Mercosur Agreement + Italy’s Mediterranean strategy + Pesticide ban

Dear reader,

The EU-Mercosur free trade agreement is finally supposed to move forward after many years of stalemate. But a meeting of negotiators from both sides in Buenos Aires this Wednesday and Thursday has now been postponed until May. The reason: The Mercosur side, in particular, needed more time to prepare for the additional declaration on sustainability demanded by the Europeans, according to EU circles. And precisely this additional declaration is causing a lot of criticism among the concerned South American countries, report Daniela Chiaretti and Till Hoppe.

Italy’s Mediterranean coast is a hotspot for migration to Europe. Giorgia Meloni’s new right-wing government has now declared a state of emergency to expel migrants more quickly. But Meloni is betting on another, long-term strategy: gas deals in exchange for more restrictive migration measures in African countries of origin, writes Isabel Cuesta Camacho.

Do you remember? Almost 3,000 amendments have been submitted to the planned pesticide regulation. The total ban on protected zones has met with much criticism. Commission President Ursula von der Leyen has now signaled that she will give in on the issue. Read more about this in our news section.

Your
Alina Leimbach

EU and Mercosur wrangle over climate pledges

The European Union is meeting resistance with its request to oblige the four Mercosur states to protect the rainforest. The EU Commission wants to encourage Argentina, Brazil, Paraguay and Uruguay to sign a binding addendum to the free trade agreement that has been negotiated but not yet signed. But the governments there have so far refused to do so.

Negotiators from both sides were supposed to meet this Wednesday and Thursday in Buenos Aires to discuss Europe’s demands. On the table, this time was supposed to be a text proposal from the Mercosur governments on the additional declaration requested by the EU. However, the physical meeting was postponed yesterday at short notice until May. The Mercosur side in particular needed more time to prepare, according to EU sources. Both sides “remain determined to finalize the agreement, including the supplementary instrument, as soon as possible”, a Commission spokeswoman said.

During the first round of negotiations in March, the Commission presented its proposal to flesh out the commitments made under the sustainability section of the trade agreement. The aim: Addressing concerns in the EU states and the European Parliament that free trade with the South American countries could potentially contribute to the deforestation of the rainforest. This way, the Commission wants to win approval for the agreement, which particularly France, Austria and the Netherlands find highly controversial.

The European text proposal was leaked before Easter. It involves these areas:

Keeping the commitments made in the Paris Agreement, including the concrete implementation of forest protection
Implementation of the biodiversity convention negotiated in Montreal
ratification of fundamental and other relevant ILO Conventions

Concern about backdoor sanctions

The European proposal contained 19 references to the Paris Agreement alone. It provides for voluntary objectives for the signatory states and does not include any sanctions to enforce them. South America is concerned that the EU could introduce sanctions through the back door by introducing a binding addendum. For example, tariff concessions agreed in the EU-Mercosur Treaty could be suspended if the national targets of the Paris Agreement are missed, warns an official from Uruguay. In Brasilia, too, fears are voiced that the wording could be a gateway for trade sanctions if the government does not severely restrict deforestation in the Amazon region.

The Mercosur countries are also opposed to introducing issues into the negotiations that were not part of the fundamental political agreement in 2019. These include, in particular, the Global Biodiversity Framework, which was agreed upon in Montreal last December but has not yet been ratified by the countries. Governments also believe that the text proposed by the EU is heavily weighted towards environmental conservation and ignores the other two pillars of sustainable development – the social and economic aspects. This is an old dispute between the two trading blocs.

Furthermore, Mercosur governments are concerned about how the EU regulation on deforestation-free products or the Carbon Border Adjustment Mechanism (CBAM), which were passed in the European Parliament on Wednesday, are related to the EU-Mercosur agreement.

Furthermore, Mercosur governments are concerned about how the EU regulation on deforestation-free products or the Carbon Border Adjustment Mechanism (CBAM), which were passed in the European Parliament on Wednesday, are related to the EU-Mercosur agreement.
“They are unilateral and may affect the balance of the agreement, which took 20 years to negotiate,” Brazilian government sources stated.

Greens demand sanction mechanisms

The EU Commission is trying to dispel these concerns. Such disputes should not be settled through sanctions, but with the help of an expert panel, a high-ranking EU official says.

However, the Commission itself is facing pressure: The German Greens, in particular, have so far made their consent to the agreement dependent on improved enforcement of the sustainability agreements. What is needed is “a new version of the supplementary agreement, including dispute settlement mechanisms with sanctions, so that effective forest protection measures are actually enshrined”, demanded Maik Außendorf, a Green member of the Bundestag, after a hearing on the Mercosur agreement in the Economic Committee.

Interest in reaching an agreement

Now it comes to a showdown. Both sides express great interest in the trade agreement. They have declared their intention to reach an agreement by the end of the year at the latest. In July, Brazil takes over the presidency of Mercosur for six months. In the EU, Spain takes over the presidency, which is also committed to the agreement.

The free trade agreement with the four South American countries would be the economically most significant treaty the EU has ever signed: It could save exporters four billion euros in customs tariffs per year. By comparison, the deal with Japan saves about one billion euros. Brazil and other countries protect their markets with high import tariffs of 35 percent on cars. Mechanical engineering, the agricultural, chemical and pharmaceutical sectors would also benefit.

Both sides have geopolitical goals

However, the economic advantages are not the only reason why Commission President Ursula von der Leyen and German Chancellor Olaf Scholz support the trade agreement: They see it as a means of pulling Latin American countries over to their side in the geopolitical power struggle. China has greatly increased its trade with the region over the past few years and has replaced the EU as its main trading partner.

In fact, China is by far the biggest trading partner for Brazil. This is reflected in the very pro-Beijing course that President Lula da Silva is now pursuing. During his visit to Beijing, Lula made it clear that he does not share the West’s course of distancing itself from authoritarian states like China and Russia. Furthermore, China and Brazil agreed in late March to conduct more trade directly in their own national currencies in the future, thus reducing their dependence on the US dollar.

