The environmental stakes of the EU-#mercosur deal

[00:00:00] Speaker 1: Good morning everybody and thanks for joining us for this webinar about the environmental stakes of the EU-Mercosur deal which is currently being negotiated between the EU and the five Mercosur countries. We are very happy to welcome you. This is an initiative from IEP, the Institute for European Environmental Policy and the Green Trade Network which is a group of over 20 research organizations trying to promote an agenda for a better alignment of trade policies with environmental and climate objectives. I'm very happy to have gathered this panel of experts from different backgrounds, different perspectives, all members of the the Green Trade Network. So with us today we have Dr Marcus Gehring who's an associate professor at the legal faculty of the University of Cambridge and Trade Council at the Center for International Sustainable Development Plan. We have Mathilde Dupré who's the director of the Veblen Institute for Economic Reform, Virginia Ansel from Fairtrade Advocacy Office EU and Antoine Auger who's the research director of IEP. So together I think it's a very timely conversation to have. There's been massive farmers protests recently around the EU-Mercosur and we as IEP have received a lot of questions from journalists, from stakeholders regarding this agreement. Why is it such a problem? How could it be done better? What is the way forward? Is it going to be blocked? Many, many questions that this panel will try to address. This is a conversation that is made for you who attend the webinar. So we very much encourage you to ask your questions, write them in the Q&A section. So then we'll be responding to your questions. We'll have it in two different segments. First of all, the panelists will be given five minutes maximum for their introductory remarks. And then we'll have another 30 minutes to respond to all the questions to all the questions you might ask yourself. So yeah, one of the main questions I think is where do we stand? What's on the table? What's on the table? What is what is the Q&A section? So then we'll be responding to your questions. We'll have it in two different segments. First of all, the panelists will be given five minutes maximum for their introductory remarks. And then we'll have another 30 minutes to respond to all the questions you might ask yourself. First of all, one of the questions I think is where do we stand? What's on the table? What is legally feasible? I also wanted to mention that we have. So one of the reasons why we gathered this panel today is because with Green Trade Network members, we've worked on this report, which is a report on alternatives for a fair and sustainable partnerships between the EU and the EU, where we've worked on the EU, where we've tried to be both ambitious and pragmatic and look at ways forward to enhance the deal. And yeah, look into how necessary certain provisions are, how to make it also more aligned with the revision of the trade and sustainable development strategy that the European Commission set itself. And yeah, and try to see a few alternatives that would help break the deadlock that is currently faced by the negotiating parties. So without further ado, I'd like to turn to Marcus Gehrig for an overview, a legal overview, including of the sign letters that have been submitted by both parties. So what's your opinion about where we are at Marcus? I know you've been working on a lot of different FTAs in the past, so you also know how much of a great cooperation platform an FTA can be. So what do you expect now from the negotiations moving forward? [00:04:05] Marcus Gehrig: Marcus Gehrig: Thank you very much, Pierre, and thank you to everyone on this call for joining us. I think from a perspective, if we just benchmark the available drafts, the available side letters, it's very clear to us that this trade deal is much less progressive than the best-in-class trade agreements that the EU has concluded in the future. Marcus Gehrig: Now granted, the Mercosur agreement has been negotiated for almost two decades, 30, 40, nearly 40 rounds of negotiations. Marcus Gehrig: But the text that was published almost four years ago was a real disappointment. Marcus Gehrig: It followed the early 2000 model of EU trade agreements and is no longer timely, especially when it comes to the sustainable development commitments. Marcus Gehrig: We have seen agreements that make the compliance with the Paris Agreement an essential element. Marcus Gehrig: EU New Zealand, but also if you want the best-in-class agreement is the EU-UK TCA, where we do not just rely on decrying climate change as an existential threat to humanity. Marcus Gehrig: But rather adapting concrete levels of climate protection that both sides of the agreement have to fulfill. Marcus Gehrig: So we are astonished that the Commission is not much more ambitious with the agreement has not really reopened the. Marcus Gehrig: The initialed text we don't understand that because we've seen much larger changes in the legal scrubbing process, for example, for the CETA agreement, so they could have been. Marcus Gehrig: A reopening of text instead the the parties seem to pursue the side and the side agreement route, which we think is legally inferior. Marcus Gehrig: Because it's not entirely clear how the side letters and how the side agreements will directly relate to the main agreement. Marcus Gehrig: We also don't think that what we would call the Chilean option is a good version, a good option for the EU-Mercosur agreement, because the Chilean option, just to remind everyone. Marcus Gehrig: Included a reform of the underlying FTA and then made. Marcus Gehrig: Quite a few promises to renegotiate, for example, the sustainable development chapter. Marcus Gehrig: With a view to including the Paris Agreement as an essential element of the new trade treaty. Marcus Gehrig: But that depends on a lot of trust and a lot of goodwill on both sides. Marcus Gehrig: In the EU-Mercosur relationship, especially with the antics of the government of Argentina. Marcus Gehrig: I don't see that level of trust so as a lot would strongly recommend to not to rely on. Marcus Gehrig: So the future promises of inclusion of the Paris Agreement. Marcus Gehrig: The what we've seen and i'm just coming back from baku what we see in baku. Marcus Gehrig: Was an absolute disaster where the Argentinian diplomats and government officials were ordered by the presidential office. Marcus Gehrig: To withdraw from the climate negotiations and we see in the many advisory opinions that are coming online that the the bare minimum. Marcus Gehrig: You have to do under the Paris Agreement is to. Marcus Gehrig: To you know attend the ministerial conference and negotiate in good faith. Marcus Gehrig: We haven't seen that from Argentina, because there are no good reasons to start the negotiations have the government officials there and then withdraw. Marcus Gehrig: So i'm really worried that disagreement the side letters and we haven't seen the exact content. Marcus Gehrig: are not yet ready to be signed by the European Union. Marcus Gehrig: Yes, it's been a long