of preventing the economic development of our counterpart. The fundamental objective of any trade agreement is to share prosperity,” said the Spanish secretary.

The trade agreement between the European Union and Mercosur was closed in June 2019, at the beginning of the Jair Bolsonaro (PL) government. At the time of the announcement, the economic team estimated that the agreement would represent an increase of US$ 87.5 billion in 15 years for the Brazilian GDP, which could reach US$ 125 billion.

Although the parties have reached a political understanding, the processing of the agreement has made little progress since 2019. The main reason was Bolsonaro’s anti-environmental rhetoric and the deforestation rates in the Amazon, which led European governments to consider it politically unfeasible to proceed with the treaty at that time. time.

Now, Méndez sees the objections related to the environment as an issue that has been overcome.

“We have no doubt about the commitment of the current government [com meio ambiente]just as we have no doubt that Brazilian environmental legislation is strict,” he said.

She also sees a “window of opportunity” to move the agreement forward with Spain’s rotating presidency in the Council of the European Union in the second half. She also believes that it is possible to conclude negotiations on the additional sustainability protocol in July, with the goal of signing it at the summit of the European Union and Celac (Community of Latin American and Caribbean States) in Brussels.

If that happens, she predicts that the Executives of the European Union and the four Mercosur countries may sign the trade agreement at the end of this year – which would send the text to a referendum in the respective parliaments.

Regarding the additional protocol currently being negotiated, she says that the purpose of the text under preparation is to ensure compliance with international commitments such as the Paris Agreement and ILO (International Labor Organization) standards. Méndez rejects that this additional protocol reopens themes already negotiated in the sustainability chapter of the EU-Mercosur agreement itself.

“Taking into account that the agreement results in an increase in industrial and agricultural activity, it is legitimate that the text has all the mechanisms of cooperation and cross-information to be able to mitigate any potential adverse effect that may occur. And even in the case that If any adverse effect occurs related to this economic expansion, it is important that we have the mechanisms to be able to cooperate and mitigate the effects on the environment and on labor standards”.

Within the EU, Spain has always been one of the countries that most defended the agreement. Resistance, in turn, is led by France, the second largest economy in the European bloc.

“Spain is a strong supporter of this agreement and we have never considered that it might not be signed. We always think about when and how, but with the certainty that this agreement will at some point become a reality. It is true that a window of opportunity has been opened. open. First, because of the current president of Brazil’s commitment to protecting the environment. And, secondly, because the Spanish presidency of the Council of the European Union can help put Latin America on the EU’s agenda in the second half, with the objective of definitively advancing all trade agreements that are pending with the region: in addition to Mercosur, Chile and Mexico”, he added.

The authority of the government of Spain also assessed that it is very difficult to reopen points already negotiated in the agreement, since it is the result of conversations that involve and affect 31 countries.

“It’s complicated because [o acordo] it is a result of the concertation of many wills and therefore we need to take into account that the intention of a state to change something can completely reopen the debate”.

The document signed in 2019 provides that more than 90% of Mercosur exports will have zero tariffs in up to ten years. The rest of exports will have partial reductions in tariffs currently imposed by the European Union, with import quotas.