Lula has announced that he also wants to negotiate a trade agreement with Beijing. Before that, however, he wants to finalize the deal with the Europeans, according to Brussels. In the Mercosur countries, there is “an interest in maintaining the EU as a counterweight to the USA and China,” says a high-ranking EU official. By Daniela Chiaretti and Till Hoppe

Gas Deals against Migration: Italy’s Mediterranean strategy

By

Isabel Cuesta Camacho

Since April 11, Italy has been under a state of emergency regarding migration. The right-wing government of Giorgia Meloni imposed the state when more than 3,000 refugees landed in Italy within three days. The measure, which will be extended to the entire country for six months, provides the government with extraordinary powers to speed up the admission or expulsion of migrants.

In this way, head of government Meloni intends to show she is tackling the migration issue. But her concern goes beyond that: She wants to draw the EU’s attention to the shared responsibility for migrants in the Mediterranean region and generate pressure. After all, with just over 40,000 asylum seekers, Italy ranks fourth within the EU among countries with the most applications, behind much larger countries like Germany and France. For many migrants, the country is the point of arrival in the EU because of its Mediterranean coast, even if they move on to other countries.

Tough line on migration issue also before Meloni

Domestically, there is more to this than Meloni’s calculation to prove herself to her electorate. Political scientist Giovanni Orsina of the University of Luiss recalls that Paolo Gentiloni’s left-wing government had also tried to stem the flow of migrants by concluding an agreement with the Libyan government in 2017. He said Meloni did not go so far as to turn back migrants in the Mediterranean and violate international law.

At the same time, the geopolitical relationship with North African countries is complex, not just for Italy: “There is informal competition between European countries to secure energy contracts with countries like Algeria and Libya,” explains Nando Sigona, an expert on migration at the University of Birmingham. There is a whole range of political interests that, in principle, have nothing to do with migration but are linked to it.

Deals between energy and migration

This mix of migration problems and the need for energy sources is currently manifesting in Italy in the so-called Piano Mattei, which Meloni plans to unveil in October. The plan is named after Enrico Mattei, founder of the energy company Eni. The Meloni government’s new strategy in the Mediterranean aims to make Italy an energy hub and curb illegal migration. “The Mattei Plan discusses contracts for energy sources and agreements with African countries on the management of migration,” Sigona says.

Accordingly, Meloni’s first trip this year in late January took her to Algeria, followed a few days later by another official visit to Libya. Last week, Meloni visited Ethiopia. The Mattei Plan is to be launched from these three countries with the help of Eni. The deals often involve gas, which Italy wants to use to be less dependent on Russia. The deals are also intended to strengthen Italy’s influence in African countries.

Italy also needs migrants

Italy is trying to shift the migration problem onto Libya or Tunisia, Orsina criticizes. He says there is hypocrisy here throughout Europe: “Certain types of refugees are not really wanted by the public.” Sigona stresses, “Europe needs migrants, from a utilitarian, not a humanitarian point of view.” The migration expert points to the aging of European society as well as the low birth rate and pension crisis.

As shown by Italy’s latest economic and fiscal planning document published last week. It shows that Italy’s national debt increases if there are fewer immigrants. “The paradox is that a right-wing government acknowledges the necessity of migrants,” says political scientist Orsina. “But it is important to remember that it is an abstract discourse and that the process of integrating migrants takes time.”

Meloni: ‘Let’s raise the levels of female employment’

However, at public appearances such as the opening of the prestigious Salone del Mobile furniture exposition on Tuesday, Meloni insists the labor problem will not be solved by migration but by getting women to work more and encouraging Italian families to have children: “Let’s raise the levels of female employment and encourage the possibility for families to bring children into the world.”

The questions that then become relevant are: What kind of migrants does Europe want, integrated in what way, and where will the money for the integration of migrants come from? During his visit to Poland on Monday, Italian President Sergio Mattarella said, “We need a new immigration and asylum policy to overcome old rules that date back to prehistory.”

Again no agreement on joint ammunition procurement

The Committee of Permanent Representatives in Brussels could not agree on legal details of the joint procurement plan for artillery ammunition on Wednesday. The Swedish EU presidency actually wanted to conclude before Easter.

At its core, the conflict revolves around the exact definition of “Made in Europe” for ammunition. Initially, France, in particular, wanted to define the term very narrowly and only permit production in EU member states and Norway. Accordingly, even European defense companies, some of them owned by companies in third countries, would not have been able to get a turn.

It was still said in the morning that France was quite isolated and blocked an agreement on its own. According to diplomats, a narrow definition of “Made in Europe” is also nonsensical because the capacities within Europe are not sufficient given the needs of the member states and Ukraine.

New compromise with new legal issues

In the afternoon, the Swedish presidency presented a new compromise proposal. Diplomats said in the evening that progress had been made and a solution was about to be found. There is now a solid basis for an agreement. Several ambassadors would now have to consult their capitals. The compromise proposal raised several new legal questions. He said, there is still a need for clarification as to the size of components proportion from third countries and to what degree the supply chain in production must be within Europe.

The EU ambassadors are to resume the discussion next week. The foreign ministers’ agenda next Monday in Luxembourg does not include the more technical ammunition issue.

The procurement plan is the second track of the three-pronged approach of EU Foreign Affairs Commissioner Josep Borrell and EU Internal Market Commissioner Thierry Breton. The heads of state and government had, in principle, agreed to the proposal at the summit in late March. €1 billion from the European Peace Facility (EPF) was reserved for the first track, with which member states are to be compensated up to 60 percent if they hand over artillery ammunition from their stocks to Ukraine by the end of May. Here, implementation has already begun. Another billion from the EPF has been earmarked for the second track of joint procurement. The funds are intended to replenish the stocks in the member states and, in parallel, to supply Ukraine with further artillery ammunition, especially of 155-millimeter caliber.

The third track aims to strengthen the production capacities of the defense industry in the EU states. Thierry Breton has visited factories in the various member states in recent weeks and went to Sweden to see for himself yesterday. The Internal Market Commissioner is due to present his proposal on how he intends to boost the capacities of the defense industry in Europe Wednesday next week. sti

Von der Leyen sees need for action on pesticide ban

Commission President Ursula von der Leyen seems willing to respond to the massive criticism of the Commission’s proposal on pesticide regulation. During her visit to the CDU federal management committee on Monday, she was confronted with the concerns of farmers by several participants that large parts of protected areas could no longer be farmed in the event of a total pesticide ban. Participants in the meeting told Table.Media that von der Leyen signaled she saw the problem.

