Trade versus Trees: Does the EU–Mercosur Agreement Have Legal Safeguards ThatCan Prevent Deforestation?
Introduction
After twenty-five years of heated negotiations, the European Union (EU) and the Mercosur countries have established a trade agreement. The Interim Trade Agreement (iTA) and the wider EU-Mercosur Partnership Agreement were signed on 17 January 2026. The agreement eliminates around 91% of tariffs on EU exports to Mercosur, comprising cars, machinery, and chemicals. At the same time it liberalises around 93% of Mercosur's exports to the EU, hence expanding access for beef, poultry, sugar and ethanol. This instrument covers trade and investment liberalisation, as well as political dialogue and cooperation. Mercosur’s principal gains include greater access for agricultural products. In exchange, the agreement's proponents point to new commitments on forests and continued application of the EU Deforestation Regulation (EUDR) as evidence that liberalisation and environmental protection have been reconciled.
Supporters of the agreement argue that the reconciliation enables stronger forest commitments, the recognition of the Paris Agreement as an essential element of the relationship and the continued application of the EU Deforestation Regulation. However, balancing climate commitments with trade liberalisation is especially complex when dealing with Mercosur countries who are among the most affected by deforestation. Mercusor has a distinct land and crop production advantage over the European Union due to abundant land resources, meaning a tariff reduction of 90% in customs duties could incentivise further expansion of export-orinted production of exports, thereby increasing the pressure on forests (Dupré, 2025).
This article explores whether the EU-Mercosur Agreement has legal safeguards capable of preventing trade liberalisation from leading to further deforestation. It argues that the agreement strengthens the formal recognition of deforestation as a trade concern, but fails to establish a legal mechanism capable of enforcing forest protection.
Liberalisation and Deforestation Risk
Agricultural trade is not automatically environmentally harmful, however research models that effects of the EU-Mercosur agreement has projected increased land conversion in Mercosur (Buczinski et al., 2023). Deforestation of the Brazilian Amazon rainforest has already reached a critical point with over 17% of its forest being lost (Greenpeace, 2025). With the agreement guaranteeing preferential access to the European market, the commodities that will benefit most are beef, ethanol and soy-fed livestock. These are also those consistently identified as deforestation drivers in the region, therefore introducing the risk of further deforestation (Arima et al., 2021).
The mechanism behind it explains the increased deforestation risk as a result of the agreement: by reducing tariffs and expanding preferential access for agricultural products, export-oriented production becomes more profitable. Commodities that are linked to deforestation are targeted explicitly by the Mercosur Agreement (Arima et al., 2021). Notably, the cattle sector is the main driver of deforestation in the Mercusor region, and by lowering the the costs of exporting these commodities, it alters the economic incentives surrounding land-intensive production in a sector where that incentive already drives deforestation (Pendrill et al., 2019).
Environmental Protection under the Agreement
The EU-Mercosur Agreement seeks to address the environmental risks associated with increased trade through a combination of treaty-based commitments and existing EU legislation. The negotiations between March 2023 and December 2024 have introduced pivotal elements in the area of climate change (European Commission, n.d.).
The Paris Agreement
The Paris Agreement on Climate Change is a key element of the new deal. It treats the Paris Agreement as an “essential deal”, meaning it will allow the suspension of the agreement if a party exits the agreement or if it stops being a party “in good faith”. This is important for the Amazon region to ensure the production of the exports does not involve deforestation (European Commission, n.d.). This is an addition compared to the 2019 text, and it signals that climate commitments are no longer treated as separable from trade.
The Trade and Sustainable Development (TSD) Commitments
Within the agreement, the TSD chapter contains commitments relating to forest conservation, illegal logging and sustainable supply chains. Following the new deal, a new annex to the chapter has been negotiated with new commitments to deforestation from 2030. This is the first agreement where the parties are taking an individual legal commitment to prevent deforestation (European commission, 2024).
The EU Deforestation Regulation (EUDR)
The EUDR is a standalone mechanism to tackle deforestation.The EU has attempted to target global value chains with a landmark law that aims to minimise the EU’s impact on deforestation (Greenpeace, 2025). The deforestation regulation ((EU) 2023/1115) imposes obligations on transnational operators and importers to ensure their products are “deforestation-free”. The EU has made market access contingent on environmental standards, mimciking the Brussels Effect (De Schaetzen, 2026).
Under the requirement, Regulation ((EU) 2023/1115) requires that companies must conduct due diligence on imported, traded or exported products from the EU. This is based on self-assessment where they must declare that the products conform with the law. Mercosur products remain fully subject to it and the trade agreement grants no exemption.
Member State competent authorities are responsible for EUDR enforcement, as they can inspect operators and impose penalties for non-compliance such as fines, confiscation and exclusion from public contracts. This regulation operates alongside a unilateral EU market rule designed to exclude deforestation-linked commodities therefore providing an additional product-level safeguard (Greenpeace, 2025) .
Why the Agreement may still not be “Deforestation-Free”
Despite placing deforestation commitments on the same formal legal footing as commercial obligations, the deal did not resolve whether those commitments could be effectively enforced. The question is therefore whether they are sufficiently precise, measurable and supported by effective remedies (Ortiz-Hernández, 2025).
