Sustainability should be key in trade negotiations

cop21At the end of this year, nearly 200 nations hope to negotiate a 15-year agreement that will foster change towards a sustainable low-carbon economy and establish obligations for all nations. Previously reluctant nations have already offered ambitious reduction targets and the European Union continues to be the most daring actor. Business will play a key role in the implementation. This will be an opportunity for strategic actors to voice their views on possible impacts over free trade agreements, among which the Mercosur-EU FTA. Old attitudes, barriers and reservations will have to be revisited in order to look for win-win scenarios.

The FNF partner in Brazil, Instituto Ethos, has been observing the EU-Brazil trade negotiations since 1994, but these haven’t been advancing very fast, one of the reasons being a general attitude in Brazil against market liberalization, but also the difficult market access conditions on EU side. Moreover, Brazil – as a member of Mercosur, which has relaunched free trade agreement negotiations with the EU in 2010 – is not expected to negotiate with the EU bilaterally. Only, Mercosur itself is divided over the necessity of the FTA, two of its members, Argentina and Venezuela remaining hesitant.

Instituto Ethos has been focusing on promoting sustainability through trade in recent years and joined forces with FNF in the framework of a five-year project on adaptation to climate change and energy transition funded by the German Ministry for Economic Cooperation and Development. In June 2015, they came to Brussels and Geneva for the second time to discuss the progress of their work with EU and WTO officials. Part of the Brussels workshop was a public event on “Perspectives for the MERCOSUR-EU FTA after a new climate agreement”. Several actors in the field of trade and sustainability were asked to present their views.

cealIngo Ploger, International President of the Business Council of Latin America (CEAL) which promotes a “Latin America without frontiers” and also advocates for more sustainability in business, expressed the hope that the new climate agreement would lead to a better Clean Development Mechanism, so that the Certified Emission Reductions could then be handled at a stock exchange efficiently. He pointed out, though, that politics preferred to keep it simple and emphasized that pressure from civil society will be necessary.

Fabio Caldas, Director of Foreign Affairs at Shell Latin America, is convinced that “it is impossible to ignore Brazil in the energy arena”. The 9 billion people envisaged to inhabit the planet by 2050 “will need all types of energy”. The global energy transition towards 100% renewables will realistically not be a shift that takes place from one day to the other, but will require steps in between. Brazilian second generation biofuels could play an important role.

unicMaria Almeida, Senior Policy Advisor at UNICA, the Sugarcane Agroindustry Union of Sao Paulo, representing 60% of the Brazilian sugar cane industry, regretted that not only were bioethanol imports from Brazil to the EU made prohibitively expensive by tariff barriers, but the non-tariff barriers also proved to be nearly unsurmountable, the main problem being the European sustainability standards, which caused a fragmentation of the European market. She urged therefore to improve the market access conditions.

Eduardo Shaw, Executive Director of DERES, a non-profit business organisation that promotes Corporate Social Responsibility in Uruguay, saw the Mercosur-EU FTA as “a catalyst to make Mercosur work”, should all members of the group be able to agree to cooperate. He suggested, though, that a two-speed development for the FTA should be discussed, allowing for Brazil, Paraguay and Uruguay to move forward faster, even if Argentina and Venezuela continued to remain hesitant.

With regards to sustainability, he saw an important task for civil society organisations. They should both advocate sustainability towards governments as well as make sustainability a focus in education, not only at university level, but already at an early age. Last but not least, he pointed out that consumers needed to start buying more consciously.

Gustavo Pimentel, Director of SITAWI, a non-profit organisation which develops and operates innovative financial solutions for social and environmental development, proposed that Brazil should invest into the commercialisation of its “massive potential for solar energy”. True to the Brazilian attitude of import substitution by local products, though, it was currently looking into manufacturing its own panels instead of importing them.

ethosEnrique Lian, Executive Director of the Instituto Ethos, closed the even pointing out that “the best day in Germany only generates 60% of the solar power of the worst day in Brazil”. Brazil only needed to seize the moment.

Christina Brunnenkamp

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