International Trade and the Mitigation of Environmental Damage: The Experience of the EU-Mercosur Free Trade Agreement

The interdependence between trade and environment was concretized in Trade and Sustainable Development (TSD) chapters of European Free Trade Agreements (FTAs). This Chapter analyzes the consequences of these rules. The focus falls on the sustainability provisions of the EU-Mercosur FTA that was chosen due to current objections to the implementation of the agreement for environmental reasons and to its sustainability provisions’ potential effects to alleviate the Brazilian environmental crisis. This crisis constitutes the identified research problem and is characterized by deforestation of the Amazon forest and fires in Cerrado and Pantanal. The main question addressed in this Chapter concerns whether the European concerns around the approval of the EU-Mercosur FTA and its possible implementation can contribute to mitigate the current environmental damages. The Chapter firstly identifies elements of the Brazilian environmental crisis and warnings in the sustainability impact assessment (SIA) of the agreement, a support material to EU decision-making, about the environmental risks regarding its ratification. Recently, the hindrance on its approval procedure in the European Parliament, derived from the destruction of natural resources in Brazilian biomes, demonstrates that the European foreign policy is guided by ethical objectives. The Chapter then analyzes key general elements of the TSD chapter of the agreement that, when into force, limit the right to regulate, and protect environmental and social standards and can allow their effective implementation. Beyond their explanation, the analysis focuses on the issue of climate change that can be further mitigated with the compliance of obligations foreseen in the TSD chapter.