Frustration over EU trade deal with South America

After 20 years of negotiations, an agreement was reached on 28 June on the trade agreement between the European Union and Mercosur. While in the South American countries (Brazil, Argentina, Uruguay and Paraguay) the deal is received with loud applause, in the EU not everyone is happy. The issue is sensitive in the meat sector, among others.

For example, the European poultry organization Avec is very concerned about the consequences of the Mercosur Trade Agreement† The treaty stipulates that the Mercosur countries will soon be allowed to export 180.000 tons of poultry meat to the EU. 'That is twice as much as the last proposal from the EU member states at the end of 2017. Nothing justifies an increase of 100%,' says Avec. The Dutch Poultry Processing Industry (Nepluvi) underlines this position.

The organizations feel betrayed by the European Commission closing the Mercosur deal. Avec and Nepluvi are afraid of the uneven playing field that threatens to arise. 'Over the past 20 years, the European poultry sector has made great efforts in the areas of animal welfare, food safety and sustainability. With the Mercosur treaty, those efforts are negated by importing meat with much lower standards from third countries.'

Falling prices and overproduction
The European Milk Board (EMB) is also critical of the trade agreement, which according to the organization is problematic for both the dairy industry and the meat sector. With the agreed beef quota of 99.000 tons for export from South American countries to the EU, meat prices will fall sharply, according to EMB and part of European production is in danger of disappearing.

The organization also warns against a further increase in the current overproduction in the dairy sector. The high soy imports are partly to blame for this. The planned cut in export tariffs for Mercosur will strengthen that process. Sieta van Keimpema, vice president of EMB, also expresses her fear of an uneven playing field. “The agricultural products that are now entering Europe in even greater numbers have different (production) standards.”

Not all details known yet
LTO Netherlands late in a reaction on the trade deal that not all details about the agreement are known yet. Only when the texts have been published do the EU Member States and the European Parliament debate and vote on them.

The entry into force of the trade agreement could take several years. From that moment on, a transition period of 5 to 9 years applies to most products with agreed quotas. EU Commissioner Phil Hogan has announced that there will be a €1 billion bailout fund for sectors affected by the deal, according to LTO. Further details are still missing.

Copa-Cogeca objects
LTO emphasizes that it is in favor of fair and fair trade agreements, with equal standards within and outside Europe and adequate protection of sectors that are vulnerable at cost. Copa-Cogeca, the European umbrella organization for representatives of the agricultural sector, objects, partly on behalf of LTO, to the great haste with which the European Commission and the Mercosur countries have concluded the deal.

Jeanette Pennings

Jeannet has her roots in the flower bulb sector and she grew up on an agricultural company in the northern part of North Holland. As a generalist she reports for Boerenbusiness across all sectors. She is also exploring the possibilities of sponsored advertising.

j.pennings@boerenbusiness. Nl

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