Agricultural associations see food security in Germany and Europe endangered by a strict pesticide ban on protected areas and fear for the existence of many farms. CDU Deputy Chairman Andreas Jung also warns: “With a complete ban on pesticides in Natura 2000 and FFH areas, many farmers would have to stop production – in conventional and organic farming.”

A complete ban on pesticides in protected areas is considered unlikely. Many member states, including Germany, oppose the ban and call on the Commission to carry out an impact assessment on the effects of pesticide regulation on food safety in the EU. In the EU Parliament, all rapporteurs are against a total ban, as envisaged in the Commission proposal. luk

AI Act: vote postponed until May

Negotiating circles said on Wednesday that negotiators in Parliament will be unable to keep to the planned timetable for the vote on the AI Act. Accordingly, there were still too many details to be clarified at the technical level. Therefore, the rapporteurs canceled the last political meeting planned for yesterday, Wednesday. Instead, another technical meeting was held.

The rapporteurs have not yet named a new date for a Shadows meeting to resolve the final outstanding issues. However, the vote in the joint IMCO-LIBE committee is now scheduled for May 11. According to negotiating circles, it is the last possible date for obtaining a negotiating mandate before the end of June. Then, the start of the trilogue could still take place under the Swedish Council Presidency.

Just late last week, the rapporteurs presented their proposal on how Foundation Models could be built into the regulation. Foundation Models are basic AI models (general purpose AI) that serve as a starting point for the development of more specialized AI models. This addition seemed necessary to the MEPs, not least because of the launch and rapid spread of the ChatGPT AI model.

Need for discussion about Foundation Models

However, the negotiators had too little time to deal with the proposed amendments published by Contexte. There was still a great need for discussion, among other things, because the Greens/EFA consider it problematic that Foundation Models should be subject to a different regime than other AI models. This poses the risk of loopholes for AI developers.

In the technical meeting on Wednesday, the negotiators addressed, among other things, the issue of AI models based on open source, in addition to Foundation Models. These are now not to fall within the scope – unless they are built as components into a product on the market that falls within the regulation. vis

Ukrainian grain: Commission announces emergency measures

On Wednesday, the European Commission announced a series of measures to prevent further market disruptions within the EU caused by cheap grain from Ukraine. In a letter to the heads of government of Poland, Hungary, Bulgaria, Romania, and Slovakia, Commission President Ursula von der Leyen expresses her understanding and promises further financial aid. According to the letter, the already pledged support package of €36.3 million for the hardest-hit farmers in the regions will be increased by another €100 million.

In addition, imports of certain foodstuffs from Ukraine are to be limited to quantities that can continue to be exported from neighboring EU countries, according to Commission sources. Ultimately, the grain needs to be transported to where it is urgently needed and thus counteract the global food shortage, they said. Specifically, the measure is to apply to wheat, corn, rapeseed, and sunflower seeds and will last until the end of June.

The Commission is thus using a safeguard clause in the regulation of autonomous trade measures. The latter allows the authority to take quick decisions on assistance to Ukraine without prior approval from member states. “The market access we have granted Ukraine and the EU solidarity lanes we have opened is crucial for Ukraine’s resilience,” von der Leyen said.

Import volume multiplied

However, the measures also create an enormous oversupply in the EU’s border regions and pose challenges for agriculture. Among the reasons are the high costs of onward transport and a lack of logistical capacity. To put this into perspective: in 2021, just under 6,000 tons of corn were imported into Poland, according to the Commission. In 2022, the figure was 1.8 million tons.

Several border states had thus announced over the weekend that they would stop the import of grain and other foodstuffs from Ukraine. The unilateral measures were criticized by the Commission as not permissible and are now to be replaced by uniform EU measures.

In addition, the authority announced long-term measures. For example, the regulation on autonomous trade measures is to be extended and provided with more protective mechanisms for the EU market. In addition, onward transport to other member states and third countries is to be made easier and, above all, cheaper.

Norbert Lins (CDU), Chairman of the Agriculture Committee in the EU Parliament, says even this does not go far enough: “The European Commission must cooperate with the United Nations and buy wheat and ensure its transportation to Africa and the Middle East,” the MEP demands and suggests the formation of a task force or the appointment of a special representative. til

Parliament adopts regulation for deforestation-free supply chains

Yesterday, the EU Parliament adopted the EU regulation on deforestation-free supply chains by a clear majority. The new law, agreed upon by the Council and Parliament in early December, was formally confirmed with 552 votes in favor, 44 against, and 43 abstentions.

Under the new rules, companies may only sell imports of certain products and raw materials from certain countries in the EU if suppliers have submitted a due diligence declaration. This confirms a product does not originate from an area deforested after December 31, 2020, and has not resulted in damage to forests after that date. Companies must also demonstrate that products comply with the legislation of the country of production so that human rights and the rights of indigenous peoples are respected.

Products include cattle, cocoa, coffee, palm oil, soy, wood, rubber, charcoal, printed matter, and some palm oil derivatives; in addition, products containing, fed with, or made from these raw materials (such as leather, chocolate, and furniture).

Commission classifies countries according to deforestation risk

Rapporteur Christophe Hansen (EPP) stressed that the new law is not only significant in the fight against climate change and biodiversity loss. “It should also break the blockade that prevents us from deepening trade relations with countries that share our environmental values and ambitions.”

The new regulation sets new standards for global forest protection, said Internal Market Committee Chair Anna Cavazzini (Greens). “Now it will be a matter of full implementation of the law.” Particularly important for this is the classification of different countries into high, medium, and low risk of deforestation, as this, in turn, influences due diligence obligations and company controls, Cavazzini explained. “Here, the Commission must not give in to lobbying pressure from countries not to be classified as a high-risk country, but must base its classification on objective criteria.”

The countries’ classification by the Commission must take place within 18 months of the regulation’s entry into force. Before that, the Council still has to formally adopt the text. leo

Sustainable economy: EU environment ministers appeal to companies

At the informal Environment Council in Stockholm, EU ministers and Environment Commissioner Virginijus Sinkevičius stressed that European companies are a fundamental part of the process toward a sustainable economy.

