Last year former Argentine President Mauricio Macri celebrated the EU-Mercosur Free Trade Agreement (FTA), a treaty between two asymmetric trading blocks that is currently under legal review. It  would expand benefits for transnational corporations and reinforce existing asymmetries.  A reduction in Brazilian markets for Argentine products is another likely consequence.

Luciana Ghiotto and Javier Echaide presented their ground-breaking study and discussed it with Ambassador María del Carmen Squeff from the Argentine Foreigen Office and German Green MEP Anna Cavazzini.

Verónica Ocvirk, Buenos Aires

«President, we have an agreement!” This WhatsApp audio message went viral in Argentina with the excited voice of former Argentine Foreign Minister, Jorge Faurie. Just one year ago Ambassador Faurie sent this message to Mauricio Macri who was then president in Argentina. Trade negotiations had just ended, the conclusion of 20 years of Free Trade negotiations between the European Union (EU) and Mercosur.

Thus ended two decades of a stalled tug-of-war between government officials and businesspeople on both sides of the Atlantic. In 2016, after the parliamentary coup against Dilma Rousseff in Brazil, these stalled talks gained a renewed momentum and on 28th June 2019 marathon deliberations on this trade treaty ended, though they are still not signed. The Argentine government announced a «key pillar of the national productive transformation».

The final text of this agreement has now moved to the technical review stage, but it is by no means certain that this will be finalized. To begin with, it must be presented to each of the four national congresses of the Mercosur member States. In Europe the draft treaty must navigate a complex institutional framework to be ratified that will include some supranational bodies, such as the European Parliament and the EU Council, as well as other national authorities.

Last year the Austrian parliament declared their disagreement to the accord, while the Dutch parliament has just rejected it. The Dutch decision, although not binding, is starting to expose an adverse political scenario.

Questions

What would this agreement really entail? Who wins, who loses, and what impacts could the treaty have, on the environment, on the nature of the national economies within these trading blocks, on employment, and on the daily lives of the nearly 800 million people who live there?

Throughout the negotiations there was precious little public information and few rigorous impact studies that could quantify these effects. The technical review phase is also being held behind closed doors.

In order to look into these issues, the members of the Green Group of the European Parliament generated a call for academics, someone who could undertake a holistic, serious, acute and detailed impact study on the possible consequences of the treaty for those countries that sign on.

They chose two Argentine academics, a political scientist, Dr. Luciana Ghiotto, member of Attac Argentina and researcher in the Argentine National Scientific and Technical Research Council (CONICET) based out of the University of San Martín. Dr. Ghiotto was recently, and rather unexpectedly, in the Argentine news when her name appeared among the academics spied on by the Argentine Federal Intelligence Agency during former Mauricio Macri’s government. Javier Echaide, lawyer, and CONICET researcher based in the University of Buenos Aires, also from ATTAC Argentina, is the co-author.

Both authors studied every section of the more than 400 pages of the drafts of the agreement. They published their results in a book: «The Agreement between Mercosur and the European Union. An integral study of its clauses and effects». A Spanish version of the report has just been published by the Latin American Council for the Social Sciences (CLACSO) in collaboration with the Rosa Luxemburg Stiftung.

Amplified impacts

“Trade agreements negotiated today shape economic exchanges in the long run. Industries and governments adapt to their rules, trade flows change, and development models are constrained or enabled by their content. Their effects are felt throughout economies”, warn Green MEPs Anna Cavazzini and Yannick Jadot in the foreword to the English edition.

We didn’t just look at the impacts on trade, on how many jobs are lost in a certain sector, on the effect on employment.  Of course that is important, but we added a chapter on services, another on public procurement and another on intellectual property», explained Dr. Ghiotto during the book’s presentation. Co-author Dr. Echaide, MEP Cavazzini and María del Carmen Squeff, Undersecretary for Mercosur and International Economic Negotiations at the Argentine Foreign Ministry, were all present online at the book launch.

“We are talking about access to health, access to medicines, access to water, access to education. We’re talking about amplified impacts. Today, how can we sign a FTA if we don’t know the impacts on women? Holistics! A real look at the integral impacts of an agreement that isn’t just about the economy, not just about the farming sectors, rather we need to analyse the impacts on society as a whole,” added Dr. Ghiotto.

Asymmetry

The agreement allows access for Mercosur firms for certain products to the EU market free of import duties. Other products are subject to quotas for preferential access. Meanwhile for the EU, this agreement means commercial access to the most developed region of South America.

