April 23, 2024

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Why do farmers and greens oppose the trade agreement with South America?

Why do farmers and greens oppose the trade agreement with South America?

Farmers and greens are calling on Europe to tear up its future trade deal with South America. The (stalled) conversations must stop forever. Why?

Jeroen van Horenbeek

June 1999. In Rio de Janeiro, leaders of European and South American countries shake hands. Talks on a trade agreement between the EU and Mercosur (the customs union of Argentina, Brazil, Paraguay and Uruguay) could officially begin. The goal is to decline by 2005.

December 2023. After more than twenty years, the time has finally come: Valdis Dombrovskis, Latvia's European Trade Commissioner, is ready to travel to Rio de Janeiro to officially sign the long-awaited trade agreement with Mercosur. Apparently, because French President Emmanuel Macron at the last minute put the future deal on hold in front of TV cameras.

“This is a twenty-year-old agreement. We tried to improve the text, but we were unable to do so,” Macron said. “I cannot, on the one hand, ask French farmers and industrialists to adhere to climate rules and, on the other hand, allow imports from countries to which they do not apply.” These climate rules.

Dombrovskis has no choice but to listen to Paris. He stays home. Signing, which already moves to Sint-Gothémes.

Amazon

Everyone seems to agree on one thing: the trade agreement before us today is not perfect. far from. On the European side, there are particular doubts about the consequences for agriculture and climate. Farmers fear the huge import of cheap meat from South America. The green movement warns that the deal will accelerate deforestation in the Amazon, the use of pesticides, and the displacement of indigenous groups.

Farmers on the South American side believe that this deal is unbalanced because their (meat) exports to Europe are still very limited. This feeling has been around for some time, especially in the steak country of Argentina. There is also the fear that our industry will soon be destroyed by giant European companies like Germany. Former Argentine President Alberto Fernandez, among others, no longer supports the deal.

The question now is whether the diplomatic tango with South America should be stopped forever or not. If it depends on the farmers, yes. They complain of low prices and unfair competition from their international colleagues. According to the General Union of Peasants, “the annual import of 99,000 tons of beef, 100,000 tons of chicken meat, and 180,000 tons of sugar will put unacceptable pressure on European markets.”

Gruen wants to make the talks with Mercosur a government matter. Co-chair Jeremy Vanneckhout calls on Belgium to adhere to the trade agreement “in its current form” at the European level.

Farmers protest in Brussels on Monday.  Photo by Stefan Timmerman

Farmers protest in Brussels on Monday.Photo by Stefan Timmerman

China

In Europe, trade agreements have gained a bad reputation in recent years. Let us remember the fierce Walloon resistance to CETA, the trade agreement between the European Union and Canada in 2016. But there are also specialists who are in favor of simply throwing away twenty years of negotiating work with South America.

There is the classic economic argument. Together, the EU and Mercosur represent a tenth of the world's population and a fifth of the global economy. A country like Belgium, for example, lives off its exports. You can earn a lot of money in Argentina and Brazil. Today, with all kinds of high import tariffs, the EU exports €45 billion worth to Mercosur every year.

Belgium exports 4 billion euros to the countries concerned. First of all to Brazil.

But there is also the strategic argument. “Strengthening our ties with the Mercosur countries makes a lot of sense to reduce our dependence on China,” Agatha Demarais, a researcher at the European Foreign Policy Council, a think tank, wrote in a recent op-ed. Conversely, further postponement of the signing will bring South America closer to China's sphere of influence. Forever.”

For example, Brazil has more than 20% of the world's reserves of graphite, nickel, manganese and rare earth minerals. Crucial raw materials for the green transition that Europe wants to achieve. Argentina has the third largest lithium reserve in the world. This “white gold” is essential for building electric cars.

“What is particularly bothering farmers is that Europe seems to be opening its doors a little more to imports from foreign competitors who do not have to adhere to the same rules,” says Ferdi de Ville, professor of European trade policy (UGent). “CETA is an example of that, but there's also been an agreement recently with New Zealand, which is a strong dairy player. Admittedly, there are difficult conversations going on with Australia.”

The farmer's bucket seems to be filling drop by drop. And also because Europe has been defending its protectionist agricultural policy against countries like Argentina since time immemorial on the same world stage – in the World Trade Organization.

I am waiting

What should happen next? Politically, the trade agreement with Mercosur has been off the table for some time after Macron objected. At least until after the European elections in the summer. Maybe forever.

Both Prime Minister Alexander De Croo (Open Vld) and Flemish Prime Minister Jan Jambon (N-VA) were appeased. It is said that Europe is aware of our country's objections to the trade agreement. This relates, for example, to unequal opportunities for farmers. Now it remains to be seen whether an agreement will be reached on the final text. After that, Member States still have to express their opinion.

Given French resistance, this approval may become a problem.

null Photo by Stefan Timmermann

Photo by Stefan Timmerman

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