Summary of the Joint Statement

The ETUC and the CCSCS reject the Agreement in its current state due to the fact that:

The agreement fails to include strong and binding safeguards that ensure protection of, and respect for, labour rights. The agreement does not contain effectively enforceable commitments to uphold International Labour Standards[1];

The agreement provides no role for trade unions to monitor and ensure respect for commitments to fundamental international labour standards and fails to recognise and enable a specific Labour Forum that would oversee the implementation of the labour dimension of the Agreement; As a consequence, the agreement ignores the democratic role of social partners (employers and unions) as fundamental agents of sustainable development.

The agreement fails to consider the sensitivities and asymmetries between the two parties, in particular the risk of undermining domestic industries in Mercosur countries and undercutting the agricultural sector in the EU;

The Agreement lacks effective mechanisms to promote small and medium enterprises, such as financial support and technology transfer;

The chapter on liberalisation of services in the Agreement does not establish a general exemption for public services; The agreement foresees substantial concessions in the field of maritime transport and fails to provide sufficient protection of the intra-Mercosur maritime trade that is of fundamental importance.

The ETUC and the CCSCS call the parties to renegotiate the Agreement to duly take into account the concerns of workers and trade unions on both sides.

The ETUC and the CCSCS inform the EU and Mercosur institutions that will establish a Labour Forum with the objective to lobby for renegotiating the Agreement and will demand that the institutional negotiating parties recognise the Labour Forum and provide appropriate funding for its functioning.

Main concerns

On 28 June 2019, after 20 years of discussion, an agreement in principle was reached by the Mercosur and the European Union on the trade pillar of the Association Agreement. The next stages involve a legal review and adjustment of the text itself before translation, followed by presentation and – potential – ratification by all parties.

The cooperation and political pillars of the Agreement continued to be negotiated until June 2020, at which time the negotiation was completed, without the input of the social partners or organized civil society, resulting in a continuity of opacity that covers the Agreement in the last five years. Nor has there been any impact study of the economic, social, employment and development consequences of the Agreement as a prerequisite before its adoption.

The trade union movement represented by the ETUC in Europe and the CCSCS in the Mercosur considers that respect for, and full implementation of, fundamental labour and environmental standards and human rights constitute an essential pre-condition for any trade agreement between the two regions. Their non-compliance should be neither envisaged nor tolerated.

Impact assessments that should have analysed the consequences of the Agreement were delayed in the case of the EU. There are no empirical studies on the consequences for Mercosur. Thus, impact assessments were not taken into account during the negotiations. We expressed our concern on numerous occasions as to the possible effects that negotiations could have on, among other aspects, the quantity and quality of employment because of the extensive liberalisation of trade, the deregulation of the services sector and the opening up of public procurement markets.

Likewise, we reiterate our legitimate concern as to the fact that the agreement fails to take into account the points of contention and asymmetries between the two parties, and does not contribute to the sustainable and balanced development of our societies. Despite references in the chapter on Trade and Sustainable Development, we express our disquiet at the striking lack of concrete measures to monitor the implementation of International Labour Standards, in particular the fundamental conventions of the International Labour Organization (ILO) on decent work, Convention 87 on freedom of association and protection of the right to organise, the breach of Convention 98 on the right to collective bargaining, and of all the conventions related to social security. In its current state, the Agreement does not include any mechanism for genuine trade union participation, nor for sanction in case of violation of these Conventions.

We condemn the failure to set up a Joint Advisory Committee, comprising the European Economic and Social Committee (EESC) and the Economic and Social Consultative Forum of Mercosur (FCES), as provided for, and institutionalised, in the Framework Agreement. Among other responsibilities, such a committee could participate in impact assessments and appeal to government and monitoring bodies under the Agreement. We condemn the lack of recognition in the agreement for a “Labour Forum” dedicated to the specific issues of the world of work, with existing instruments within the blocs as fundamental guidelines, such as the Charter of Fundamental Rights of the European Union and the Social and Labour Declaration of Mercosur, despite commitments to establish such a body taken by institutional parties on many occasions, including in specific letters.

We note with growing concern a clear commercial bias in the potential relationship between the two blocs in the event of signature and ratification. Ultimately this would simply be one of the latest generation of free trade agreements, leaving aside the founding principles and mandates that gave rise to the negotiations. This was meant as a framework association agreement which sought to deepen the historical relationship between our peoples, strengthen the partnership between actors of the two regions, generate a model of sustainable, balanced and inclusive development, with greater cohesion and social justice, guarantee respect for the environment, institutionalised social dialogue and the promotion of decent work and consolidate the status of a peace zone across the two regions. We are now faced with the proposal for a highly imbalanced agreement, which will have a negative impact on extensive sectors in the two regions.

