Farmer discontent and the concern of some governments to protect their domestic markets make final ratification in the EU difficult, especially because of objections from countries such as France, Spain and others.
French farmers have resumed protests against the EU-Mercosur free trade agreement. But experts say the increase in controversial imports is modest with enough safeguards to soften the impact.
At the heart of the farmers' protest is an increase in beef imports, as well as poultry and sugar. But experts believe the margins of these imports are modest and not an existential threat. Moreover, as agricultural products produced in the European Union (EU) find millions of new consumers in Mercosur nations, the agricultural sector overall stands to benefit from the agreement.
A so-called Factsheet published by the EU Commission says under the new agreement the EU will import 99,000 tons of beef at lower duties of 7.5%. That is just 1.6% of total beef production in the EU and is less than half of the current imports from Mercosur, which stands at 196,000 tons.
“There is a misconception that the EU-Mercosur agreement is inherently harmful,” said Ignacio Sanchez Recarte, secretary general of wine lobby group CEEV. “We need this agreement, and we will actively advocate for its ratification.”
The EU Commission has protected more than 350 products under "a geographical indication," and trademarked them for European farmers. This ensures there can be no imitation of specific hams, cheeses, wines and other products produced in European regions and seen as delicacies in various Mercosur nations with growing middle classes.
If the trade agreements are concluded, the study said, the value of EU agri-food exports would be between €3.1 billion ($3.26 billion) and €4.4 billion higher in 2032 than they would have been without these 10 trade agreements.
The agreement is strongly supported by Germany and Spain, who see export opportunities and stronger diplomatic links.
The German chancellor, Olaf Scholz, tweeted that an important obstacle had been overcome: “This will create a free market for more than 700 million people along with more growth and competitiveness.”. Spain’s prime minister, Pedro Sánchez, said the agreement would “establish an unprecedented economic bridge between Europe and Latin America”. The agreement marks a personal victory for Brazil’s president, Luiz Inácio Lula da Silva, who had pushed hard for the deal.
EU officials said they had made significant improvements to the 2019 text: the agreement can now be suspended if countries fail to abide by their promises under the Paris climate treaty. The trade deal “respects Mercosur’s extraordinary and fragile natural heritage”, von der Leyen said.
The commission, which has the power to negotiate trade deals on behalf of the EU, has been in despair that the Mercosur agreement could fail. Officials fear that the EU would lose influence and credibility in South America, as China rapidly increases its investments on the continent.
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