The end of these extremely drawn out negotiations, remarked the book’s authors, is indicative of the EU’s efforts to establish itself as the international defender of Free Trade. In contrast to the United States, which in its trade war with China, seems to wish to withdraw and defend it’s national economy, the EU has become a «compulsive negotiator» of trade agreements that offer both tariff reductions and which also facilitate the circulation of capital.

One of the crucial aspects of this agreement is that it binds two trade blocks that are vastly asymmetrical in trade terms. “This is an historical fact: Mercosur sells primary products and raw materials, while the EU exports high and medium value-add manufactured products. This agreement will amplify these asymmetries, providing incentives to extend this industrial agriculture model based on glyphosate and fertilizers made from fossil fuels. South American industry on the other hand will not be favoured, quite the contrary», said Dr. Ghiotto.

She also noted that the accord would facilitate the penetration of European manufactured products into sensitive local markets such as cars, autoparts, machinery, chemicals, textiles, footwear and medicines.

Argentine industry — today with 35% import tariffs on automobiles and between 14% to 18% on machinery – has a fixed schedule of a maximum of 15 years from the date of signing, to gain equivalent levels of competitiveness as those of European firms, which generally benefit from lower financial and energy costs. This is one of the largest benefits of the agreement for European firms, for whom this treaty would represent four billion euros in reduced tariffs for their exports.

Mercosur economies face a different panorama for their industrial sectors, the insertion of EU-sourced elements into their local supply chains will cause disruption. While Mercosur specialises in exporting agricultural products outside the region, within the block Brazil and Argentina interchange mainly manufactured goods, many of them car parts.

The EU-Mercosur agreement could reduce Brazil’s purchase of Argentine products, this could happen in the metallurgical sectors, in autoparts, as well as processed foods products like olive oil and cheese. This would leave Argentine manufactures deprived of its main market. «The increase in the presence of European products on the Brazilian market will be at the expense of the Argentine and, partly, on Uruguayan industry”, the book highlights, although even so, opposition to the agreement has not yet formed, the authors add.

The environment

The agreement is not something reflecting European popular opinion, as can observed by the fact that most of the critical voices, raised until now, have been European ones. The agreement faces it’s most fierce opponents in EU agriculture, though there have already been a series of environmental tensions building beforehand, these exploded in August 2019 when the Amazon fires burned on the covers of global media, many of these fires presumably intended to expand agricultural frontiers to produce more exportable agricultural commodities.

The debate – very educational! English subtitles by Tony Phillips.

Environmental controls in agriculture are much less stringent in Mercosur than in the EU, which is why — the book emphasizes — that it’s «not only trade asymmetries that exist between the blocks; but also regulatory asymmetries». The book goes on to give a lurid example, the so-called, «Operação Carne Fraca», relevant because Brazil is the largest exporter of beef in the world.

This scandal was triggered when the Brazilian Federal police exposed that the country’s main meat producers — including market giants like JBS and BRF — had been adulterating rotten beef and poultry for export, changing the expiration dates, and hiding the bad smells with chemicals: «This issue is extremely sensitive for European consumers», noted the authors.

Similar precautions apply to Ractopamine use in pigs – a hormone given to animals to increase muscle mass, which is allowed in Brazil – and genetically modified organisms (GMOs), approval for which varies across the EU. “These issues have a huge impact on what consumers find on the supermarket shelves”, the book adds.

The report is full of examples demonstrating the irrationalities of international trade, such as food products that are produced within a few kilometres of where they are consumed «will now travel 10,000 kilometres in vessels from, for example, Rome to Montevideo».

Public procurement

The treaty also effects changes in public procurement, since the agreement allows States to award contracts to European companies under the same conditions as local ones. Opening public procurement in Mercosur States which, as described by Dr. Echaide occurs at multiple levels, at the State level in centralised purchasing, such as by national ministries, agencies and national universities, but also at sub-national levels such as provinces/states and municipalities.

“Those negatively affected will include cafés operating in public universities which are often concessions run by small and medium-sized enterprises (SMEs) or cooperatives, these concessions will have to compete with European transnational companies, such as Segafredo, a well-known Italian company that is already operating in airports and shopping malls worldwide”, said the lawyer.