This agreement does not adopt a favourable approach to issues of huge interest for the population in general and workers in particular: extensive coverage and accelerated pace of lower tariffs  in the trade in goods; high degree of flexibility in rules of origin that has been negotiated, lack of protection for the industrial sector in Mercosur, which might jeopardise its very survival; erosion of State purchasing power, as set out in the chapter on governmental procurement; worsening regional supply chains so painstakingly built up across the Mercosur over so many years, the lack of effective mechanisms to promote small and medium enterprises, such as financial support and technology transfer; the lack of sufficient protection of the intra-Mercosur maritime trade where the interconnection of the rivers, often go beyond national transport, are of fundamental importance and the total absence of studies into the economic, social, occupational and environmental impacts of the agreement in Mercosur countries , already experiencing a very difficult economic and social situation.

Meanwhile, the trade union movement in the two regions has been made aware of a possible division of the agreement, with the aim of applying the trade pillar as a priority. We must emphasise that we are firmly opposed to this option, which would establish on the one hand a Free Trade Agreement and on the other a Cooperation and Political Agreement, with different mechanisms and timings for their approval and entry into force. The aim of this potential division is to ensure the approval of the trade pillar, allowing the FTA to be applied immediately, while relegating the Political and Cooperation Agreement to the background. Thus, the cooperation pillar has not been addressed. Were this division to take place, the cooperation pillar would be removed from the trade pillar, although this is of the most relevant multilateral topics, at a historic time when nations have committed to a Development Agenda through the Sustainable Development Goals (SDGs). Provision would therefore not be made for the required relationship between trade, development and cooperation, as a prerequisite to strengthen SDGs and multilateralism that the parties claim to support and encourage.

Over recent months, civil society in the two regions has been very vocal in its criticism of the Agreement’s effects on the environment. The devastation of natural resources linked to the expansion of agricultural land, aggravated by the use of hybrid or genetically modified products and herbicides and pesticides produced by multinational corporations, many of them based in Europe and banned in their home countries, but sold to those of Mercosur. So many issues that will, once again, lead Mercosur economies to depend on commodities, while concentrating profits in the hands of exporting companies. This will have a negative impact on the very existence of sustainable production models, imposing dangerous living and working conditions on thousands of rural workers, destroying biodiversity and threating the existence of the Amazon forest. The agreement as it stands leads inevitably to a production model that facilitates the deindustrialisation of Mercosur and the concentration of wealth, with an impact on employment, value-added production, quality of life and opportunities for sustainable development. We denounce the fact that there are no concrete follow-up measures in the Agreement on the implementation of international environmental standards and the Paris Agreement.

The Agreement within the context of the COVID-19 pandemic

The economic crisis which began in 2008 took a heavy toll on workers in terms of job losses and growing inequalities. The health crisis caused by the COVID-19 pandemic has further worsened an already critical situation. It will have as yet unpredictable consequences for the global economy, causing more unemployment, poverty and more precarious work. As trade unions, we fight to push back all attacks against the rule of law and democracy in these exceptional global circumstances.

Unions are dismayed by the advance of a systemic attack on democracies and the rule of law in both continents, but especially in South America. We are concerned about new actions that, through sectors of the justice system, some parliaments, and concentrated sectors of the media, exercise permanent destabilizing interference in several countries. History has always found trade unions defending democracy and international solidarity.

The current situation points more clearly than ever the most affected sectors of society, those which even before the pandemic, found it hard to survive, and which today could not continue to do so without proactive and protective State action. Uncertainty reigns supreme, and we do not yet know how we will emerge from this situation, nor how many aspects of our future world will be organised. The question is therefore whether this is the right context to move forward with the signature of a rigid, imbalanced agreement, forged in a world that no longer exists, and based on paradigms that have proved false. We should instead today be thinking of a different social, cultural, political, economic and environmental model, one which allows us to build a relationship based on greater equality, inclusion and social justice and environmental sustainability.

The ETUC and the CCSCS reject the Agreement in its current state, because it fails to address any of the concerns we expressed over many years.

We support the position of the European Parliament which has emphasised that the EU-Mercosur agreement cannot be ratified as it stands[2]. We therefore demand that negotiations be reopened to respect the founding mandates and principles of said negotiations, namely: the extension of political, economic, social and cultural relations based on the principles of peace, sustainable development, fair and balanced trade, decent work and social justice, as well as institutionalized social dialogue.

 The CCSCS and the ETUC demand that negotiations focus on people and their fundamental rights, decent work and solidarity with the most vulnerable, respect for the environment and the defence of democracy. We want relationships that help to build models of sustainable development, with better economic balance, greater cohesion and social justice, in accordance with the objectives and commitments of the United Nations 2030 Agenda.

The ETUC and the CCSCS will continue to defend their position regarding a harmonious and equitable relationship between the European Union and Mercosur.

February 2021

[1] Trade unions face increasing repression and violence in Brazil. ITUC rates Brazil as one of the worst countries in the world for workers due to the murder of trade union leaders, widespread union busting and the brutal repression of strikes. In 2019 Brazil appeared before the ILO committee for the application of standards for the government’s violation of ILO convention 98 on freedom of association: https://www.ituc-csi.org/ituc-global-rights-index-2020

[2] https://www.europarl.europa.eu/doceo/document/TA-9-2020-0252_EN.html