circular economy,  compliance e AEO,  free trade agreement

MERCOSUR free trade agreement: the new text (environmental clauses and rules of origin)

Gennaio 1, 2025 /

In this article, we share the latest changes made on the text of the free trade agreement published by EU on 2019. We’ll focus on:

  1. Environmental changes (Paris agreement and specific section on sustainable development);
  2. Rules of origin for calculating the preferential origin (reduced customs duty) under the free trade agreement between the EU and MERCOSUR (Brazil, Argentina, Paraguay and Uruguay).

ENVIRONMENTAL CLAUSES

It is important to start from the evironmental provisions of the abovementioned free trade agreement. About the “climate change” the parties declare that the Paris agreement is an essential element of the next trade relationships. Indeed, they declare that: “ The Parties reiterate their commitment to the implementation of the Paris Agreement adopted under the UN Framework Convention on Climate Change (UNFCCC), reflecting equity and the principle of common but differentiated responsibilities and respective capabilities, in light of different national circumstances”. To enforce this commitment, the EU and MERCOSUR agree that if there is any violation of the Paris agreement it is possible to block the validity of the free trade agreement. It is declared that: “ 3. If either Party considers, on the basis of the factual situation, that the other Party has committed a violation of the obligations that are described as essential elements in Article YY [Respect for democratic principles, human rights and fundamental freedoms] and Article ZZ [Weapons of mass destruction Article, second paragraph] and XX [Paris], it may take appropriate measures. It shall immediately notify the other Party of this fact and of the measures taken. A Party may request to hold urgent consultations on the matter with a view to seeking a mutually agreed solution. The Parties concerned shall endeavour to hold consultations before the appropriate measures are taken. The notifying Party adopting the measures shall submit all relevant information required for a thorough examination of the situation. For the purpose of this paragraph, ‘appropriate measures’ may include the suspension, in part or in full, of this Agreement. Suspension of this Agreement is a measure of last resort and can be imposed only in the event of particularly serious and substantial violations of the essential elements set out in Article YY, Article ZZ and XX. In such an event, the Parties shall be released from the obligation to perform this Agreement, in full or in part, in their mutual relations during the period of the suspension. Such suspension shall apply for the minimum period necessary to resolve the issue in a manner acceptable to the Parties”.

To the first version, it is added the annex to the Trade and Sustainable Development chapter for which the EU and MERCOSUR affirm that they:

  1. “are uniquely placed to lead by example in the integration of trade and sustainable development and that this should be pursued in a collaborative manner”;
  2. Are committed “to improve their relevant laws and policies so as to ensure high and effective levels of environment and labour protection”;
  3. “acknowledge that sustainability measures affecting trade must be fully consistent with their obligations under the WTO Agreements”. Indeed, the principle 12 of the Rio Declaration, “trade policy measures for environmental purposes should not constitute a means of arbitrary or unjustifiable discrimination or a disguised restriction on international trade. Unilateral actions to deal with environmental challenges outside the jurisdiction of the importing country should be avoided. Environmental measures addressing transboundary or global environmental problems should, as far as possible, be based on an international consensus”.

PREFERENTIAL ORIGIN CLAUSES

Another important point of the free trade agreement between the EU and MERCOSUR is the right for the economic operators located in the customs territories of these parties, to claim the preferential origin status of their goods. This status allows the  importer to pay customs duties either with reduced rate or without any duty (0%)

Besides the mentioned prerequirement, the preferential customs treatment under the free trade agreement between the EU and MERCOSUR requires the proof of the compliance of the goods manufactured and exported with the rules lays down by the protocol of origin and the specific rules. This benefit (reduced/canceled customs duty) needs the statement of origin of the goods, the recording and keeping of the ancillary documents, the non-alteration transport rule.