«I see a very large imbalance.  I think the current government, of which I am part, does not view this agreement in such a positive light», said Ambassador Squeff during the presentation, while recounting the necessary steps that this accord needs to pass through to be ratified such as local parliaments in Mercosur countries, “Where we hope to show all of our positions on the agreement. » she added. The ambassador also mentioned that the Argentine Foreign Ministry has already begun a round of consultations with the private sector.

Gerhard Dilger, director of the Rosa Luxemburg Stiftung’s Southern Cone office, greeted the debaters and celebrated the launch, which was popularised via the hashtag #TratadoVampiro (Vampire Treaty in Spanish). “Why ‘Vampire Treaty’?” he said, “because multinational corporations want to suck the blood of the Global South”, but also because, as the US author and Attac pioneer Susan George said: “These treaties are drawn up at night, in absolute secrecy».

Acoording to him, there is a solution at hand: “When they are exposed to the light of day, when we, as civil society, promote transparency and we make known, as we did with this very good study, realities and implications, then these treaties can easily die.”

The first version of this article was published on 28 June 2020 in the Buenos Aires daily newspaper Página 12; Translation: Tony Phillips

One year ago, Bolsonaro, Macri, Macron and Merkel announced the “biggest economic area in the world”. It is unlikely that anything will come of it.

Gerhard Dilger

Germany, the world export champion, has always been the most ardent advocate of the so-called free trade agreements. During its EU Council Presidency, which begins today, the Merkel government stated they would throw their weight behind two transatlantic trade agreements: TTIP light, as well as the “Association Agreement” with the South American trade bloc Mercosur (Southern Common Market), which was bombastically announced one year ago.

The advent of coronavirus, however, has led to a shift in priorities: in light of the obvious systemic crisis, the top priority for both Angela Merkel and Emmanuel Macron is now saving the neoliberal EU. Nevertheless, it is likely that they will want to push on with their trade agenda quietly and unhindered.

Since 2006, the EU Commission—under the slogan of a “Global Europe”—has been attempting to make “its” companies more competitive and codify the role of the Global South as a supplier of raw materials and purchaser of EU agricultural surpluses. A key component of this strategy is the “free trade” agreements. However, like ATTAC pioneer Susan George, we prefer to refer to these agreements as vampire treaties: it’s bad for them if they come to light, as they rarely stand up to democratic debate.

The EU-Mercosur agreement is a textbook example of this. The project was launched in Rio de Janeiro in 1999, when neoliberalism in South America had already passed its zenith. But then the pink tide arrived, with Luiz Inácio Lula da Silva in Brazil, Néstor Kirchner in Argentina, and Hugo Chávez in Venezuela. In 2005, in the Argentinian city of Mar del Plata, cheered on by social movements, the three left-wing politicians succeeded in putting an end to another neo-imperial project in the presence of George W. Bush: the Free Trade Area of the Americas (FTAA), which would have been a playground for transnational corporations from Alaska to Tierra del Fuego.

The newfound self-confidence of the progressive governments in Brazil, Argentina, Uruguay, and Paraguay made an inequitable deal with the European Union unthinkable, and the negotiations dragged on for a long time. But on the other hand, the EU was never prepared—for good reason—to unconditionally open its doors to beef and genetically modified soy from the Mercosur region. The “strategic partnership” between Germany and Brazil, which was announced in 2008, changed little in all of this.

The tide turned in 2016 with the cold coup d’état against Lula’s successor Dilma Rousseff, the shocking conviction and imprisonment of Lula, and the subsequent victory of Jair Bolsonaro. With the inauguration of the right-wing extremist at the beginning of 2019—neoliberal businessman Mauricio Macri was in power in Argentina—negotiations were suddenly kicked into gear. After six months, a draft had been drawn up, of which to this day only a general outline has been made public, let alone signed or even ratified. Bolsonaro, Macri, Macron, and Merkel nonetheless celebrated the political agreement at the G20 summit in Osaka on 28 June 2019, which also served as a symbol of resistance against the kind of right-wing protectionism championed by Trump.

Even then it was clear that the deal would further promote the recolonization of South America. However, this would be neither in the interest of the communities living on both sides of the Atlantic nor in the interest of nature, as studies conducted by the Greens in the European Parliament, Misereor, and Greenpeace demonstrate. If the agreement were actually signed and implemented, it would be a triumph for the multinationals and their profit logic. This Monday, it was announced that the tricky phase of «legal scrubbing» was finished.