process. Marcus Gehrig: Yes, we've. Marcus Gehrig: We've. Marcus Gehrig: We've all been analyzing the existing drafts. Marcus Gehrig: But unless we make the Paris Agreement and maybe even biodiversity an essential element of our future training relationships. Marcus Gehrig: We can't maintain the high level of climate protection and of nature protection that we have in the European Union, and I should highlight that. Marcus Gehrig: With the Center for international sustainable development law CSDL we've now done series of studies and not just sort of from the EU side, but especially from the Latin American side and what we're hearing from the Latin American side, especially the NGO sector. Marcus Gehrig: Is that the the the EU should not just rush into an agreement or rely on. Marcus Gehrig: Any kind of future promises, but rather. Marcus Gehrig: But rather have firm commitments, ideally, in the main text of the trade agreement and then fill it with lies. Marcus Gehrig: Once the agreement has been signed and ratified so with that, thank you very much, Pierre and i'm happy to answer any questions. [00:10:29] Speaker 1: Marcus Gehrig: Thank you so much, Marcus and we'll get back to you then during the Q amp a session, I just want to remind the participants to put their questions in the Q amp a section. Marcus Gehrig: For the last 30 minutes of the discussion where it will will be able to respond to your questions. Marcus Gehrig: Matilde I'm turning to you now, France has been leading the charge, I would say, against the deal for many years now and something that is that they continue to be to be doing. Marcus Gehrig: You've been highly involved in the debates, both in France and Brussels on the compatibility of this deal with our environmental objectives. Marcus Gehrig: So, of course, we won't be able to address in an hour all the mistakes that are related to this deal. Marcus Gehrig: We will focus on an environmental perspective to what can be achieved and how bad is it. Marcus Gehrig: So i'm telling to you for your analysis of the environmental impacts that the deal can have and how do you see the. Marcus Gehrig: The way forward in the in a future collaboration with between the EU and the macroso countries which would rely on more sustainable principles. Marcus Gehrig: Thank you. Matilde. [00:11:47] Speaker 3: Matilde Martins: Thank you very much. So I won't repeat what Marcus said, but I wanted to raise this issue at the beginning to say that if the discussion had been stopped since 2019 it was because there was this kind of new doctrine from the EU not to grant trade preferences to countries. Matilde Martins: That are. Matilde Martins: That. Matilde Martins: cheered by. Matilde Martins: President that are. Matilde Martins: Well, denying the climate commitment on the international scene and we don't really understand why this wouldn't be the same with the current Argentinian government right now, so this is the first. Matilde Martins: First opening remark I wanted to raise and now yeah we as we we've written in the in the report. Matilde Martins: The. Matilde Martins: The problem. Matilde Martins: Is that we have some big flows in the agreement itself. Matilde Martins: First of all, the EU agreement is is risking to try to make us countries in an unsustainable agro export model and further primaries. Matilde Martins: Primer raising their economies. Matilde Martins: And. Matilde Martins: Second, we can see that the the proposed trade agreement is is. Matilde Martins: Planning to to boost exchange of goods and services in all sectors and regardless the impact on the environment. Matilde Martins: So this is something that we've been. Matilde Martins: Highlighting a lot, for instance, this includes certain band pesticides or certain single use plastic product. Matilde Martins: That are forbidden in the EU markets to be exported. Matilde Martins: With the with lower tariff in the Latin American countries, and this is something that we should completely revisit in our new negotiation. Matilde Martins: So we know that Brazil is already the second largest importer of banned pesticides manufactured in the EU and even the largest importer of EU banned neonicotinoids. Matilde Martins: And as a boomerang effect, the EU is already importing a lot of agricultural goods treated with those banned pesticides. Matilde Martins: Because Brazil is already importing goods goods in the European Union and. Matilde Martins: Well, this agreement will further lower trade tariff and trade buyers for all those agricultural exports. Matilde Martins: This is at the heart of the discussion right now in France, I don't know if you've. Matilde Martins: heard the debate in the in the National Assembly on Tuesday and in the Senate yesterday, but this issue of the norms of production. Matilde Martins: Is really main concern from. Matilde Martins: Almost all the political groups. Matilde Martins: And well it's it's something that should have been avoided. Matilde Martins: If we if we would have followed the recommendation of the sustainability impact assessment conducted in 2009 for the EU. Matilde Martins: Which was advising that tariff preferences should be made conditional on effective compliance with sustainability criteria for all the most sensitive product from a climate and biodiversity point of view. Matilde Martins: But at that time, the answer from the Commission was to disregard this recommendation because the Commission was considering that it was not the scope of trade agreements to deal with those issues, and it was only. Matilde Martins: Something to be dealt at the domestic level, and this is, I think, now the. Matilde Martins: The main problem then that we are facing if we want to align our trade agreements with our international commitments on climate or on biodiversity, we need to enter in this discussion and it's. Matilde Martins: Easy it's it's not easy it's complex and it can create some tension, but it's really crucial and then the other point I wanted to raise is about deforestation. Matilde Martins: Because it was also something that was highlighted by the expert committee set up by the French government in 2020 and the expert committee said that only for beef. Matilde Martins: It could increase the agreements implementation could increase the deforestation. Matilde Martins: Between 5 and 25% per year for the sixth first year of the implementation of the of the agreements, so this is something that could have been. Matilde Martins: partially mitigated by the implementation of the European deforestation regulation adopted in 2023. Matilde Martins: But this regulation. Matilde Martins: which has been strongly opposed by Microsoft countries and other EU trade partners is not at risk. Matilde Martins: And there's. Matilde Martins: New discussion on the content and on the date of implementation so. Matilde Martins: Again, we can see here all the tension between the EU ambition in the implementation of its international environmental commitment, including for its own consumption. Matilde Martins: So for imported product and the fact that the free trade agreement that we are negotiating are not adjusting to this changing