3 Questions on the EU's trade deals with Mercosur and Mexico to MEP Anna Cavazzini

1. In a global trade order marked by uncertainty and protectionism, isn’t it good news that the EU is still able to move ahead with major trade agreements, such as with Mercosur and Mexico?

Yes, in general, we welcome a deeper partnership with democratic countries such as Mexico, Brazil, Argentina, Uruguay, and Paraguay. Trump’s trade policy shows that we have to diversify and cannot be reliant on bullies. This is why the Greens tried to make the Mercosur agreement more sustainable. However, we have to judge the agreements based on their contents and not only the geopolitical necessity. And unfortunately, the Mercosur agreement, as it stands, is deeply flawed. The EU must not repeat past mistakes by prioritising short-term economic gains over sustainability. 

The agreement’s current form risks accelerating deforestation, increasing CO₂ emissions, and undermining the EU’s own climate and environmental goals. This is especially upsetting since the Amazon has already been deforested by 17% and will collapse completely when deforestation has reached 20-25%. Economic growth must align with planetary boundaries; otherwise, we are simply trading away our future for profit. And economic growth must be divided fairly. However, the EU-Mercosur agreement risks to trap the Mercosur countries in the role of a raw material supplier and to prevent them from moving up the supply chain as 84% of EU exports to Mercosur are processed goods, while 75% of Mercosur exports are raw materials (agricultural products, minerals). Therefore, trade unions in the Mercosur countries warn against job-loss and deindustrialisation.

2. The proposed Mercosur deal includes references to the Paris Agreement, but you argue that more is needed. Where is this agreement falling short?

The inclusion of the Paris Agreement as an "essential element" is a step forward, but it remains very difficult to operationalise in practice. The agreement’s sustainability chapter is weak: it lacks enforceable commitments to halt deforestation, protect indigenous rights, or ensure compliance with EU environmental standards. For example, the deal does not prevent the export of commodities like soy, beef, and bioethanol –major drivers of deforestation– from being linked to illegal land clearing or human rights abuses. The EU’s new deforestation regulation is a positive tool, but it is undermined by loopholes, such as allowing Mercosur countries to use their own definitions of deforestation, which are often less stringent. 

Additionally, the agreement fails to address the export of banned pesticides to the Mercosur countries, which not only harms local ecosystems and communities but also returns to EU consumers in the form of contaminated food. Without robust, legally binding safeguards and a mechanism to suspend trade benefits if sustainability targets are violated, the agreement risks becoming a green-washed license for environmental destruction. A sustainable agreement would incentivise trade in sustainable products and discourage harmful products - not the other way round.  

3. Beyond environmental issues, what opportunities and challenges do you see for European farmers and SMEs in particular?

For European farmers, the Mercosur deal is a double-edged sword. On one hand, it offers access to new markets and cheaper raw materials, such as soy for animal feed. On the other, it exposes them to unfair competition from Mercosur's lower-cost, lower-standard agricultural products –particularly beef, poultry, and sugar– which could flood the EU market and depress prices. This is especially problematic for small and medium-sized farms, which lack the resources to compete with large agribusinesses on either side of the Atlantic. The agreement’s weak safeguards for food safety and animal welfare further disadvantage EU producers, who operate under stricter regulations.

The overall economic benefit is calculated to be about 0.1% in GDP growth for the EU. For SMEs specifically, the deal’s benefits are limited. While it may open procurement opportunities in Mercosur, the agreement will mainly benefit large corporations—especially in the automotive and chemical sectors. The lack of strong labour and environmental protections also risks undercutting EU businesses that prioritise sustainability. Without meaningful support for SMEs and a level playing field for farmers, the agreement could deepen inequalities within the EU’s own economy, benefiting only a handful of multinational corporations while leaving smaller players behind. The EU must ensure that trade policy serves all its citizens, not just the few.