The reduction of tariffs and the wide opening of markets in Latin American countries have led to a concentration of economies on the export of goods in demand abroad. In most countries, this meant an expansion of the agricultural sector, more mining and the loss of jobs in the manufacturing industry. As the chart below shows, the Latin American countries that have concluded an agreement with the EU export to the EU, except for Mexico and parts of Costa Rica, mainly primary raw materials and agricultural goods, with serious consequences for their ecosystems, the health and food sovereignty of the local people and conflicts over land. Diversification, and above all the export of products with a higher added value, has not taken place. Trade with the four Mercosur countries, with which there is not yet an active trade agreement, is also based on more than 80 countries.% the exchange of agricultural goods and raw materials. This trend is likely to deepen if the agreement enters into force.

Meanwhile, the EU exports mainly industrial goods with a high added value to these countries. Such were e.g. 2023 on 88% Total European imports to Peru Industrial goods, for Ecuador 78%, Chile 87% and also Mercosur imported to almost 83% Processed goods (manufactures) from the EU. This in turn means that these countries have a sometimes drastic trade deficit with the EU, i.e. a strong imbalance in mutual trade. This unbalanced trade deepens Latin American countries' dependence on EU industrial imports and their external debt. 

The consequences of the trade agreement with the EU is the subject of a study by the Colombian Ministry of Economy, Industry and Tourism  together as follows. 

• The agreement has not changed the export structure to the EU. It is still based on agricultural goods and raw materials, including oil and coal.
• The agreement itself had no significant impact on the increase or reduction of trade and on the creation of jobs. 
• Colombia has lost competitiveness after the entry into force of the agreement, especially in some key areas, including the production of machines and optical instruments, which have been virtually displaced from the market. 

Either way, the same applies to the other Latin American countries that have concluded a trade agreement with the EU.

The signing of trade agreements is regularly linked by politicians to the argument that they would contribute to job creation. In fact, they can do just the opposite. This is, for example, the case with EU-Mercosur Agreement to fear. The Mercosur area is still high tariffs on the import of various industrial goods, such as cars (up to 35%), auto parts (up to 18%) and textiles (up to 26%). On the one hand, the countries protect their own industries. On the other hand, this has led international corporations to set up production facilities in the countries and create relatively well-paid jobs subject to social security contributions. loud Sustainability impact assessment (Sustainable Impact Assessment, SIA) of the European Commission (2020), six of Argentina's ten car factories were operated by European companies in 2016: Volkswagen, Renault, Peugeot-Citroen, FCA, Mercedes-Benz and Iveco. A similar picture is emerging for Brazil. If tariffs are dropped, the incentive to produce in countries with comparatively high wages is no longer attractive. This is also the conclusion reached by the SIA, which expects massive job losses in the car sector in all four Mercosur countries. In Brazil alone, it expects more than 20,000 fewer jobs, in Uruguay from a decline of more than 11%. And this is only one of the industrial sectors for which the SIA calculates some drastic losses. Jobs in the production of machinery and chemical and pharmaceutical products would also be affected.

These jobs will not automatically be gained in the EU. They are relocated, but in countries with lower labour standards and lower wages. This is what Mexico A good example.

