Experts explain why European agribusiness is so strongly opposed to the trade agreement between the European Union and Mercosur | National Newspaper

Experts explain why European agribusiness is so strongly opposed to the trade agreement between the European Union and Mercosur | National Newspaper
Experts explain why European agribusiness is so strongly opposed to the trade agreement between the European Union and Mercosur | National Newspaper

Understand why European agribusiness opposes the agreement between the European Union and Mercosur

At least six European countries registered again this Friday (2) protests by farmers demanding greater support from governments for the sector. The epicenter of the protests is France, where pressure on President Emmanuel Macron has been growing day after day. In particular, because of the trade agreement between the European Union and Mercosur.

Belgium’s border with the Netherlands blocked. Acts in Ireland, Greece and Malta. In France, the paths – as well as dialogue – only opened after the president Emmanuel Macron gave in to pressure from farmers and, more than once this week, presented negotiations for an agreement between the European Union and Mercosur as closed.

What we see are actors of a trade dispute. On the one hand, Mercosur countries, with a large agribusiness as the protagonist: Brazil. On the other, farmers opposed to the bloc’s agreement with the European Union. With the group of environmentalists as allies, in a scene that is, if not unprecedented, at least rare.

Pedro Brites, professor of International Relations at FGV, explains how internal pressures brought together groups that are often on opposite sides.

“You have domestic pressure from each of these countries, and France has already shown signs that it will not give up on this domestic popular support. Furthermore, as this environmental issue was also linked to the discussions of the agreement, environmentalists are also on the side side of agricultural producers, which is normally not a common alliance, but in this case, specifically, there is very strong opposition to the agreement”, says the professor.

French producers argue that they need to comply with stricter environmental rules than those in Brazil and that a possible agreement would be harmful for both sides. But Laura Antoniazi, researcher and agribusiness specialist, says that the Europeans’ arguments are fragile.

“Environmentalists argue that this agreement could further encourage deforestation, mainly in Brazil, due to the advance of the agricultural frontier. It is an argument that also does not hold water, because there are environmental safeguards in the agreement, Brazil has enough area to expand its production without deforestation”, he ponders.

France is the largest agricultural producer in the European Union and European farmers are historically accustomed to receiving support through subsidies – government money to help sustain production.

Data from the Organization for Cooperation and Development, the OECD, show that the aid that European Union producers receive from the government is equivalent to 15% of the sector’s revenue. In Brazil, it is 3.5%.

In protests in front of the European Parliament, rural producers complain about recent increases in costs – fuel, for example – and oppose some environmental protection rules, which make land more expensive. Pressure on European Union leaders to reduce sector fees and not open ports to foreign markets. According to them, a unfair competition.

The Brazilian Animal Protein Association estimates that producing a chicken in France costs practically twice as much as in Brazil. In pig production, an international comparison showed that Brazil has the lowest production cost of all 15 countries surveyed.

But researcher Laura Antoniazi remembers that the changes, if an agreement is signed, would not be drastic.

“The agreement would not completely open the market so that products from Brazil and Argentina could flood the European market. There would be quotas, this would be a gradual thing. So, it’s not like with the agreement working they would lose the market completely, but there would be greater competition than there is today”, points out Laura.

Negotiations between the two economic blocs began in 1999. In 2019, the countries concluded the commercial part of the text, but, to this day, the agreement remains on paper.

The history of international relations shows that the negotiation of agreements between economic blocs is guided by technical fundamentals, in conversations that can take decades and are interrupted in an instant for political reasons.

The possible threat from Brazil as major global agricultural producerthe year of election to the European Parliament, which leads leaders to actions of great popularity and, in general, the tendency of countries to close themselves in the face of the crisis that began with the pandemic and continues with wars, could lead to a setback in the construction of a Mercosur bridge with the European community, say foreign trade analysts.

“We are in an almost anti-globalization moment, there are also these very strong movements in Europe, mainly more nationalist and anti-globalization, anti-multilateralism. So it is an especially difficult time for agreements and for this hope in commercial cooperation in general”, he says Laura.

Despite this, Brazil continues to gain market share. Which, according to the FGV professor, demonstrates that there is room to seek balance.

“It’s a constant challenge. I think it will always be the search for new markets, and trying to understand which markets have some level of complementarity and the ability to establish agreements that are valid for both parties”, says Pedro Brites.

The article is in Portuguese


Tags: Experts explain European agribusiness strongly opposed trade agreement European Union Mercosur National Newspaper



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