“We want Europe to be competitive in a fossil-free economy because demand for fossil-free products will increase,” said Swedish Environment Minister Romina Pourmokhtari. She added that the industry will thus have to move in a fossil-free direction. To do so, it can also count on public-private partnerships, she said after the two-day meeting.

This is because a crucial prerequisite for the green transformation is improving access to public and private finance, Sinkevičius added. “We estimate that additional investment of nearly €600 billion a year will be needed by 2030 to achieve the EU’s goals.”

Mandate on renaturation law in June

The protection of nature and biodiversity also relies on the help of the private sector, the commissioner continued. There are strong EU instruments to guarantee this, including the regulation on sustainable finance disclosure and the new agreement on reporting requirements and taxonomy.

But these alone would not be sufficient, Sinkevičius said. Ambitious nature restoration legislation is also needed. The commissioner announced that member states will set their general direction on the EU restoration law at the next formal Environment Council in June.

The law sets binding targets for the restoration of destroyed ecosystems in member states. However, until now, countries have disagreed on how ambitious and flexible the targets should be. luk

Scholz – Renewables champion

Pieter de Pous

It was a record growth in wind and solar generation that kept the lights on in Europe last year after Russia turned off the gas tap and French nuclear faltered. This did not stop French President Macron from launching an all-in diplomatic offensive in support of more nuclear towards the end of 2022. More surprising has been the complete absence of German Chancellor Scholz in seizing the economic momentum behind renewables to secure new political commitments in their support.

While Macron wooed fellow European leaders to support or engage with a new French-led nuclear alliance, which undermined efforts to set a new EU-wide RES target of 45% by 2030, Scholz not only failed to throw his weight behind similar pro-renewables efforts but also allowed his transport minister to run roughshod over new, already agreed, EU-wide car emission standards.

Global efforts needed

As a result, the EU agreed to a compromise where it would aim for a binding target of 42.5% renewables by 2030 with another 2.5% as an aspirational goal only, still a 10% lift compared to the target currently in place.

The case for a leaders’ level l initiative in support of an unprecedented build-out of renewables remains, however, a pressing one and not just in Europe.

2022 was not only a record year for developing renewables in Europe, but globally too with almost 300 GW being added to the system. The EU’s Energy Chief Kadri Simson together with Director General of IRENA, Francesco Camera, have already come out in support of a tripling of annual deployment levels to 1000 GW by 2030 to keep the chance of limiting warming to 1.5C alive.

Some countries are moving fast

Countries like Brazil (at 77%) and Uruguay (at 94%) have already achieved or soon will, the levels of RES share that the EU is aiming to have by 2030 (69%) or even Germany (80%). Under a new government, Australia is already close to achieving its 80% RES target for 2030.

And major coal consuming and producing countries like South Africa, Indonesia and Vietnam are moving forward, supported also by Germany, with Just Energy Transition Partnerships to phase in renewables and phase out coal.

Renewables: Scholz must step into diplomatic gap

At the same time, Japan is using its G7 Presidency to promote its Green Transformation Agenda, an effort to use whatever technology available to keep fossil power plants online for as long as possible, and blocking progress on stronger political commitments from the G7 to phase out fossil fuels and develop a fully decarbonized power system by 2035. Such a failure by G7 countries will make it harder to make progress with the group of G20 countries as well as at COP28 itself.

With the US concentrating its diplomatic efforts on promoting small nuclear reactors and even trading away a push on clean energy commitments against other geopolitical priorities such as isolating China, there is a Germany-shaped hole to make renewables a top-level priority.

Domestic politics now provides a window of opportunity for Scholz to step up. The common denominator in the agreement reached within the coalition Scholz leads is to speed up government bureaucracy in support of the energy transition. A Deutschland Tempo for more Freedom energy. This provides him with the necessary domestic support to build an international campaign around.

Building on previous global commitments to phase down coal, the negotiations at COP28 will be about whether to phase out all fossil fuels. Major fossil fuel producing and consuming countries range from reluctance to open hostility to such a commitment, originally called for by India and supported by Germany and the EU.

Ambitious diplomatic initiative for renewables needed

An ambitious diplomatic initiative in support of the renewable capacities that will be needed to replace fossil fuels could help address such reservations. By demonstrating the progress that has been made in bringing capacities online, development of the pipeline, investments in grids, organization of power markets as well as to show case and pull together political commitments. And crucially, to provide confidence that finance will be made available.

It was Germany’s early leadership in the early 2000s under another Social Democrat-led government that started the clean energy revolution that curbed fossil generation growth and today has made wind and solar the cheapest and fastest option available globally to build new generation capacities.

Few people are now better placed to bring together a global coalition of leaders committed to taking the next big step forward in building a renewables-centered power system than the next Social Democrat Chancellor whose government has ensured that Germany’s Energiewende is back on track.

EUROPE.TABLE EDITORS

Till
Hoppe

Charlotte
Wirth

Falk
Steiner

Timo
Landenberger

Corinna
Visser

Lukas
Knigge

Eric
Bonse

Sarah
Schaefer

Manuel
Berkel

Lisa-Martina
Klein

Markus
Grabitz

Stephan
Israel

Claire
Stam

Dear reader,

The EU-Mercosur free trade agreement is finally supposed to move forward after many years of stalemate. But a meeting of negotiators from both sides in Buenos Aires this Wednesday and Thursday has now been postponed until May. The reason: The Mercosur side, in particular, needed more time to prepare for the additional declaration on sustainability demanded by the Europeans, according to EU circles. And precisely this additional declaration is causing a lot of criticism among the concerned South American countries, report Daniela Chiaretti and Till Hoppe.

Italy’s Mediterranean coast is a hotspot for migration to Europe. Giorgia Meloni’s new right-wing government has now declared a state of emergency to expel migrants more quickly. But Meloni is betting on another, long-term strategy: gas deals in exchange for more restrictive migration measures in African countries of origin, writes Isabel Cuesta Camacho.

Do you remember? Almost 3,000 amendments have been submitted to the planned pesticide regulation. The total ban on protected zones has met with much criticism. Commission President Ursula von der Leyen has now signaled that she will give in on the issue. Read more about this in our news section.

