Days after European Commission President Ursula von der Leyen signed a long-pending trade deal with four Latin American countries, French farmers are back on the streets dumping manure. This time they parked the tractors near the tunnel in Calais which passes through the English Channel.
Sophie Primas, France’s trade minister, said the deal with the Mercosur bloc – which includes Argentina, Brazil, Paraguay and Uruguay – “is committed only to the Commission, not to the member states,” indicating that France would ratify the agreement. Will oppose.
At the heart of the farmers’ protest is an increase in imports of beef as well as poultry and sugar. But experts believe that the margins of these imports are marginal and do not pose an existential threat.
Furthermore, as agricultural products produced in the European Union (EU) find millions of new consumers in Mercosur countries, the agricultural sector as a whole will benefit from the agreement.
Slight increase in imports of beef, poultry and sugar
a so-called Factsheet published by the European Union Commission Under the new deal the EU will import 99,000 tonnes of beef at a reduced duty of 7.5%. This accounts for only 1.6% of total beef production in the EU and less than half of current imports from Mercosur, which amount to 196,000 tonnes.
For poultry and sugar, import volumes are 1.4% and 1.2%, and for rice it is even less.
Brazilian trade economist Bruno Capuzzi, currently on a fellowship at the European University Institute, told DW that the increase in beef imports represents only one and a half burgers for every consumer in the union.
Other experts also say the 99,000 tonnes will not necessarily give rise to additional demand and will mostly replace a portion of existing imports from Mercosur but at cheaper rates. Mercosur beef exporters pay an average of 40% duty on current exports.
“The hope is that rather than causing an outright increase in imports, one effect of the new quota will be to replace some of the imports that were already happening,” said Christopher Hagedorn, assistant professor of global food politics in the sciences. Poe, Paris.
EU establishes various safeguards
In a report in February the EU acknowledged there would be some impact on producers of beef, poultry and sugar and that regional adjustments would be needed. In year-long negotiations, however, the EU succeeded in establishing various safeguards to minimize the impact, experts told DW.
Firstly, the increased but not fixed quota of 99,000 tonnes of beef is arriving duty-free and secondly, the EU’s higher health standards are expected to prevent over-supply.
“Only 20% of slaughterhouses in Brazil are authorized to export to the EU because it requires individual certification,” Capuzzi told DW.
As she signed the agreement, von der Leyen said that high health and food standards in the union “remain untouchable.”
Third, the deal is expected to be phased in over five years to give beef producers in the EU time to adapt.
“It is assumed that there will be financial resources to help affected farmers deal with any disruption,” Hagedorn told DW. “But it will likely come to council as the agreement comes up for ratification.”
In addition, 99,000 tons will be divided among the four Mercosur nations, each of which will handle a relatively small share of the trade in the commodity that has sufficient quantities to supply.
Experts believe the overall benefits of the deal far outweigh the adjustments and even the agriculture sector will benefit.
EU to remain biggest exporter despite Mercosur deal
The EU Commission has protected more than 350 products under “Geographical Indication” and trademarked them for European farmers. This ensures that the distinctive hams, cheeses and wines produced in European regions cannot be copied and are seen as delicacies in various Mercosur countries with growing middle classes.
A recent E.U. The study on the impact of ten Mercosur-related free trade agreements (FTAs) concluded that the EU agri-food sector, “particularly the dairy, pigmeat, processed food and beverages sectors”, would benefit.
If trade agreements are concluded, the study said, the value of EU agri-food exports in 2032 would be between €3.1 billion ($3.26 billion) and €4.4 billion higher than it would have been without these ten trade agreements.
The value of EU imports will also increase and is expected to exceed €3.1 billion to €4.1 billion in 2032.
While the report also acknowledged the insecurities of beef, poultry, rice and sugar, it said beef exports from the EU would also increase, amounting to “net exports of more than 350,000 tonnes”.
“Even if the Mercosur trade agreement is ratified, the EU will remain the largest exporter of agricultural exports in the world,” Capuzzi said. “And is still a net exporter of beef.”
Do the benefits outweigh the costs?
The EU has said that rather than being detrimental to farmers, the development of new markets through preferential trade relations would strengthen the EU’s position as the world’s top exporter of agri-food products.
As Donald Trump returns to the White House in the middle of next month, and the threat of tariffs on European goods looms, some say FTAs are necessary to expand the bloc’s consumer base elsewhere. He believes the impact on beef, poultry and sugar will be minor and could be mitigated with state support.
“The overall EU-MERCOSUR deal goes far beyond beef and agriculture, spanning all industrial sectors and services – from A to Z, meat to medicines, vehicles to chemicals,” Hagedorn said.
“Those looking at the interest of the EU bloc as a whole are optimistic about its expected positive impacts, not only in terms of domestic economic benefits and expansion of consumer choice, but also offering a counterbalance to China and the US. Including for geopolitical reasons.”
Edited by: Uwe Hessler