Already with the entry into force of the North American Free Trade Agreement (NAFTA) between Canada, the USA and Mexico in 1994, numerous factories were established that produced for the US market and benefited from Mexico's low wage costs and environmental requirements as well as the now lifted tariffs. The EU-Mexico trade agreement has tightened the Continued trend. Between 1999 and 2023 the production of cars and car parts in Mexico has almost tripled, with 80% Production is exported to the United States. The trade agreements were decisive, as these factories, also known as ‘maquilas’, are responsible for the composition of cars (and other goods), importing the necessary inputs duty-free and then exporting the final products duty-free. The Average hourly wage in a Mexican car factory is 2.3 US dollars and thus still below the Chinese workers, and 90% of the American workers. Volkswagen is one of the five largest car producers in Mexico, and BMW, Audi and Mercedes Benz also maintain large production facilities in the country – and want to expand them. Volkswagen announced as part of its “Future Plan” in December 2024 to cut 35,000 jobs in Germany by 2030. Some of it will be moved to the Mexican production facilities of the car group in Puebla. This "future plan" is intended to save 1.5 billion euros in wage costs. The same experience was experienced by workers of a Audiwerks in Brussels, which closed its doors in February 2025, after 75 years. A total of 5,000 workers lost their jobs. The company announced that it would relocate its production to China and Mexico. These are just two of the most recent examples of how the structures that create trade agreements also have a long-term impact on industrial jobs in the EU. And although this in turn means more jobs for Mexico, the construction of huge industrial corridors, whose factories serve production for the world market, has a massive impact on the environment and the health of local people (see box). In this respect, trade agreements mean a loose-lose situation for workers on both sides of the Atlantic. The winners are international corporations such as Volkswagen and Co.

A key element of trade agreements between the EU and Latin American countries is the fullest possible duty-free trade in agricultural products, processed food and pesticides, i.e. agricultural chemicals. As a result, trade agreements exacerbated existing problems in Latin American agriculture.

Since the entry into force of Trade agreement with the Andean countries There has been a massive increase in imports of agricultural products associated with deforestation. For example, palm oil from Colombia, its acreage between 2012 and 2022 by almost 50% have increased. During the same period, the export volumes of palm oil to the EU increased fivefold (until 2019), while around 10,000 hectares of forest per year fell victim to the expansion of palm oil plantations in Colombia (2013-2018).

One Study by OurWorldinData According to the report, the deforestation of tropical forests in Latin America is over 70 years old.% is due to the production of agricultural goods intended for export (and mining). An interactive map of Global Forest Watch provides a good overview of deforestation in individual Latin American countries, which is constantly high. In all Latin American countries that have a trade agreement with the EU, the original forest stock has decreased since the entry into force of the agreement. With one of the countries most affected by deforestation for the production of so-called cash crops, i.e. agricultural products produced for export and livestock farming, the European Commission plans to sign a trade agreement shortly: Brazil. One Study by Canopée (2025) assumes that the increased quotas for beef, agricultural ethanol (from cane sugar) as well as lower tariffs on other agricultural products and the drastic reduction of export taxes on soya in Argentina could lead to the deforestation of 700,000 hectares of forest in Mercosur. That's 66 times the area of Paris. However, according to Canopée, this number would continue to grow over the time and application of the agreement, as farmers have to switch to ever-new fertile soils due to the deterioration of soils caused by intensive livestock farming and monocultures.

In fact, it is EU's second largest importer products derived from deforestation. This concerns about 15% all EU imports, in particular cocoa, soybeans, palm oil, coffee and beef. Most of them come from countries in Latin America, with Brazil, Argentina and Paraguay, the Main countries of origin These goods are. In the EU, Germany, Italy, Spain, France and the Netherlands have the largest ‘deforestation footprint’. In order to address this problem, the European Institutions already launched in June 2023: the European Deforestation Regulation (Regulation on deforestation-free products, EUDR) It has been under heavy fire ever since. For example, its full application was postponed by one year to December 2025. However, even if the EUDR were to be fully implemented, it is not sufficient to prevent deforestation for agricultural production, as it is important to Biome and products not included. It would therefore make much more sense to exclude such goods directly from tariff reductions and to reduce consumption in the European Union at the same time, or to replace them with less problematic products. Countries should also be helped to diversify their product range and industrialise. However, trade agreements with the EU do not do all of this. Instead, they increase the dependence of Latin American countries on precisely this agricultural production model.

In no other World region Arable land is as unevenly distributed as in Latin America. More than 75% the utilised agricultural area is in the hands of 10% the largest landowners, while the bottom 50% Just 2% own. This has a significant impact on the work of small farms and on food sovereignty, i.e. the ability of a country to provide itself with good food without relying on imports from abroad. In addition, food is becoming more and more expensive in Latin America, as a study of the Rosa Luxemburg Foundation (2022) shows.