Your
Alina Leimbach

EU and Mercosur wrangle over climate pledges

The European Union is meeting resistance with its request to oblige the four Mercosur states to protect the rainforest. The EU Commission wants to encourage Argentina, Brazil, Paraguay and Uruguay to sign a binding addendum to the free trade agreement that has been negotiated but not yet signed. But the governments there have so far refused to do so.

Negotiators from both sides were supposed to meet this Wednesday and Thursday in Buenos Aires to discuss Europe’s demands. On the table, this time was supposed to be a text proposal from the Mercosur governments on the additional declaration requested by the EU. However, the physical meeting was postponed yesterday at short notice until May. The Mercosur side in particular needed more time to prepare, according to EU sources. Both sides “remain determined to finalize the agreement, including the supplementary instrument, as soon as possible”, a Commission spokeswoman said.

During the first round of negotiations in March, the Commission presented its proposal to flesh out the commitments made under the sustainability section of the trade agreement. The aim: Addressing concerns in the EU states and the European Parliament that free trade with the South American countries could potentially contribute to the deforestation of the rainforest. This way, the Commission wants to win approval for the agreement, which particularly France, Austria and the Netherlands find highly controversial.

The European text proposal was leaked before Easter. It involves these areas:

Keeping the commitments made in the Paris Agreement, including the concrete implementation of forest protection
Implementation of the biodiversity convention negotiated in Montreal
ratification of fundamental and other relevant ILO Conventions

Concern about backdoor sanctions

The European proposal contained 19 references to the Paris Agreement alone. It provides for voluntary objectives for the signatory states and does not include any sanctions to enforce them. South America is concerned that the EU could introduce sanctions through the back door by introducing a binding addendum. For example, tariff concessions agreed in the EU-Mercosur Treaty could be suspended if the national targets of the Paris Agreement are missed, warns an official from Uruguay. In Brasilia, too, fears are voiced that the wording could be a gateway for trade sanctions if the government does not severely restrict deforestation in the Amazon region.

The Mercosur countries are also opposed to introducing issues into the negotiations that were not part of the fundamental political agreement in 2019. These include, in particular, the Global Biodiversity Framework, which was agreed upon in Montreal last December but has not yet been ratified by the countries. Governments also believe that the text proposed by the EU is heavily weighted towards environmental conservation and ignores the other two pillars of sustainable development – the social and economic aspects. This is an old dispute between the two trading blocs.

Furthermore, Mercosur governments are concerned about how the EU regulation on deforestation-free products or the Carbon Border Adjustment Mechanism (CBAM), which were passed in the European Parliament on Wednesday, are related to the EU-Mercosur agreement.

Furthermore, Mercosur governments are concerned about how the EU regulation on deforestation-free products or the Carbon Border Adjustment Mechanism (CBAM), which were passed in the European Parliament on Wednesday, are related to the EU-Mercosur agreement.
“They are unilateral and may affect the balance of the agreement, which took 20 years to negotiate,” Brazilian government sources stated.

Greens demand sanction mechanisms

The EU Commission is trying to dispel these concerns. Such disputes should not be settled through sanctions, but with the help of an expert panel, a high-ranking EU official says.

However, the Commission itself is facing pressure: The German Greens, in particular, have so far made their consent to the agreement dependent on improved enforcement of the sustainability agreements. What is needed is “a new version of the supplementary agreement, including dispute settlement mechanisms with sanctions, so that effective forest protection measures are actually enshrined”, demanded Maik Außendorf, a Green member of the Bundestag, after a hearing on the Mercosur agreement in the Economic Committee.

Interest in reaching an agreement

Now it comes to a showdown. Both sides express great interest in the trade agreement. They have declared their intention to reach an agreement by the end of the year at the latest. In July, Brazil takes over the presidency of Mercosur for six months. In the EU, Spain takes over the presidency, which is also committed to the agreement.

The free trade agreement with the four South American countries would be the economically most significant treaty the EU has ever signed: It could save exporters four billion euros in customs tariffs per year. By comparison, the deal with Japan saves about one billion euros. Brazil and other countries protect their markets with high import tariffs of 35 percent on cars. Mechanical engineering, the agricultural, chemical and pharmaceutical sectors would also benefit.

Both sides have geopolitical goals

However, the economic advantages are not the only reason why Commission President Ursula von der Leyen and German Chancellor Olaf Scholz support the trade agreement: They see it as a means of pulling Latin American countries over to their side in the geopolitical power struggle. China has greatly increased its trade with the region over the past few years and has replaced the EU as its main trading partner.

In fact, China is by far the biggest trading partner for Brazil. This is reflected in the very pro-Beijing course that President Lula da Silva is now pursuing. During his visit to Beijing, Lula made it clear that he does not share the West’s course of distancing itself from authoritarian states like China and Russia. Furthermore, China and Brazil agreed in late March to conduct more trade directly in their own national currencies in the future, thus reducing their dependence on the US dollar.

Lula has announced that he also wants to negotiate a trade agreement with Beijing. Before that, however, he wants to finalize the deal with the Europeans, according to Brussels. In the Mercosur countries, there is “an interest in maintaining the EU as a counterweight to the USA and China,” says a high-ranking EU official. By Daniela Chiaretti and Till Hoppe

Gas Deals against Migration: Italy’s Mediterranean strategy

By

Isabel Cuesta Camacho

Since April 11, Italy has been under a state of emergency regarding migration. The right-wing government of Giorgia Meloni imposed the state when more than 3,000 refugees landed in Italy within three days. The measure, which will be extended to the entire country for six months, provides the government with extraordinary powers to speed up the admission or expulsion of migrants.

In this way, head of government Meloni intends to show she is tackling the migration issue. But her concern goes beyond that: She wants to draw the EU’s attention to the shared responsibility for migrants in the Mediterranean region and generate pressure. After all, with just over 40,000 asylum seekers, Italy ranks fourth within the EU among countries with the most applications, behind much larger countries like Germany and France. For many migrants, the country is the point of arrival in the EU because of its Mediterranean coast, even if they move on to other countries.

Tough line on migration issue also before Meloni

Domestically, there is more to this than Meloni’s calculation to prove herself to her electorate. Political scientist Giovanni Orsina of the University of Luiss recalls that Paolo Gentiloni’s left-wing government had also tried to stem the flow of migrants by concluding an agreement with the Libyan government in 2017. He said Meloni did not go so far as to turn back migrants in the Mediterranean and violate international law.