The open veins of Latin America

Since 1492, Latin America has predominantly played the role of supplying mineral and agricultural resources to other parts of the world. Following attempts to emancipate the region from this role in the early 2000s, Argentina, Brazil, Paraguay, and Uruguay now look to be permanently locked into it. In the best case, agribusiness and the import sector in these countries would profit from a gradual lowering of customs barriers. Workers, small farmers, and indigenous people would pay for the sanctioning of slaveholder capitalism with the further erosion of their rights and livelihoods.

Our debate with English subtitles from Tony Phillips: What´s in it for Argentina?

The planned liberalization of trade would increase both job cuts and downward pressure on wages, and, according to the EU Commission, European companies would stand to save 4 billion euros per year in taxes. New business opportunities in the telecommunications and IT sectors are also expected. In addition to an ecologically preposterous expansion of international trade, EU negotiators are insisting on stricter patent protection, which would erode the supply of affordable generic medicines to South Americans. Negotiators are also calling for EU companies to be granted an equal say in government purchases in Mercosur, which are often used to strengthen local European companies. However, there are still no plans to implement sanctions for shared responsibility for environmental crimes or human rights violations.

When it comes to the neoliberal governments of Brazil, Paraguay, and Uruguay, the EU’s job is easy, even if they are being courted by the German-Brazilian Chamber of Commerce and Industry: it is disgraceful that Bolsonaro—who is responsible for the destruction of tracts of rainforest and displays contempt for his fellow humans—and his military are touted as partners of a democratic Europe. The situation looks different when one travels further south. Argentina’s prudent president Alberto Fernández, a social democrat, has been in power since December 2019. Like his friend Lula, he is calling for relations to be conducted on an equal footing and has consequently been maligned by the neoliberal press as Mercosur’s gravedigger.

We have already witnessed dramatic levels of destruction not only of the Amazon region, but also of the biodiverse ecosystems of Cerrado and Gran Chaco, which are being forced to give way to monocultures that are hostile to life. And yet Bayer-Monsanto plans to sell even more genetically modified grain and agricultural chemicals, and Tönnies & Co. plans to continue importing genetically modified soy. In the long run, BMW, Daimler, and VW, whose Brazilian management worked together with the military dictatorship’s torturers almost 40 years ago, would use car parts manufactured in China, rather than in Argentina.

The EU-Mercosur agreement is a neocolonial, inhumane project that is harmful to the environment; indeed it is an anachronism—and that is why it will fail.

Translated by Louise Pain for Gegensatz Translation Collective

Let’s stop the denigration of refugees, people looking for a place of safety in a cruel and dangerous world. They are all human beings just like all of us here today, looking for a place of safety and looking to make their contribution to the future of all of us, so let’s support them in their hour of need, not see them as a threat and a danger

By Jeremy Corbyn

There’s a message on that wall for President Donald Trump. And do you know what it says? Build bridges, not walls. Politics is actually about everyday life. It’s about all of us, what we dream, what we want, and what we want for everybody else.

The commentariat got it wrong. The elites got it wrong. Politics is about the lives of all of us, and the wonderful campaign that I was involved with, that I was so proud to lead, brought people back into politics because they believed there was something on offer for them.

But what was even more inspiring was the number of young people who got involved for the first time. Because they were fed up with being denigrated, fed up with being told they don’t matter. Fed up with being told they never participate, and utterly fed up with being told that their generation was going to pay more to get less in education, in health, in housing, in pensions and everything else. That they should accept low wages and insecurity, and they should see it as just part of life. Well, it didn’t quite work out like that, did it?

Bhaskar Sunkara: Why Corbyn won

And do you know what? That politics that got out of the box, is not going back in any box, because we’re there demanding and achieving something very different in our society and in our lives. There’s a number of things they’re very simple very basic questions we should ask ourselves: Is it right that so many people in our country have no home to live in and only the street to sleep on? Is it right that so many people are frightened of where they live at the moment, having seen the horrors of what happened at Grenfell Tower? Is it right that so many people live in such poverty, in a society surrounded by such riches? No it obviously is not. And is it right that European nationals living in this country, making their contribution to our society, working in our hospitals, schools and universities, don’t know if they are going to be allowed to remain here?

I say, they all must stay, and they all must be part of our world, and be part of our community. Because what festivals, what this festival is about, are about coming together. This festival was envisaged as being for music yes, but also for the environment, and for peace. You heard the message from E. P. Thompson earlier on, and what a wonderful man he was. Do you know what? When people across the world think the same, cooperate the same, maybe in different languages, in different faiths, in different cultures, peace is possible, and must be achieved.

