The future of the trade deal between the EU and South America’s Mercosur bloc has been further thrown into doubt as Austria is expected to veto the pact over concerns about Amazon fires and threats to the national farming sector.
Lawmakers on the Austrian parliament’s EU subcommittee on Wednesday almost unanimously voted to reject the draft free trade agreement, thus obliging their government to veto the pact at EU level, where all 28 member states and their parliaments must agree to trade deals.
The draft for a trade agreement between the EU and Mercosur, a free-trade zone that includes Brazil, Uruguay, Paraguay and Argentina, was announced last June after almost a decade of negotiations.
But last month France and Ireland threatened not to ratify the deal unless Brazil’s president, Jair Bolsonaro, agreed to do more to fight fires in the Amazon.
Concerns about adverse effects on the European product standards and farming sector also played a part in the debate in the Austrian parliament. “The agreement would have been bad for our agriculture, but especially bad for climate protection and workers’ rights in South America,” said Jörg Leichtfried, deputy leader of the centre-left SPÖ.
Importers of EU goods in the Mercosur zone currently have to pay tariffs of 35% on cars, 14-20% on machinery and 27% on wine, which would be gradually phased out if a trade deal came to pass.
To some surprise, lawmakers from the centre-right ÖVP and the far-right Freedom Party also voted to reject the deal, with the FPÖ leader, Norbert Hofer, arguing politics should not “bend to the interests of industry”.
Austria is currently governed by a caretaker government made of technocrats following the collapse of chancellor Sebastian Kurz’s cabinet over the so-called “Ibiza scandal”, in which a sting video showed his deputy, Hans-Christian Strache, suggesting he could offer lucrative public contracts in exchange for campaign support.
The government heads to the polls on 29 September.