At the same time, the geopolitical relationship with North African countries is complex, not just for Italy: “There is informal competition between European countries to secure energy contracts with countries like Algeria and Libya,” explains Nando Sigona, an expert on migration at the University of Birmingham. There is a whole range of political interests that, in principle, have nothing to do with migration but are linked to it.

Deals between energy and migration

This mix of migration problems and the need for energy sources is currently manifesting in Italy in the so-called Piano Mattei, which Meloni plans to unveil in October. The plan is named after Enrico Mattei, founder of the energy company Eni. The Meloni government’s new strategy in the Mediterranean aims to make Italy an energy hub and curb illegal migration. “The Mattei Plan discusses contracts for energy sources and agreements with African countries on the management of migration,” Sigona says.

Accordingly, Meloni’s first trip this year in late January took her to Algeria, followed a few days later by another official visit to Libya. Last week, Meloni visited Ethiopia. The Mattei Plan is to be launched from these three countries with the help of Eni. The deals often involve gas, which Italy wants to use to be less dependent on Russia. The deals are also intended to strengthen Italy’s influence in African countries.

Italy also needs migrants

Italy is trying to shift the migration problem onto Libya or Tunisia, Orsina criticizes. He says there is hypocrisy here throughout Europe: “Certain types of refugees are not really wanted by the public.” Sigona stresses, “Europe needs migrants, from a utilitarian, not a humanitarian point of view.” The migration expert points to the aging of European society as well as the low birth rate and pension crisis.

As shown by Italy’s latest economic and fiscal planning document published last week. It shows that Italy’s national debt increases if there are fewer immigrants. “The paradox is that a right-wing government acknowledges the necessity of migrants,” says political scientist Orsina. “But it is important to remember that it is an abstract discourse and that the process of integrating migrants takes time.”

Meloni: ‘Let’s raise the levels of female employment’

However, at public appearances such as the opening of the prestigious Salone del Mobile furniture exposition on Tuesday, Meloni insists the labor problem will not be solved by migration but by getting women to work more and encouraging Italian families to have children: “Let’s raise the levels of female employment and encourage the possibility for families to bring children into the world.”

The questions that then become relevant are: What kind of migrants does Europe want, integrated in what way, and where will the money for the integration of migrants come from? During his visit to Poland on Monday, Italian President Sergio Mattarella said, “We need a new immigration and asylum policy to overcome old rules that date back to prehistory.”

Again no agreement on joint ammunition procurement

The Committee of Permanent Representatives in Brussels could not agree on legal details of the joint procurement plan for artillery ammunition on Wednesday. The Swedish EU presidency actually wanted to conclude before Easter.

At its core, the conflict revolves around the exact definition of “Made in Europe” for ammunition. Initially, France, in particular, wanted to define the term very narrowly and only permit production in EU member states and Norway. Accordingly, even European defense companies, some of them owned by companies in third countries, would not have been able to get a turn.

It was still said in the morning that France was quite isolated and blocked an agreement on its own. According to diplomats, a narrow definition of “Made in Europe” is also nonsensical because the capacities within Europe are not sufficient given the needs of the member states and Ukraine.

New compromise with new legal issues

In the afternoon, the Swedish presidency presented a new compromise proposal. Diplomats said in the evening that progress had been made and a solution was about to be found. There is now a solid basis for an agreement. Several ambassadors would now have to consult their capitals. The compromise proposal raised several new legal questions. He said, there is still a need for clarification as to the size of components proportion from third countries and to what degree the supply chain in production must be within Europe.

The EU ambassadors are to resume the discussion next week. The foreign ministers’ agenda next Monday in Luxembourg does not include the more technical ammunition issue.

The procurement plan is the second track of the three-pronged approach of EU Foreign Affairs Commissioner Josep Borrell and EU Internal Market Commissioner Thierry Breton. The heads of state and government had, in principle, agreed to the proposal at the summit in late March. €1 billion from the European Peace Facility (EPF) was reserved for the first track, with which member states are to be compensated up to 60 percent if they hand over artillery ammunition from their stocks to Ukraine by the end of May. Here, implementation has already begun. Another billion from the EPF has been earmarked for the second track of joint procurement. The funds are intended to replenish the stocks in the member states and, in parallel, to supply Ukraine with further artillery ammunition, especially of 155-millimeter caliber.

The third track aims to strengthen the production capacities of the defense industry in the EU states. Thierry Breton has visited factories in the various member states in recent weeks and went to Sweden to see for himself yesterday. The Internal Market Commissioner is due to present his proposal on how he intends to boost the capacities of the defense industry in Europe Wednesday next week. sti

Von der Leyen sees need for action on pesticide ban

Commission President Ursula von der Leyen seems willing to respond to the massive criticism of the Commission’s proposal on pesticide regulation. During her visit to the CDU federal management committee on Monday, she was confronted with the concerns of farmers by several participants that large parts of protected areas could no longer be farmed in the event of a total pesticide ban. Participants in the meeting told Table.Media that von der Leyen signaled she saw the problem.

Agricultural associations see food security in Germany and Europe endangered by a strict pesticide ban on protected areas and fear for the existence of many farms. CDU Deputy Chairman Andreas Jung also warns: “With a complete ban on pesticides in Natura 2000 and FFH areas, many farmers would have to stop production – in conventional and organic farming.”

A complete ban on pesticides in protected areas is considered unlikely. Many member states, including Germany, oppose the ban and call on the Commission to carry out an impact assessment on the effects of pesticide regulation on food safety in the EU. In the EU Parliament, all rapporteurs are against a total ban, as envisaged in the Commission proposal. luk

AI Act: vote postponed until May

Negotiating circles said on Wednesday that negotiators in Parliament will be unable to keep to the planned timetable for the vote on the AI Act. Accordingly, there were still too many details to be clarified at the technical level. Therefore, the rapporteurs canceled the last political meeting planned for yesterday, Wednesday. Instead, another technical meeting was held.

The rapporteurs have not yet named a new date for a Shadows meeting to resolve the final outstanding issues. However, the vote in the joint IMCO-LIBE committee is now scheduled for May 11. According to negotiating circles, it is the last possible date for obtaining a negotiating mandate before the end of June. Then, the start of the trilogue could still take place under the Swedish Council Presidency.