And do you know what? Let’s stop the denigration of refugees, people looking for a place of safety in a cruel and dangerous world. They are all human beings just like all of us here today, looking for a place of safety and looking to make their contribution to the future of all of us, so let’s support them in their hour of need, not see them as a threat and a danger.

But let’s also look at instability and problems around the world and tackle the causes of war: the greed for natural resources, the denial of human rights, the imprisonment of political opponents. Let’s look to build a world of human rights, peace, justice, and democracy all over the planet.
This place in Glastonbury is truly wonderful. I remember coming to this area as a child being taken up to Glastonbury tour by my mum and dad and thinking what a wonderful place it is, because there’s something very special about it. It’s a place where people come together and they achieve things. We have a democracy because people laid down their lives that we might have the right to vote, because women laid down their lives that women would get the right to vote at the time of the First World War.

That determination of the collective, won us, won us all, the principle of health care as a human right for all of us. Nothing was given from above, nothing was given from above by the elites and the powerful, it was only ever gained from below by the masses of people demanding something better, demanding their share of the wealth and the cake that’s created. So it is about bringing those ideas together, it is about the unity that we achieve and we achieve inspiration though lots of things.

In every child there’s a poem, in every child there’s a painting, in every child there’s music, and do you know what? As people get older we get embarrassed about that, thinking wooooh, can’t be thinking that sort of thing, can’t be writing poetry. No. I want all our children to be inspired, all our children to have the right to play music, to write poetry, to learn in the way that they want.

In this festival, this wonderful festival, with all its stages and all its music, gives that choice and that opportunity to so many young musicians that they can achieve and inspire us all and I’m proud to be here for that, I’m proud to be here to support the peace movement and its activities here and the way that message gets across, but I’m also very proud to be here for the environmental causes that go with it. We cannot go on destroying this planet through global warming, through pollution, through destruction of habitat, through pollution of our seas and our rivers.

j_corbyn
We have to live on this planet, there is only one planet, not even Donald Trump believes there’s another planet somewhere else. And so let us protect the planet we have got, use the technology we have to manage and control the use of our natural resources that the planet has her for future generations in better state than it is at the present time. But it’s also about our creativity, creativity that brought us the things we have talked about, but that creativity together can be a tool for getting a message across, a message that racism is wrong, divisive and evil within our society.

Racism in any form divides, weakens and denies us the skills and brilliance of people who are being discriminated against in just the same way that sexism was, be it in lower pay for women, less opportunities for women, or less aspirations.

We need to challenge sexism in any form in our society, to challenge homophobia, to challenge all the discrimination that goes on and to ensure that the society that we want to build is one that’s inclusive for all. I want to see a world where there’s real opportunity for everybody within our society, that means sharing the wealth out in every part of our country and looking to global policies that share the wealth, not glorify in the injustice of inequality where the rich seem to get inextricably richer and the vast majority continually lose out, and those that are desperately poor live on the margins of society euphemistically known as the fourth world.

Surely we can as intelligent human beings do things differently and do things better. And when we are here in Glastonbury we are doing things differently, we are doing things better, and we are seeing that inspiration. And there are many people that we learn from in our lives, we learn from our parents, we learn from our teachers, we learn from those that have written music for us or written poetry for us.

It’s that sense of unlocking the potential in all of us that I find so inspiring, and I’m inspired by many poets and many people, and I think we should adopt a maxim in life, that everyone we meet is unique, everyone we meet knows something we don’t know, is slightly different to us in some ways. Don’t see them as a threat, don’t see them as an enemy, see them as a source of knowledge, a source of friendship, and a source of inspiration.
shelleyAnd if I may, I would like to quote one of my favourite poets, Percy Bysshe Shelley, who wrote in the early 19th century, many, many poems and travelled extensively around Europe. And the line I like the best is this one:

Rise like lions after slumber/ In unvanquishable number/ Shake your chains to earth like dew/ Which in sleep had fallen on you/ You are many, they are few!

I quote Shelley because he inspired like so many others do. I’m proud to be at Glastonbury because it inspires so many music festivals all over the country. Let us be together and recognise another world is possible if we come together to understand that, understand the power we have got, and achieve a decent, better society where everyone matters, and those poverty-stricken people are enriched in their lives and the rest of us are secured by their enrichment.

Photo: Garry Knight (flickr, copyleft)