paradigm that we are trying to build. Matilde Martins: And for the next steps of just maybe to say that, of course, there's a strong. Matilde Martins: Interest geopolitical interest to keep discussing and to keep. Matilde Martins: Building partnership with those Latin American country, but maybe we should think about more specific. Matilde Martins: and more focused. Matilde Martins: agreement on on on very. Matilde Martins: Restricted areas, for instance, on raw material. Matilde Martins: and try to figure out how could be a win win agreement in raw material. Matilde Martins: Also for for the planet and the people living in the. Matilde Martins: Exploitation areas and not with so many different sectors. Matilde Martins: included in a in so broad trade agreements. Matilde Martins: Thank you. Matilde Martins: Thank you. [00:18:34] Speaker 1: Matilde Martins: And also, thank you for providing a great segue to our next speaker. Matilde Martins: Virginia, you were also a lead author of this report. Matilde Martins: Alternatives or Fair and Sustainable Partnership between the EU and Mercosur. Matilde Martins: One of the alternatives that are explored in the reports is actually what Matilde just mentioned, narrowing down the scope of the trade integration between the two blocks. Matilde Martins: Since you work for the fair trade movement, I think you also have this perspective of what Global South partners expect sometimes from partnership policies and and from trade agreements. Matilde Martins: So if you could come back to one of the one or several of the alternatives on which you've worked in the reports and also tell us. Matilde Martins: How could this become a win win arrangement without staying so what we wanted to consume and what we accept on our markets unilaterally. Matilde Martins: How can this process of strengthening the sustainability requirements become something more more collegial between the two parties. Matilde Martins: So thanks again for for joining us Virginia and the floor is yours. [00:19:41] Speaker 4: Matilde Martins: Thank you Pierre and thank you for everyone joining this webinar. Matilde Martins: I hope it will be bringing relevant insights into this conversation. Matilde Martins: So I guess that we all are very aware of the latest developments on both sides of the Atlantic, no need to go there. Matilde Martins: But something that is actually been published, as we speak, is that if they always part of the European trade justice coalition and together we have drafted a declaration that has been signed for over 400 different organizations. Matilde Martins: And we're calling or highlighting a lot of concerns around the deal. Matilde Martins: What is not reassuring here is the lack of transparency, the lack of scrutiny, the lack of public participation. Matilde Martins: Also, the fact that the Commission is now considering to change the voting process through the splitting of the deal, as it was done with Chile, which would allow to bypass individual country vetoes. Matilde Martins: That's also not reassuring goes to the point of lack of scrutiny. Matilde Martins: This is also a move that has already been condemned by civil society and by different parliamentarians, but that the Commission seems to disregard along the way. Matilde Martins: When we look at main environmental risks and main pitfalls, as has been highlighted by Mathilde, the deal would exacerbate an equal exchange between the global south and north countries. Matilde Martins: The deal would also drive deforestation exacerbated climate crisis and promote destructive agricultural models and all the environmental aspects. Matilde Martins: But it would also have negative consequences on social and economic aspects that should not be disassociated from the environmental impact. Matilde Martins: That's one of our main points to look at the social, economic and environmental impacts together when we are talking about America. Matilde Martins: And when we talk about the social and economic aspects more in detail. Matilde Martins: There are studies already showing that the deal would threaten food sovereignty in Mercosur countries that workers in Mercosur countries would suffer job losses and the worsening of our labor condition with women being more harshly impacted here. Matilde Martins: So, in this sense, an environmental annex and additional protocol as has been put forward and would not mitigate the long term damage looks a bit more like a greenwashing exercise. Matilde Martins: And in that sense, I come to the report that we have worked with with IVP colleagues and one of the alternatives that FDIO developed was one that looked at a bilateral partnership on sustainability issues. Matilde Martins: Without access to market, which meant higher level of cooperation with low level of market integration and what is interesting about this sustainability partnership. Matilde Martins: Is that would definitely put sustainability at the core, it would work on the basis of other initiatives like the US Brazil joint global initiative to advance the rights of working people around the world. Matilde Martins: You would put the 2030 agenda at the center, it would link to multilateral environmental agreements with the Paris agreements, the CBD, the global biodiversity framework, etc. Matilde Martins: And it would have certain components for support implementation of new EU market access requirements, which is something relevant for the FDIO. Matilde Martins: This would look at specifically targeting processes that seek to avoid and mitigate the impacts embedded in EU regulation. Matilde Martins: Ensuring that smallholder families and workers, for instance, are able to make a decent living when they are supplying EU markets. Matilde Martins: This should be a central point in set sustainability partnership with the Mercosur country. Matilde Martins: And just to close my intervention. Matilde Martins: Another main points that this sustainability partnership should look at is. Matilde Martins: be built on the basis of country priorities so something that has been mentioned in the trade and sustainable development review was this country by country approach. Matilde Martins: This is something that should be definitely part of a potential sustainability partnership. Matilde Martins: There should be work on the basis of minimum objectives, for example, tackling the underlying drivers of sustainability issues that are relevant to the countries. Matilde Martins: There should be core requirements, for example, having a right based approach to solving issues or having multi stakeholder and inclusive processes for the decision making processes. Matilde Martins: A whole or like a core part should be also on incentives looking at, for example, national disability systems in benchmarking, especially for deforestation. Matilde Martins: Having a sustainable transition fund and having tools in there to reduce policy buyers that prevent smallholders from receiving a living income. Matilde Martins: Having temporary commodity import bonds and looking deeper into sustainable public procurement, etc. Matilde Martins: And a final component would be to have