In Chile For example, between 2014 and 2018, the number of people who were unable to provide themselves with sufficient food rose by 10 per cent.% to 20% doubled. Before that, they took Dependence on the import of agricultural products for national consumption. Between 2012 and 2020 alone, it increased by 38 percent.%. A tendency that in turn goes hand in hand with the decrease in the own production of food. Between 1997 and 2020, the area under cultivation of legumes and root vegetables fell by almost two thirds, the area under cultivation of cereals by one third and the area under cultivation of vegetables by one quarter. One Oxfam report (2016) Shows how unequally distributed the country is in Chile: 75% The land used for agriculture is in the hands of 1% the largest farms, while the remaining 99% Manage the remaining quarter. As a result, Chile has Net exporter agricultural products, but the population is increasingly less able to supply itself with sufficient food. The trade agreement with the EU also reinforces this vicious circle. This 2024 “modernised” interim trade agreements EU-Chile cuts tariffs on almost all agricultural products, making trade even more lucrative. By 2023, more than one Third of all Chilean exports to the EU agricultural products (including fish) (see graph 2). More than half of them are nuts and fruits, including Chile's export hit, the avocado. Chile is the EU's third largest avocado supplier, to Colombia and Peru. In all three countries, the export of avocados to the EU has increased massively since the entry into force of the trade agreement, with negative consequences for the environment, access to water and the health of the local population.

However, trade in agricultural products is not a one-way street. The EU also wants to open up new markets for European food; In the dairy sector in particular, but also in the case of processed products such as olive oil and wine, it is pushing for the Latin American markets to be fully opened up, even though they are already sufficiently produced in the countries or region. As a result, competition between farmers from different regions of the world is also increasing.

In order to counter these developments, an alternative La Via Campesina, the largest association of smallholder farmers in the world, “Dedicated to the tremendous task of developing a global framework for trade between countries, based on the principles of food sovereignty, solidarity, cooperation and internationalism, where land, water, seeds and territories are not mere commodities.”

Trade agreements make not only agricultural products cheaper and more attractive to trade, but also those intended for the cultivation of these same products: Pesticides, also known by industry as ‘plant protection products’.

European countries account for a third of All pesticide exports responsible worldwide. According to one Report by Public Eye (2020) more than 80,000 tonnes of non-approved pesticides were also exported from the EU (including the UK). Three quarters of these are in low- and middle-income countries, including almost all Latin American countries. A practice that will continue in 2025 persists – with devastating consequences for the environment and local people. In Brazil alone, there were Over 4,300 pesticide poisonings in 2009 and 2019 registered per year, with one up to 50% Higher levels of obscurity are expected. In addition, miscarriages and children born with malformations or developing chronic diseases are many times higher than average in communities near fields sprayed with pesticides from the air (a practice banned in the EU), such as: Investigations from Argentina show.

Export of non-authorised pesticides in the EU 2018, in tonnes

Source: Public eye, 2020

Also Countries of Central America They are among the recipients of these highly toxic substances, even though their national laws prohibit such an import. This was referred to by one Study by CIEL (2023), which also showed that this trade is both against the Basel Convention, which aims to protect people and the environment from highly toxic waste (including pesticides), as well as violates international human rights law. It is interesting to note that compliance with and implementation of the Basel Convention Trade and sustainable development chapter the EU-Central America trade agreement. The same applies to the Trade agreement with Mexico, Where, among other things, the German Chemical giants Bayer and BASF sell highly harmful pesticides They deserve a golden nose. This confirms what civil society organisations have long criticised: The sustainability chapters in the European trade agreements are no more than a fig leaf, behind which environmentally and health-damaging trade is actively pursued.