Just late last week, the rapporteurs presented their proposal on how Foundation Models could be built into the regulation. Foundation Models are basic AI models (general purpose AI) that serve as a starting point for the development of more specialized AI models. This addition seemed necessary to the MEPs, not least because of the launch and rapid spread of the ChatGPT AI model.

Need for discussion about Foundation Models

However, the negotiators had too little time to deal with the proposed amendments published by Contexte. There was still a great need for discussion, among other things, because the Greens/EFA consider it problematic that Foundation Models should be subject to a different regime than other AI models. This poses the risk of loopholes for AI developers.

In the technical meeting on Wednesday, the negotiators addressed, among other things, the issue of AI models based on open source, in addition to Foundation Models. These are now not to fall within the scope – unless they are built as components into a product on the market that falls within the regulation. vis

Ukrainian grain: Commission announces emergency measures

On Wednesday, the European Commission announced a series of measures to prevent further market disruptions within the EU caused by cheap grain from Ukraine. In a letter to the heads of government of Poland, Hungary, Bulgaria, Romania, and Slovakia, Commission President Ursula von der Leyen expresses her understanding and promises further financial aid. According to the letter, the already pledged support package of €36.3 million for the hardest-hit farmers in the regions will be increased by another €100 million.

In addition, imports of certain foodstuffs from Ukraine are to be limited to quantities that can continue to be exported from neighboring EU countries, according to Commission sources. Ultimately, the grain needs to be transported to where it is urgently needed and thus counteract the global food shortage, they said. Specifically, the measure is to apply to wheat, corn, rapeseed, and sunflower seeds and will last until the end of June.

The Commission is thus using a safeguard clause in the regulation of autonomous trade measures. The latter allows the authority to take quick decisions on assistance to Ukraine without prior approval from member states. “The market access we have granted Ukraine and the EU solidarity lanes we have opened is crucial for Ukraine’s resilience,” von der Leyen said.

Import volume multiplied

However, the measures also create an enormous oversupply in the EU’s border regions and pose challenges for agriculture. Among the reasons are the high costs of onward transport and a lack of logistical capacity. To put this into perspective: in 2021, just under 6,000 tons of corn were imported into Poland, according to the Commission. In 2022, the figure was 1.8 million tons.

Several border states had thus announced over the weekend that they would stop the import of grain and other foodstuffs from Ukraine. The unilateral measures were criticized by the Commission as not permissible and are now to be replaced by uniform EU measures.

In addition, the authority announced long-term measures. For example, the regulation on autonomous trade measures is to be extended and provided with more protective mechanisms for the EU market. In addition, onward transport to other member states and third countries is to be made easier and, above all, cheaper.

Norbert Lins (CDU), Chairman of the Agriculture Committee in the EU Parliament, says even this does not go far enough: “The European Commission must cooperate with the United Nations and buy wheat and ensure its transportation to Africa and the Middle East,” the MEP demands and suggests the formation of a task force or the appointment of a special representative. til

Parliament adopts regulation for deforestation-free supply chains

Yesterday, the EU Parliament adopted the EU regulation on deforestation-free supply chains by a clear majority. The new law, agreed upon by the Council and Parliament in early December, was formally confirmed with 552 votes in favor, 44 against, and 43 abstentions.

Under the new rules, companies may only sell imports of certain products and raw materials from certain countries in the EU if suppliers have submitted a due diligence declaration. This confirms a product does not originate from an area deforested after December 31, 2020, and has not resulted in damage to forests after that date. Companies must also demonstrate that products comply with the legislation of the country of production so that human rights and the rights of indigenous peoples are respected.

Products include cattle, cocoa, coffee, palm oil, soy, wood, rubber, charcoal, printed matter, and some palm oil derivatives; in addition, products containing, fed with, or made from these raw materials (such as leather, chocolate, and furniture).

Commission classifies countries according to deforestation risk

Rapporteur Christophe Hansen (EPP) stressed that the new law is not only significant in the fight against climate change and biodiversity loss. “It should also break the blockade that prevents us from deepening trade relations with countries that share our environmental values and ambitions.”

The new regulation sets new standards for global forest protection, said Internal Market Committee Chair Anna Cavazzini (Greens). “Now it will be a matter of full implementation of the law.” Particularly important for this is the classification of different countries into high, medium, and low risk of deforestation, as this, in turn, influences due diligence obligations and company controls, Cavazzini explained. “Here, the Commission must not give in to lobbying pressure from countries not to be classified as a high-risk country, but must base its classification on objective criteria.”

The countries’ classification by the Commission must take place within 18 months of the regulation’s entry into force. Before that, the Council still has to formally adopt the text. leo

Sustainable economy: EU environment ministers appeal to companies

At the informal Environment Council in Stockholm, EU ministers and Environment Commissioner Virginijus Sinkevičius stressed that European companies are a fundamental part of the process toward a sustainable economy.

“We want Europe to be competitive in a fossil-free economy because demand for fossil-free products will increase,” said Swedish Environment Minister Romina Pourmokhtari. She added that the industry will thus have to move in a fossil-free direction. To do so, it can also count on public-private partnerships, she said after the two-day meeting.

This is because a crucial prerequisite for the green transformation is improving access to public and private finance, Sinkevičius added. “We estimate that additional investment of nearly €600 billion a year will be needed by 2030 to achieve the EU’s goals.”

Mandate on renaturation law in June

The protection of nature and biodiversity also relies on the help of the private sector, the commissioner continued. There are strong EU instruments to guarantee this, including the regulation on sustainable finance disclosure and the new agreement on reporting requirements and taxonomy.

But these alone would not be sufficient, Sinkevičius said. Ambitious nature restoration legislation is also needed. The commissioner announced that member states will set their general direction on the EU restoration law at the next formal Environment Council in June.

The law sets binding targets for the restoration of destroyed ecosystems in member states. However, until now, countries have disagreed on how ambitious and flexible the targets should be. luk

Scholz – Renewables champion

Pieter de Pous

It was a record growth in wind and solar generation that kept the lights on in Europe last year after Russia turned off the gas tap and French nuclear faltered. This did not stop French President Macron from launching an all-in diplomatic offensive in support of more nuclear towards the end of 2022. More surprising has been the complete absence of German Chancellor Scholz in seizing the economic momentum behind renewables to secure new political commitments in their support.