a financial package that contributes to the transition of the Mercosur region to clean and circular economy. Matilde Martins: Now, I will stop there for now. Matilde Martins: Thank you. [00:25:10] Speaker 1: Matilde Martins: Thank you Virginie and i'm sure there will be questions about the different approaches. Matilde Martins: Between the EU and China, for instance, to addressing deforestation and how different parts of the world are actually throwing money at the deforestation problem and well our position better in this in this context. Matilde Martins: But it was very interesting the overlap in agendas with the acceleration of the conclusion agenda on the side of the European Union and the Commission, and at the same time, the release of the ACCTs. Matilde Martins: Which is also with a few countries proving that actually you can put sustainability as an overarching objective of something that resembles a trade agreement with preferences unlocking depending on on objectives. Matilde Martins: Agreed upon by both parties, liberalization of green goods and services, phasing out fossil fuel subsidies, etc. Matilde Martins: All of this can be better integrated, the ACCTs is kind of proving it. Matilde Martins: So, yes, there are examples that show that this change in paradigm of how you use trade policy to achieve multiple objectives. Matilde Martins: Well, still needs to be. Matilde Martins: operationalized from the EU side and that's something that we are still. Matilde Martins: expecting one of the things that our reports at AP and I'm thinking of. Matilde Martins: Antoine's work and our colleague, Aileen Blow's work on tailored provisions in trade agreements was something that was also mentioned in the revision of the trade and sustainable development strategy of the European Commission, but which doesn't appear here. Matilde Martins: I've seen I've seen I've seen questions very interesting on Paris agreement and could we single out certain countries depending on the violations of specific provisions of the various agreements will come back to this. Matilde Martins: In a later stage, but I wanted to first turn to Antoine. Matilde Martins: For. Matilde Martins: I think a more general question of the political process and the tensions that the negotiation of the agreement has triggered. Matilde Martins: We see that now the Commission is seriously contemplating splitting the agreement passing first to the trade component, but they still need to overcome the risk of. Matilde Martins: Blocking minority which would need 35% of the European population and at least four countries, do you see this happening with so how do you see the order the political. Matilde Martins: Context evolving here in the EU, there were questions also related to this how likely do you see it's being being finalized I think it was from from WWF from Jack. Matilde Martins: Thank you. [00:27:57] Speaker 5: Matilde Martins: Thank you very much Pierre and good morning still to everyone. Matilde Martins: Thank you very much for participating to this to this webinar. Matilde Martins: So on that particular point, I would not want to repeat what has been said on the merits of the other challenges or the issues that that are coming with this EU Mercosur trade agreements. Matilde Martins: When to take a bit of a bigger political picture, let's say, saying that we all know that trade deals have never been a smooth ride. Matilde Martins: That's never been the case. Matilde Martins: It was in the past. Matilde Martins: One can remember the TTIP at the time between the EU and the US etc. Matilde Martins: Even at a time when potentially the geopolitical environment would have been more favorable to such trade agreements. Matilde Martins: Yet still this was not a very, very easy way forward. Matilde Martins: So that's nothing new. Matilde Martins: But here I think we are reaching new heights in terms of tensions. Matilde Martins: I mean, now I'm afraid that the agreement is not even looked at in its own merit issues or challenges anymore. Matilde Martins: I mean, the narrative within the EU to try and hide some of the most potentially problematic sustainability related issues that we've just outlined is really to put this agreement as a more geopolitical tool. Matilde Martins: Like this is a way here to make sure that we strengthen trade relations with, if not like-minded, but at least strategic partners in a context where the election of Trump in the US and the potential enactment of new tariffs once again, Matilde Martins: That could jeopardize the military trading order or, of course, the importance of China for the exports of their countries, including our beef, for instance, as a potential trade diversion effect if the Mercosur deal was not to be signed. Matilde Martins: But again, that's not based on the merit or not of the agreement. Matilde Martins: These are broader geopolitical considerations that come into play that are coming to the defense of the agreement. Matilde Martins: So that I'm not saying that we should just avoid or dismiss such considerations, but they are at a higher level. Matilde Martins: And then when we talk about tension, looking internally within the EU is absolutely staggering. Matilde Martins: Of course, we have the opposition more and more vocal from farmers. Matilde Martins: 2024 has been marked by a number of farmers' protests. Matilde Martins: This is still ongoing and the Mercosur deal is still very much as a new threat. Matilde Martins: And this is interesting now to see the political family of the European Commission President, Matilde Martins: the European People's Parties, who have been adamant to sign this particular deal, Matilde Martins: not taking a somewhat sort of cautious approach because it goes against their other main narrative, Matilde Martins: which is the defense of the farming community in Europe. Matilde Martins: So there's a major tension within that particular political family as we speak. Matilde Martins: And of course, there's a playing game going on as to whether this is the challenges experienced by farmers within the EU Matilde Martins: is more important related or more due to what is called regulatory burden, sustainability regulatory burden. Matilde Martins: So there's this playing game being played at the at the moment. Matilde Martins: But nonetheless, we have major tensions within political families in the in the EU. Matilde Martins: We also have tensions within the executive. Matilde Martins: We understand. Matilde Martins: We know that the TG trade, which has been leading the negotiation of the EU Microsoft trade deal, Matilde Martins: might hold very different views from other TGs within the Commission, Matilde Martins: especially those that have been at the heart of the enactment of these new autonomous measures, Matilde Martins: such as the EU deforestation regulation and so on. Matilde Martins: So there's a major tension there as well, Matilde Martins: which doesn't make the projection of a consistent EU external policy very, very easy. Matilde Martins: Again, that's never been the case, it's not since Kissinger that we don't have one phone call. Matilde Martins: That's