Austrian lawmakers rejected the EU-Mercosur trade deal on Wednesday, raising objections over its environmental impact.
The free trade pact between the EU, Brazil, Uruguay, Paraguay, and Argentina was thrown further into doubt on Wednesday after Austria’s parliament rejected the agreement.
The government is now obliged to follow through the decision at an EU level. The agreement must be ratified by all 28 member states.
France, Ireland, and Luxembourg wanted to freeze the implementation of the deal over concerns about the management of the rain forest by the government of the Brazilian President Jair Bolsonaro.
The agreement signed in June concluded two decades of negotiations between the two trade blocs.
Many of longstanding differences between the two blocs included a demand from Mercosur that it be given greater access to the EU’s agricultural market, including its beef and sugar industries. Brussels, which had taken a hard stance on Mercosur’s demands for greater access to lucrative EU commodities sectors, wanted in return a lowering of the automotive-import barriers.
Taking into account the GDP of all the countries concerned, the agreement concluded by the EU in 2018 with Japan is slightly larger (€19.5 trillion) than that with Mercosur (€18 trillion), but in terms of population, the EU-Mercosur agreement is bigger, covering nearly 800 million people, significantly more than the 630 million covered in the EU-Japan deal.
The EU’s agri-food sector will benefit from slashing the existing high tariffs imposed by Mercosur on EU export products, chocolates and confectionery, wines, spirits, and soft drinks.