While Macron wooed fellow European leaders to support or engage with a new French-led nuclear alliance, which undermined efforts to set a new EU-wide RES target of 45% by 2030, Scholz not only failed to throw his weight behind similar pro-renewables efforts but also allowed his transport minister to run roughshod over new, already agreed, EU-wide car emission standards.

Global efforts needed

As a result, the EU agreed to a compromise where it would aim for a binding target of 42.5% renewables by 2030 with another 2.5% as an aspirational goal only, still a 10% lift compared to the target currently in place.

The case for a leaders’ level l initiative in support of an unprecedented build-out of renewables remains, however, a pressing one and not just in Europe.

2022 was not only a record year for developing renewables in Europe, but globally too with almost 300 GW being added to the system. The EU’s Energy Chief Kadri Simson together with Director General of IRENA, Francesco Camera, have already come out in support of a tripling of annual deployment levels to 1000 GW by 2030 to keep the chance of limiting warming to 1.5C alive.

Some countries are moving fast

Countries like Brazil (at 77%) and Uruguay (at 94%) have already achieved or soon will, the levels of RES share that the EU is aiming to have by 2030 (69%) or even Germany (80%). Under a new government, Australia is already close to achieving its 80% RES target for 2030.

And major coal consuming and producing countries like South Africa, Indonesia and Vietnam are moving forward, supported also by Germany, with Just Energy Transition Partnerships to phase in renewables and phase out coal.

Renewables: Scholz must step into diplomatic gap

At the same time, Japan is using its G7 Presidency to promote its Green Transformation Agenda, an effort to use whatever technology available to keep fossil power plants online for as long as possible, and blocking progress on stronger political commitments from the G7 to phase out fossil fuels and develop a fully decarbonized power system by 2035. Such a failure by G7 countries will make it harder to make progress with the group of G20 countries as well as at COP28 itself.

With the US concentrating its diplomatic efforts on promoting small nuclear reactors and even trading away a push on clean energy commitments against other geopolitical priorities such as isolating China, there is a Germany-shaped hole to make renewables a top-level priority.

Domestic politics now provides a window of opportunity for Scholz to step up. The common denominator in the agreement reached within the coalition Scholz leads is to speed up government bureaucracy in support of the energy transition. A Deutschland Tempo for more Freedom energy. This provides him with the necessary domestic support to build an international campaign around.

Building on previous global commitments to phase down coal, the negotiations at COP28 will be about whether to phase out all fossil fuels. Major fossil fuel producing and consuming countries range from reluctance to open hostility to such a commitment, originally called for by India and supported by Germany and the EU.

Ambitious diplomatic initiative for renewables needed

An ambitious diplomatic initiative in support of the renewable capacities that will be needed to replace fossil fuels could help address such reservations. By demonstrating the progress that has been made in bringing capacities online, development of the pipeline, investments in grids, organization of power markets as well as to show case and pull together political commitments. And crucially, to provide confidence that finance will be made available.

It was Germany’s early leadership in the early 2000s under another Social Democrat-led government that started the clean energy revolution that curbed fossil generation growth and today has made wind and solar the cheapest and fastest option available globally to build new generation capacities.

Few people are now better placed to bring together a global coalition of leaders committed to taking the next big step forward in building a renewables-centered power system than the next Social Democrat Chancellor whose government has ensured that Germany’s Energiewende is back on track.

EUROPE.TABLE EDITORS

Till
Hoppe

Charlotte
Wirth

Falk
Steiner

Timo
Landenberger

Corinna
Visser

Lukas
Knigge

Eric
Bonse

Sarah
Schaefer

Manuel
Berkel

Lisa-Martina
Klein

Markus
Grabitz

Stephan
Israel

Claire
Stam

Mercosur Agreement + Italy&#8217;s Mediterranean strategy + Pesticide ban

Feature

EU and Mercosur wrangle over climate pledges

Concern about backdoor sanctions

Greens demand sanction mechanisms

Interest in reaching an agreement

Both sides have geopolitical goals

Gas Deals against Migration: Italy’s Mediterranean strategy

Tough line on migration issue also before Meloni

Deals between energy and migration

Italy also needs migrants

Meloni: ‘Let’s raise the levels of female employment’

Events

News

Again no agreement on joint ammunition procurement

New compromise with new legal issues

Von der Leyen sees need for action on pesticide ban

AI Act: vote postponed until May

Need for discussion about Foundation Models

Ukrainian grain: Commission announces emergency measures

Import volume multiplied

Parliament adopts regulation for deforestation-free supply chains

Commission classifies countries according to deforestation risk

Sustainable economy: EU environment ministers appeal to companies

Mandate on renaturation law in June

Opinion

Scholz – Renewables champion

Global efforts needed

Some countries are moving fast

Renewables: Scholz must step into diplomatic gap

Ambitious diplomatic initiative for renewables needed

Europe.Table Editorial Office

EUROPE.TABLE EDITORS

Feature

EU and Mercosur wrangle over climate pledges

Concern about backdoor sanctions

Greens demand sanction mechanisms

Interest in reaching an agreement

Both sides have geopolitical goals

Gas Deals against Migration: Italy’s Mediterranean strategy

Tough line on migration issue also before Meloni

Deals between energy and migration

Italy also needs migrants

Meloni: ‘Let’s raise the levels of female employment’

Events

News

Again no agreement on joint ammunition procurement

New compromise with new legal issues

Von der Leyen sees need for action on pesticide ban

AI Act: vote postponed until May

Need for discussion about Foundation Models

Ukrainian grain: Commission announces emergency measures

Import volume multiplied

Parliament adopts regulation for deforestation-free supply chains

Commission classifies countries according to deforestation risk

Sustainable economy: EU environment ministers appeal to companies

Mandate on renaturation law in June

Opinion

Scholz – Renewables champion

Global efforts needed

Some countries are moving fast

Renewables: Scholz must step into diplomatic gap

Ambitious diplomatic initiative for renewables needed

Europe.Table Editorial Office

EUROPE.TABLE EDITORS

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