still not the case, but that doesn't make it easier at all. Matilde Martins: Eventually, when looking forward, so whether or not the deal is going to be signed is impossible to say. Matilde Martins: I think I'm happy to hear from everyone here. Matilde Martins: But what we're looking at at the moment is at least four member state countries opposing the deal. Matilde Martins: That's France, Poland, Austria and Ireland, if I'm correct. Matilde Martins: In and of itself, as Pierre has mentioned, this is not yet there to formally reach the minorities that could block the agreement. Matilde Martins: So it's still possible. Matilde Martins: But before we get to that, countries have to agree to split the agreement, Matilde Martins: because at the moment it's a larger agreement, it's not just a trade agreement. Matilde Martins: It involves some political considerations and that requires council unanimity, Matilde Martins: which the Commission will not have because, for instance, the French cannot just overcome the fact that the National Assembly Matilde Martins: just recently overwhelmingly voted against the agreement. Matilde Martins: That's something that cannot just be brought aside. Matilde Martins: So the anonymity is not there. Matilde Martins: That means if you want the agreement, you need to split it, you need to split the trade part. Matilde Martins: And then you can get into the qualified majority voting. Matilde Martins: And even so, first of all, countries opposing the deal need to agree to split the deal, Matilde Martins: because you need anonymity to split. Matilde Martins: And then once you get there, you need the qualified majority. Matilde Martins: And this is a very, very shaky straightforward. Matilde Martins: So it's very hard to say, it's impossible to say at this stage whether or not the deal would be agreed upon, Matilde Martins: but it looks extremely challenging to say the least. Matilde Martins: But again, happy to hear from others on the map. Matilde Martins: To conclude, Matilde Martins: I think the EU is again, once again, struggling with its inattention of protecting values versus interest. Matilde Martins: It provides contradictory messaging, contradictory narratives, Matilde Martins: and that makes its positioning extremely hard to read for external partners. Matilde Martins: On the one hand, we are adamant that we have high ambition of the climate objectives and sustainability objectives and so on. Matilde Martins: We aim to be vocal in the COP process and so on. Matilde Martins: And then we have these autonomous measures that come into play that exporting countries might be much less favorably a bond. Matilde Martins: And then these free trade deals that seem to contradict, that means to just again support this model of commodity lock-in. Matilde Martins: That Matthew was speaking about this might be quite contradictory again. Matilde Martins: I think something that we've said a lot recently at IEP is that the EU currently lacks this sort of tool, the actual partnership that can be meaningful for both parties. Matilde Martins: This is also something that Virginia has been mentioning. Matilde Martins: Whether these are mini deals or critical material specialized deals or whether these are more overarching partnership, Matilde Martins: but we connect much more the trade realm with the cooperation realm, with the finance realm, Matilde Martins: so that eventually we can make a compelling picture as an EU, a complete picture to partner countries to eventually engage into win-win scenarios. Matilde Martins: At the moment the EU doesn't seem very, very equipped to do that. Matilde Martins: And yet that's absolutely necessary if we want to navigate the current world in crisis, in my view. [00:34:54] Speaker ?: Matilde Martins: Thank you. [00:34:55] Speaker 1: Matilde Martins: Thank you, Antoine. Matilde Martins: I see that there is a little debate currently happening in the chats, which is great. Matilde Martins: I mean, this is why we organize this webinar is also to confront views, confront information that we have Matilde Martins: on the likeliness of a presentation of the deal at the Montevideo submit on end of next week. Matilde Martins: But I'd like to now turn to the questions that were posed in the Q&A section, because there were some of them on different topics. Matilde Martins: But let's start with maybe the Mousteki ones on the legal aspects of making the Paris Agreement an essential element. Matilde Martins: One question from Charles. Matilde Martins: Thank you, Charles, for your question. Matilde Martins: Would it require reopening the agreement, or is it possible to do it through a side letter? Matilde Martins: Olivier also in the chat puts the question of whether we could single out a country, or whether this would impact the entirety of the five Mercos War countries, Matilde Martins: especially if we could single out Argentina in the context of what just happened at COP. Matilde Martins: So let's just start with that, and Marcos, I'm turning to you because you're the lawyer, the expert in the room on all these questions. Matilde Martins: So and then we'll get. Matilde Martins: Yes. [00:36:19] Speaker 3: Matilde Martins: Sorry to interrupt, but there's another one from this in the other tool also about the Paris Agreement. [00:36:28] Speaker 1: Matilde Martins: Yes, okay. Matilde Martins: Sorry, yeah, I was looking at the chat on you, but now this indeed is asking what Marcus thinks of the added value of the Paris Agreement as an essential element, saying that they are quite skeptical, Matilde Martins: considering the experience with the human rights clauses of EUFTAs. Matilde Martins: Yeah, so that brings another element of discussion. Matilde Martins: We have the previous experiences of human rights violation and sanction processes and everything, so how do you see it. Matilde Martins: yeah what's your reaction to this question Marcus. [00:37:00] Marcus Gehrig: Matilde Martins: Yes, thank you very much, especially to this of course. Matilde Martins: The macros who agree can increase greenhouse gas emissions, maybe even on both sides. Matilde Martins: But the whole point of the Paris Agreement is that we have naturally determined contributions that are actually adhered to and ideally fully implemented. Matilde Martins: I'm I'm quite positive about what making the Paris Agreement an essential element can do, because it doesn't just. Matilde Martins: it's not just confined to the question of material breach or suspension of the entire agreement, it also colors the interpretation of all clauses. Matilde Martins: And the interpretation of individual elements of the agreement right so it it really has more impact than just relying on clause itself, I would say, as it's currently drafted is not really intended to use to suspend the entire trading agreement. Matilde Martins: which which theoretically could happen, but it has strong interpretive and signaling function for the interpretation of the entire list of the agreement, and I include the agricultural chapter in that. Matilde Martins: I think if we interpret some of the agricultural commitments in the light of the