The trade deal has been 20 years in the making (Credit: VCG)
The trade deal has been 20 years in the making (Credit: VCG)
Austria has thrown into doubt the proposed free-trade pact between the European Union and the Mercosur group of four South American countries.
Members of the Austrian parliament from four of the five parties represented voted against the draft free-trade agreement, with the government now having to oppose it when EU members vote on it.
All EU member states and their parliaments have to vote in favor for trade deals to go ahead. There is growing doubt now that this one can go forward in its current form.
What is the EU-Mercosur deal?
Brazil's President Bolsonaro at Mercour gathering (Credit: AP)
Brazil's President Bolsonaro at Mercour gathering (Credit: AP)
Brazil, Argentina, Uruguay and Paraguay are the four countries in the Mercosur trade bloc, which in the summer agreed one of the world's biggest trade deals with the 28-member European Union, after 20 years of negotiations.
The free-trade agreement, if ratified when the detailed wording is finalized over the next two years, would provide a combined market of around 780 million people, with around two-thirds of that total on the EU side of the deal.
The trade pact would be the largest ever concluded by the EU and it has been estimated that it would save European companies more than $4.5 billion (4 billion euros) worth of trade duties every year.
If implemented, the EU says it will eliminate 99 percent of agricultural and industrial tariffs on both sides and facilitate exchanges in services and government procurement, reduce technical barriers and protect intellectual property.
Why has there been opposition to the deal?
The Amazon fires prompted some opposition to the deal (Credit: VCG)
The Amazon fires prompted some opposition to the deal (Credit: VCG)
Brazil is under pressure from European countries over its environmental policies following the large number of forest fires in the Amazon basin. Its government has been accused of not doing enough to tackle them.
A variety of reasons – covering consumer rights, human rights and animal welfare – were given by those opposing the pact in Austria.
Many business groups back the deal, which they say will boost trade and jobs, but it has faced opposition from some farmers worried about agricultural imports from South America.
The Austrian Conservative MP and former environment minister Elisabeth Köstinger said: "In South America, tropical forests are destroyed by fire to create pasture and send cheap beef to Europe."
The trade deal includes a specific commitment by the signatories to implement the Paris Agreement on climate change. France warned in August that it would not back the deal unless Brazil's president Jair Bolsonaro showed his commitment by tackling the fires.
Bolsonaro said Brazil is tackling the fires, but also warned against foreign interference, saying it is an issue of sovereignty. About 60 percent of the rainforest, which is seen as a key element in the battle against climate change, is within Brazil's borders.