More on this topic in our Study: “Environmental protection in EU sustainability chapters” and in Guide to the EU-Mexico trade agreement: EU-Mexico – All power to...? Investors! As well as in our podcast: The EU-Mexico trade agreement – all power to...? Investors!

In many Latin American countries, the use of pesticides has increased massively over the past two decades. 

This increase is directly linked to their concentration on the large-scale cultivation of agricultural products for export. Monocultures are much more susceptible to pest infestation than biodiverse growing areas. While the European Commission under the Farm to Fork Strategy: Minimise pesticide use by half by 2030, To promote organic agriculture and protect biodiversity, it promotes the exact opposite with its trade agreements. Tariffs on pesticides will be massively reduced or completely abolished, which will boost trade in these products. With the entry into force of EU-Mercosur trade agreement for the import of pesticides into Brazil and Co. instead of the current up to 18% Tariffs no longer apply, even to those banned in the EU due to their risk to human health and the environment.

Accordingly, the Chairman of the German Chemical Industry Association Wolfgang Große Entrup concluded the negotiations on the agreement in December 2024 with the following words: “Finally! In difficult economic and political times, European industry is waiting for positive signals. Today's agreement is an important step towards more growth and a strong position for the EU as a sovereign global player.”

The consequences of trade agreements with Latin America confirm this statement. But the environmental damage does not stop with the agricultural monocultures, the cultivation of cash crops and the huge, export-oriented industrial corridors.

Here are two more examples:

Nevertheless, the EU sees itself as a pioneer for climate- and environmentally friendly trade that protects human rights. And for the following reasons, among others:

While the European Commission hides the environmental impact of its trade agreements behind fig leaves, it is expanding the power of international companies. They can use a group action mechanism to refer states to an exclusive arbitral tribunal if their climate and environmental protection measures affect their business.

The European Union's current trade policy with Latin American countries is a prime example of unfair trade. Because...

1. ...it is geared towards the interests of globally active companies and strengthens their influence.
2. ...provisions on environmental, climate and human rights protection as well as labour standards are neglected, while market access interests of corporations are fully taken into account.
3. Instead of helping the former colonies of Latin America to overcome historical dependencies, they are reinforcing them. The international division of labour, in which the countries of Latin America are degraded to the role of suppliers of raw materials, is perpetuated by this trade policy.

But as it is, it doesn't have to stay! Although the calls for new trade agreements are growing louder in the turbulent times under an erratic US President Trump, the answer cannot and must not be the continuation of an unjust and harmful trade model.

Trade can lead to prosperity worldwide. For this, it must be meaningful, in solidarity, democratic and respectful of planetary boundaries. That's why...

1. All existing EU trade and investment agreements would have to be terminated and negotiated on the basis of a new mandate. Guidelines for such negotiations were adopted more than ten years ago. the Seattle2Brussels Network The European Trade Justice Coalition.
2. ...all relevant stakeholders, including trade unions, small farmers’ associations, environmental and human rights organisations, should be involved in the negotiation of relevant agreements – not only after they have been concluded, but from the outset.
3. ...exclusive corporate litigation rights must be abolished.
4. ...export must be limited primarily to products that are actually needed in the respective importing regions. Trade in agricultural goods in particular must be kept to a minimum in order not to endanger local producers. Instead, initiatives for agro-ecological agriculture need to be strengthened.
5. ...the trade in fossil and climate-damaging goods should not be further promoted, but stopped.
6. ...the circular economy needs to be strengthened in all areas. In principle, the principle must be ‘repair, reuse, recycle’.
7. ...the production of export goods must take place under the highest environmental and human rights standards. European directives that point in this direction, such as the European Deforestation Regulation and this German Supply Chain Act and the European Supply Chain Directive need to be strengthened and effectively implemented and enforced.
8. ...products, such as pesticides, the distribution of which is prohibited in the country of origin due to their harmfulness, must not be traded.
9. ...the development of regional value chains in the countries of Latin America (and other countries of the Global South) would have to be supported, e.g. through technology and knowledge transfer.