Paris Agreement in the light of the long term. Matilde Martins: climate objective it becomes a very different meaning and that's where I see the. Matilde Martins: The real value of including the Paris Agreement or the global by diversity framework as an essential element. Matilde Martins: yeah I don't think you need to open the entire agreement can be done in a side agreement as long as the side agreement is intrinsically linked. Matilde Martins: With the main agreement and that can be a problem right, so it really depends on the interest of the parties, we have a little. Matilde Martins: explainer of this with footnotes in the in the brief. Matilde Martins: That we all all our organizations put together. Matilde Martins: it's if if if it's just an interpretative. Matilde Martins: side letter with not the same legal value as an international treaty then no. Matilde Martins: But if it's linked and given in the main agreement, the same legal status right think of the Charter of fundamental rights being referenced in. Matilde Martins: The treaty on European Union right that kind of linkage of agreement would then make the Paris Agreement and essential element, not just of the side letter. Matilde Martins: But of the entire agreement, but it really depends on the legal detail and, of course, to be absolutely certain we would need to reopen the main agreement. Matilde Martins: At least to give the same legal value to the side letters in in my view and. Matilde Martins: Any any party any country any entity can can breach right, so what we can't do. Matilde Martins: Is. Matilde Martins: So the the question about Argentina, for example, and there it would constitute a breach of the EU macro sewer agreement with potential consequences for all macro sewer countries that's being part of these into regional agreements. Matilde Martins: It happens to the EU a lot by the EU had a lot of disputes against it in, for example, the double tool when the measure just came from one or two Member States that is inherent. Matilde Martins: In this kind of relationship, and I think it's going to become much more important we'll see quite a few breaches of the Paris Agreement. Matilde Martins: Come October come February 10 when 2025 when the new ndc are due. Matilde Martins: Because not very many countries have actually updated and increase the ambition in there and actually determine contributions i'm quite. Matilde Martins: Positive about Brazil Brazil's new ndc is really worth reading for all of us, because it contains. Matilde Martins: Really important policy developments and you've heard 10 days ago the ETF. Matilde Martins: Past the final parliamentary hurdle, so there will be an ETS. Matilde Martins: measure in Brazil, which I think is very, very positive and you know has to do with the relationship between Brazil and the European Union, in my view. [00:42:32] Speaker ?: Matilde Martins: Yes, I think. [00:42:33] Speaker 3: Matilde Martins: But can I have just. Matilde Martins: Something quickly. Matilde Martins: We have the same. Matilde Martins: The same assessment of the human rights essential clauses. Matilde Martins: Because they were perceived in some way as a nuclear weapon know if we suspend all the agreement. Matilde Martins: Well, it has never been done properly and and if we have this issue of having a block and not only a country it's it adds a layer of complexity also so it's I think it's it's. Matilde Martins: reinforced the probability for such a close for never being used, so I would really say that it's not enough to add such a clause, even if it would be agreed by both. Matilde Martins: blocks it wouldn't be enough to to make the deal aligned and compliant with our international commitment and maybe also one thing that we were. Matilde Martins: Looking at looking at the blend was also to try to to to to be more precise in this essential element close. Matilde Martins: What could be put in the what is the implementation of the Paris Agreement and, for instance. Matilde Martins: finance climate finance from from developed countries could also be something that could be included, not to to to show that we are only. Matilde Martins: About to be thinking that the other. Matilde Martins: Potentially not the one who will not comply with the commitment, but also to to show that we are serious about our own commitment. [00:44:26] Speaker 1: Matilde Martins: Make it a parallel route to addressing the failures of the multilateral climate system at the moment. Matilde Martins: In particular to reaching the level of climate finance commitments that that is needed that's a very interesting idea, I think we have for the 15 minutes that that remain in. Matilde Martins: The webinar i'd like to us to address two groups of question the first group of question is about what concessions. Matilde Martins: would you expect to be kind of satisfied with a future deal between the UN and that brings us back, maybe to the reports and to the work that you've done. Matilde Martins: Maybe completely if we if we could take away a few ideas on on how this could be stronger in terms of sustainability commitments. Matilde Martins: And then, on the other hand, what's the interaction between signing an FDA and implementing unilateral measures at the EU level i've seen questions from from Ryan, for instance, from SMP questions on on deforestation also on. Matilde Martins: To what level is it legal and is it possible to also make the adaptation and interaction of regimes of unilateral regimes part of an FDA negotiation. Matilde Martins: Is it is is it an opportunity to link, for instance, ETS, as the question of Ryan. Matilde Martins: And to agree on on on on the implementation of those instruments, so I think if we could try to focus on on these two aspects before closing that that would be that would be great just checking if there is any other question no alright. Matilde Martins: So who'd like to go first. Matilde Martins: If you want, they can. [00:46:06] Speaker ?: Matilde Martins: Go. [00:46:07] Speaker 4: Matilde Martins: Perhaps with a more radical view on these. Matilde Martins: But yet the way that we are looking at trade agreements now from a fair trade movement perspective is that the mechanism is not working. Matilde Martins: To the actors that we are working with, which means more of the farmers, small producers agricultural and other workers and SMEs. Matilde Martins: So in terms of general recommendations recommendations around trade agreements, and of course it touches upon Mercosur, we would like to see cooperation vehicles between the two blocks that are based on. Matilde Martins: real and binding assessments of the impacts that these would have at any level and of course also at market access level and also putting forward market access access measures on both ecosystems and local communities. Matilde Martins: As I expressed before around the alternative of bilateral partnerships, we would like to see their financial packages that go in different directions, but one of the directions is the facilitation of compliance with EU market access requirements. Matilde Martins: And this links to your second part of where you