Trade and Environment in EU-Mercosur Relations: Negotiating in the Shadow of Unilateralism

This article analyses the interplay between the negotiation of sustainability commitments in trade agreements and unilateral measures adopted to promote sustainability in international trade, focusing on relations between the European Union (EU) and the Common Market of the South (Mercosur). We consider the negotiations for inclusion and reform of provisions on Trade and Sustainable Development (TSD) in the agreed EU-Mercosur Partnership Agreement (EUMPA). These negotiations took place at the same time as the EU forged ahead with unilateral measures linking trade policy and environmental objectives. We consider not only measures directly targeting global value chains – the Deforestation Regulation, Due Diligence Directive, and Carbon Border Adjustment Mechanism (CBAM) – but also measures not usually associated with international trade, such as the Environmental Crime Directive, the EU Taxonomy for Sustainable Activities, the anti-greenwashing Green Claims Directive, and the sustainability exception for agreements between competitors. In light of this ‘sustainability arsenal’ and its foreseeable impacts, we examine the agreed and proposed provisions in the EUMPA to pursue environmental sustainability in production and trade, considering how they can add to, facilitate the effectiveness of, or impose limits on, the impact of the EU’s unilateral measures.