The deforestation commitment illustrates this problem. The additional TSD framework requires “Parties commit to take measures to stop further deforestation from 2030” and “Cooperation and commitments to support Mercosur countries in facilitati[ng] the implementation of the EU Deforestation Regulation”. The European Commission presents this as a legally binding commitment and emphasises that disputes may be submitted to consultations and even an independent panel of experts (European Commission, n.d.). Nevertheless, the legal effect of the provision depends on the interpretations of “take measures” and “support”. These formulations require action, but they do not establish a specific reduction target, measurable forest-loss thresholds or an automatic consequence where deforestation continues (Greenpeace, 2025). Greenpeace argues that the provisions of the sustainability annex could weaken the implementation of the EUDR in relation to Mercosur products.
Legal scholars also highlight similar concerns surrounding the limited enforcement of the agreement. A 2025 study on the enforcement of environmental clauses in the agreement concludes that enforcement remains limited by imprecise control over measuring deforestation, inadequate mechanisms for verifying the origin of raw materials and non-transparent supply-chain monitoring. The authors warn that non-reliable traceability and monitoring may lead to an agreement that fails to recognise whether the commodities benefiting from liberalised trade are connected to forest loss (Olech et al., 2025).
The relationship between the EU-Mercosur agreement and the EUDR introduces a further difficulty. The EUDR uses market-access conditionality meaning that operators wishing to place covered commodities on the EU market must trace them to their origin and demonstrate compliance with deforestation-free requirements. This is known as the Brussels Effect, where EU rules influence production outside Europe without directly legislating within Mercosur territory. Imposing due-diligence measures from foreign supply chains have proved difficult as they have faced resistance from industries and trading partners, leading to the EU simplification or weakening of some EU sustainability obligations (De Schaetzen, 2026). Greenpeace further criticises the relationship between the agreement and the EUDR. It argues that Clause 10 of the sustainability annex, which discourages the EU’s unilateral measures addressing environmental problems outside the importing country’s jurisdiction, could be invoked politically against measures such as the EUDR (Greenpeace, 2025). This could set dangerous precedents for EU trade deals with countries where other large areas of forest are situated (Greenpeace, 2025)
However, not all legal assessments of the EU-Mercosur are negative. A European Parliament study published in 2025 concluded that the EU-Mercosur agreement revisions have reduced sustainability related risks, and allow the unilateral measures imposed by the EU, such as the EUDR to safeguard deforestation-free products standards, to prevail independently of the trade agreement (Hagemejer et al., 2025).
The disagreement is therefore not about whether the revised agreement contains environmental improvements, but whether those improvements are sufficiently enforceable to prevent increased trade from contributing to continued deforestation.
Conclusion
The EU–Mercosur Agreement represent genuine progress in legally recognising deforestation. Nevertheless, the academic and policy literature reveals the prevailing weaknesses: the enforcement of the agreement. The agreement may therefore be legally binding without being practically enforced, as until the EU and Mercosur develop and adopt shared monitoring systems, the environmental credibility of its sustainability commitments will remain uncertain. The agreement recognises the conflict between trade and forest protection, but it does not yet guarantee that forest protection will prevail when the two come into tension. To reconcile trade liberalisation with climate protection, preventing irreversible environmental harm must become a clear legal priority supported by enforceable mechanisms.
References
Arima, E., Barreto, P., Taheripour, F., & Aguiar, A. (2021). Dynamic Amazonia: The EU–Mercosur Trade Agreement and Deforestation. Land (Basel), 10(11), 1243.
Buczinski, B., Chotteau, P., Duflot, B., & Rosa, A. (2023). The EU-Mercosur Free Trade Agreement, its impacts on agriculture. Institut de l'Elevage; Greens/EFA Group in the European Parliament.
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De Schaetzen, E. (2026). Unilateral regulation without mirror clauses? The limits of the EU's Brussels effect in the EU–Mercosur agreement. Opinio Juris.
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Dupré, M. (2025, April 1). EU-Mercosur Agreement : A ticking time bomb for forests – Institut Veblen / Veblen Institute. Institut Veblen / Veblen Institute.
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Greenpeace. (2025). EU-MERCOSUR vs the EUDR: How the Commission traded the EU Deforestation Regulation away and got a bad deal in return.
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Hagemejer, J., et al. (2025). An update on the economic, sustainability and regulatory effects of the trade part of the EU-Mercosur Partnership Agreement (EXPO_STU(2025)754476). European Parliament, Policy Department for External Relations.
Olech, I., Krupska, K., & Kosior, K. (2025). The problem of enforcing environmental clauses in the EU–Mercosur Partnership Agreement in the context of the discrepancy in deforestation indices. Forests, 16(12), 1821. https://doi.org/10.3390/f16121821
Ortiz-Hernández, E. (2025). HAPING GLOBAL TRADE NORMS: THE EU-MERCOSUR AGREEMENT AND THE EU’S ROLE IN THE INTERNATIONAL ORDER. EU And Comparative Law Issues and Challenges Series, 9, 99–126. https://doi.org/10.25234/eclic/38094
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Regulation (EU) 2023/1115 of the European Parliament and of the Council of 31 May 2023 on the making available on the Union market and the export from the Union of certain commodities and products associated with deforestation and forest degradation and repealing Regulation (EU) No 995/2010, 2023 O.J. (L 150) 206–247.
Cover image
crustmania. (2006). Deforestation [Photograph]. Flickr. Licensed under Creative Commons Attribution 2.0 Generic. Image cropped/resized from original.
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