want to focus, which is the unilateral measures, because what we see a lot is that you have a trade agreement that goes in one direction that may be. Matilde Martins: Looking at opening markets, but on the other hand, they enter the EU introduces unilateral measures like deforestation, which can be de facto barriers to trade and can. Matilde Martins: And that because of their design may de facto push small actors out of the market, which I guess is not the intention when we speak about smallholder driven supply chains like cocoa or coffee. Matilde Martins: So definitely we would like to see financial packages put in there ideally in the context of trade agreements of other form of agreements that goes in this direction. Matilde Martins: And the last thing that I want to highlight is that for us when it comes to partnerships be that trade agreements or whatever other method there should also be assistant measures to again go in different directions, but one of them. Matilde Martins: To support with the sustainable management of resources and fair allocation of value upon a long value of supply chains. Matilde Martins: As well as raising the capacity of local actors to comply with the use environmental and labor regulation. Matilde Martins: And I think this is key because also links to the EU unilateral measures and the intention of the EU to push imports to comply with the same EU standards, but you need to put in place mechanisms to help going in that direction. Matilde Martins: Thanks. [00:49:07] Speaker 3: Matilde Martins: Go ahead and Marcus, if you want to. Marcus Fritzsche: Yes. [00:49:15] Marcus Gehrig: Marcus Fritzsche: Thank you very much, I just wanted to come in. Marcus Fritzsche: And, of course, the observation that. Marcus Fritzsche: The human rights clauses in trade agreements. Marcus Fritzsche: have only been used, I think, seven times. Marcus Fritzsche: That is not good enough, given the human rights situation. Marcus Fritzsche: But, for example, we've seen even just the discussions on suspending the trade agreements. Marcus Fritzsche: For example, with Israel has taken place in the Council has led to some public debates also inside the European Union. Marcus Fritzsche: So do not underestimate the availability of this, you know, maybe somewhat nuclear option. Marcus Fritzsche: Of course, what would be much preferable and I think I said that would be something like the TCA, where, if the other side violates and deviates from joint commitments, such as the Paris Agreement or the global biodiversity framework. Marcus Fritzsche: There's an immediate reaction suspension of trade benefits in the relationship right that keeps everyone on their toes and is perhaps less politically charged. Marcus Fritzsche: When it comes to the exercising of these clauses. Marcus Fritzsche: Of course, there will always be member states that have a much harder time say suspending certain elements of the trade relationship with partner countries. Marcus Fritzsche: But in in my view that. Marcus Fritzsche: Could be. Marcus Fritzsche: Could be overcome in in the trading relationship and especially if we go with the latest. Marcus Fritzsche: Sustainable development policy trade policy of the you. Marcus Fritzsche: Where at least the Labor clauses and the climate commitments, maybe even biodiversity. Marcus Fritzsche: A part of the normal dispute settlement mechanism right and could lead after the dispute settlement mechanism to the suspension of trade obligations. Marcus Fritzsche: Just the expert process is perhaps not enough when it comes to these really fundamental elements. Marcus Fritzsche: I think from the perspective of our trading partners it's suboptimal to use autonomous measures. Marcus Fritzsche: When we've as an EU tried to put those measures on the table in a bilateral negotiations and couldn't succeed right so one of the criticisms of the autonomous measures is that why didn't you negotiate that in a bilateral trade treaty. Marcus Fritzsche: I think. Marcus Fritzsche: You know, if we had more support for anti deforestation measures in the trade agreement and you know create a mechanism. Marcus Fritzsche: That was bilateral I think some of those measures would be turbocharged and and and really have the environmental impact that we want them to have so those are just a few thoughts on on that particular debate. [00:52:35] Speaker 3: Marcus Fritzsche: But maybe to add on that the tricky part is that we are already importing a lot from makers who countries so even if we had. Marcus Fritzsche: put mirror closes in the deal with sustainability criteria for for the new quota that we were negotiating it wouldn't mean that all the imports. Marcus Fritzsche: From those from those countries would apply to those sustainability requirements, so this is. Marcus Fritzsche: First of all, a big challenge, for instance, for soy where the the tariffs are already. Marcus Fritzsche: To zero, how do we tell how we tackle the environmental impact of those imports in bilateral negotiation when there's no no more negotiation to have. Marcus Fritzsche: On on trade buyers. Marcus Fritzsche: And also, I would like to say that. Marcus Fritzsche: What one thing which is certain is that we need to put much more effort in multilateral discussion. Marcus Fritzsche: For instance, the the fora where we discuss the the sanitary. Marcus Fritzsche: standards is codex alimentarius, which is. Marcus Fritzsche: Integrated to. Marcus Fritzsche: the fow and the WTO. Marcus Fritzsche: Organization and and in this for what we only look at the security and at the sanitary. Marcus Fritzsche: Aspects of the standards. Marcus Fritzsche: So, for instance, on pesticides, there is no consideration of environmental impact. Marcus Fritzsche: So how can we still be negotiating at international level standards without taking into account environmental issues after the discussion that we had on the biodiversity framework. Marcus Fritzsche: This is something that should be changed and we the EU should be putting a lot much more effort on those international discussion and well, but the thing is, we know that it takes a lot of time and sometimes the fact that we. Marcus Fritzsche: Take some unilateral measure and also trigger some of those discussion that are difficult to have at international level. Marcus Fritzsche: Thank you. [00:55:04] Speaker 1: Marcus Fritzsche: Related to the fact that we already are importing so much from. Marcus Fritzsche: I think that was one of the arguments of the people. Marcus Fritzsche: Tending to defend and to be positive about conclusion of this deal. Marcus Fritzsche: It's because they would tend to think that no deal is worse than. Marcus Fritzsche: than the current state of trade between the US and the UN and that the deal going into the limbo of the negotiating fatigue, etc. Marcus Fritzsche: For how many years we don't know, would be worse than actually concluding this one. Marcus Fritzsche: So if you have a reaction on this, I'd be curious as well. Marcus Fritzsche: But the priority goes to the participants and we have another question from Caroline Bertram. Marcus Fritzsche: Who says, as far as I understand the