The Brazilian election held on 30th October 2022 was historic in many respects and will have repercussions far beyond the country’s borders. For the EU, Lula’s election is seen as a signal: the EU-Mercosur trade deal can be taken out of the freezer! In fact, the polemic deal signed with the Latin-American trade block in 2019, has not been yet ratified. Four years ago, the European Parliament and several Member States clearly indicated that they could not support this deal due the substantial negative impact on EU agricultural markets and the environment. Will MEPs and Member States suddenly change their opinion depending on the political colour of the newly elected President?
Despite the Council conclusions of 8 May 2018, where Member States asked for Mercosur to remain a mixed agreement, it was reported last month that the European Commission was waiting for the election results to come back with a renewed approach. According to Politico, “To resuscitate the deal, Brussels wants to strip countries of their vetoes and use the EU’s wide- ranging trade powers to ratify the agreement at EU level — which would require majorities in the Council and European Parliament — rather than in the EU’s 27 national parliaments and several regional parliaments. It’s a pathway that is legal, but politically fraught (…).”
The manoeuvring – if later confirmed – is shocking. We understand that with the war in Ukraine, there is an urgent need for the EU to find new trade opportunities and to implement existing agreements. We share that goal. However, by pushing for the ratification of the EU-Mercosur deal, the Commission could further compromise Europe’s farming sustainability. If there was an outright opposition to the agreement in 2019 already, how could the European farming community not be even more opposed to an agreement that disregards the latest developments, namely the Farm-to-Fork Strategy and the consequences of the war in Ukraine on EU farms and agri-cooperatives?
The European Commission will certainly argue that the directive on deforestation affecting imported products, which was passed by the European Parliament in September 2022, strengthens the means of control and the sustainability of the agreement. It would be far from resolving the many problematic points of this agreement when it comes to agriculture. We see at least three issues on which the Commission has failed to provide us with a satisfactory response in the three years since this agreement was signed.
1) An unbalanced agreement, to the detriment of European agriculture
Firstly, despite the access granted to EU products, such as wine, dairy, olive oil, some fruits, vegetables and GI’s, the Mercosur agreement is unbalanced in its agricultural chapter, especially for the already fragile agricultural sectors such as beef, poultry, rice, orange juice, sugar and ethanol. Taking the beef sector as an example, it is easy to understand that this agreement will shift the negotiating power from the hands of European farmers to those of the large operators in the Mercosur countries.
2) Cumulative effects that are unsustainable in the long term
Secondly, European farmers are concerned about the cumulative and difficult to quantify impacts of all the agreements already signed by the EU. This concern has been confirmed by the Commission’s own study on the impact of trade deals on agricultural products! In this context, the agreement between the EU and the Mercosur block could be the last straw that breaks the camel’s back. In the poultry sector, yearly imports from the Mercosur countries (Argentina, Brazil, Paraguay, and Uruguay) will be equivalent to the combined production of Denmark, Finland and Sweden.
3) EU double standards
Back in 2019, this agreement would have made things harder for EU farmers, by applying a double standard between what is forbidden in the EU and what is tolerated within our imports. The sugar beet sector is a prime example. With this agreement, Europe will import sugar and ethanol that do not meet our production standards in any way. Brazil alone uses 27 herbicides and insecticides that are banned in Europe.
Since the 2019 political agreement, we see a regulatory tsunami unfolding in the EU with the development of the European Green Deal. Dozens of regulatory initiatives impacting agriculture are currently under discussion in Brussels on nature restoration, biodiversity, industrial emissions, the use of plant protection products, animal welfare, etc. On the other hand, the war in Ukraine is profoundly affecting EU food production, causing costs to surge and exceed those of our competitors. This will be particularly visible in the fertiliser and energy markets. The EU has not yet incorporated into the Green Deal discussions the impact of the Russian aggression on EU agriculture, and we strongly denounce it. Being less affected by the consequences of the conflict in Ukraine, the Mercosur countries will see their competitiveness strengthened.
Against this backdrop, the implementation of the Green Deal will further increase the gap in standards applied to the EU and Mercosur farmers. This wide gap is untenable for European producers, and the Mercosur agreement will only exacerbate this problem as this agreement was designed many years before the launch of Farm to Fork and the war in Ukraine. It would therefore be both anachronistic and detrimental; thus we firmly denounce it.
To put it plain and simple in black and white: any attempt by the Commission to force the passage of this agreement would be truly scandalous and set a dangerous precedent for EU farming.
Christiane Lambert, President of Copa
Artigo publicado originalmente em Copa Cogeca.
