(Bloomberg) -- Terms of Trade is a daily newsletter that untangles a world embroiled in trade wars. Sign up here.
A key committee in Austria's parliament rejected a draft free-trade pact between the European Union and a South American customs union over concerns about fires in the Amazon, the latest sign of resistance to the agreement reached in June.
In a decision that's binding for the government, almost all parties on the parliament's EU subcommittee voted against the deal with the Mercosur trade bloc -- comprising Brazil, Argentina, Uruguay and Paraguay.
“The rain forest is burnt down in South America to create grazing land to then export discount beef to Europe,” Elisabeth Koestinger, a former agriculture minister of the conservative People's Party, said in a statement after Wednesday's vote. “The EU mustn't reward that with a trade agreement.”
Read more: EU, South America Achieve Breakthrough in Free-Trade Talks
European opposition to the pact has surged over fires in the Amazon rain forest. French President Emmanuel Macron branded Brazil's president a liar before the Group of Seven meeting last month and threatened to block the deal. Irish lawmakers in July expressed opposition over concerns about its impact on local farmers.
Austria is currently ruled by a technocrat administration pending snap elections on Sept. 29. The country's parliament could still move to reverse the decision later, and the text of the draft agreement isn't expected to be ready until at least next year.
Mercosur Reaction
Officials in Argentina and Brazil downplayed the significance of the vote. In Buenos Aires a person familiar with the government's thinking but who was not authorized to speak on the record pointed out that European Union member states had questioned the bloc's recent trade deal with Canada, but that opposition was eventually overcome.
In Brasilia a senior government official who also declined to be named said that as the EU-Mercosur agreement has yet to be signed, any decision now has no real effect.
--With assistance from Jorgelina do Rosario and Samy Adghirni.
To contact the reporter on this story: Boris Groendahl in Vienna at bgroendahl@bloomberg.net
To contact the editors responsible for this story: Chad Thomas at cthomas16@bloomberg.net, Chris Reiter
©2019 Bloomberg L.P.
Essential Business Intelligence, Continuous LIVE TV, Sharp Market Insights, Practical Personal Finance Advice and Latest Stories — On NDTV Profit.