Commission is not willing to offer trade concessions in return for TSD commitments, hence this limits what can be obtained. Marcus Fritzsche: i'm curious to know whether the speaker thinks the EU should let's say back down geographical indicators or the standards to have strong environmental provisions included. Marcus Fritzsche: Priority goes to the to to to this question so i'll maybe turn to. Marcus Fritzsche: If you want. [00:56:17] Speaker 5: Marcus Fritzsche: Well, thank you, Karine, this is a very interesting stance and of course this is now comes down to a negotiating position. Marcus Fritzsche: And I think the short answer we don't have a lot of time left, but I think the short answer at the moment that says very, very little appetite on the EU side to lower the IP protection or the GI protections. Marcus Fritzsche: That's actually it's one of the core and usually requirements of the EU needs trade negotiation. Marcus Fritzsche: So to jeopardize in any way such provisions, even for higher sustainability or environmental standards, seems extremely unlikely in my in my view. Marcus Fritzsche: But perhaps this could in any case as a negotiating stance that if we're not talking IP or GI points that we could perhaps imagine some other. Marcus Fritzsche: considerations, especially those that are key for the exporting partner of our partner whereby the the strategic interest would be more taken into account on something that is less sensitive for us. Marcus Fritzsche: In exchange, of course, for environmental considerations. Marcus Fritzsche: But again, that's part of the of the negotiation. Marcus Fritzsche: I'm afraid the way I experience digital trades approach to this is that it's much more. Marcus Fritzsche: Let's say trade volumes and value first environmental considerations after. Marcus Fritzsche: CSD chapters are considered as an add on or something on top of it. Marcus Fritzsche: And this is extremely hard when you when you face a partner that's not necessarily really interested, like India, for instance, not necessarily interested in environmental considerations. Marcus Fritzsche: And how could you meaningfully integrate this into your negotiating stance if you literally don't do it from the start. Marcus Fritzsche: So I think what you say is extremely interesting, and I think this is what the EU should be doing, perhaps not in my mind, but eventually we need to integrate environmental considerations at the start of the negotiation as a negotiating position, Marcus Fritzsche: rather than an add on that needs to be dealt with additional document letters and so on at the very end of a 20 years old deal. [00:58:07] Speaker 1: Marcus Fritzsche: Any other reaction to that, I think we can quickly do a last tour the tab between the panelists and and and then we'll have to close. [00:58:17] Speaker 3: Marcus Fritzsche: And I think, yes, I think, yes, I think, yes, I think, yes, I think, yes, I think, yes, that's a great idea. Marcus Fritzsche: Well, maybe I heard last week, one of the key negotiator of this EU Mercosur agreement. Marcus Fritzsche: who said on TV in France that the green deal commitment we're going too far, so I think this is also the quite. Marcus Fritzsche: representative of the the the level of commitment from from some trade negotiator on environmental issues and and if they are not taking. Marcus Fritzsche: The the EU commitment on the international level and seriously and not feeling committed to to implement them also in the trade policy, this is a great challenge that we we are all facing. [00:59:11] Marcus Gehrig: Marcus Fritzsche: Imagine. Marcus. Yeah, I completely agree. Marcus Fritzsche: We need to move away from the old standard model of you give I give trade negotiations and move into a model where. Marcus Fritzsche: Sustainable development is at the heart and at the core of our trading relationship. Marcus Fritzsche: It can't be considered a side letter and add on it needs to be at the heart. Marcus Fritzsche: Of our agreement, and it needs to be really streamlined into all chapters, especially the substantive chapters of the trading relationship. Marcus Fritzsche: We can't decarbonize and reach net zero in our own economy if we have trade relationships where we just simply export all our emissions and we export our all our nature destructions to all other parts of the world. Marcus Fritzsche: So we need to have the partners on board, we need to help them to achieve their NDCs and their nature plans and at the same time. Marcus Fritzsche: Make sure that the trading relationship is is fair for for both sides right so. Marcus Fritzsche: I think unless we see a fundamental rethink and all trade agreements in in the end look like the new acts. Marcus Fritzsche: That New Zealand has agreed ie is a sustainable development agreement, rather than just a trade agreement, I don't think we're going to make much progress. Marcus Fritzsche: Thank you very much, Pierre for convening us and I look forward to continuing the discussion. Pierre-Yves Saint- Thank you Marcus. [01:01:04] Speaker 1: Pierre-Yves Saint- Virginia would you like to. [01:01:06] Speaker 4: Pierre-Yves Saint- yeah really brief but really building on what Marcus has just said sort of like next steps, I will really encourage everybody like all of us and everybody that is participating here. Pierre-Yves Saint- To not stop talking about it not stop highlighting what should not go forward what it's wrong more clearly. Pierre-Yves Saint- What could be alternatives to this, even if it may seem like a future exercise because we're not winning. Pierre-Yves Saint- We need to continue to do so and get more and more people to listen to hey this is not the right approach and look at the arguments that may be considered by those that are making the decisions. Pierre-Yves Saint- And thanks everyone for being here today. Pierre-Yves Saint- Thank you Virginia. [01:01:48] Speaker 1: Pierre-Yves Saint- Now it's already time to say goodbye. [01:01:49] Speaker ?: Pierre-Yves Saint- Thank you so much everyone for joining us. [01:01:50] Speaker 1: Pierre-Yves Saint- This is what the green trade network is about discussing how we can do better and we are still hopeful that things can be achieved in the next years. Pierre-Yves Saint- So stay in the loop, register and subscribe to the GTN newsletter and we'll stay in touch for future conversations about FTAs, unilateral measures, the WTO will still be around. Pierre-Yves Saint- Thank you everyone and have a good day. Pierre-Yves Saint- Thank you. Pierre-Yves Saint- Thank you. Pierre-Yves Saint- Thank you. Pierre-Yves Saint- Thank you. [01:02:28] Speaker ?: Pierre-Yves Saint- Thank you. Pierre-Yves Saint- Thank you. Pierre-Yves Saint- Thank you. Pierre-Yves Saint- Thank you. Pierre-Yves Saint- Thank you. Pierre-Yves Saint- Thank you. Pierre-Yves Saint- Thank you. Pierre-Yves Saint- Thank you. Pierre-Yves Saint- Bye bye. [01:02:37] Speaker 1: Pierre-Yves Saint- Thank you. Pierre-Yves Saint- Bye bye. Pierre-Yves Saint- Thank you. Pierre-Yves Saint- Bye bye. [01:02:41] Speaker 3: Pierre-Yves Saint- Thank you. [01:02:42] Speaker ?: Pierre-Yves Saint- Thank you. Pierre-Yves Saint- Bye bye.