Is EU-Mercosur deal hijacked by premature criticism?

Almost a month ago, the European Commission signed a free trade agreement with the South American trade alliance Mercosur. Since then, the agreement has provoked criticism from farmers, environmentalists, national politicians and MEPs. EURACTIV Germany reports.

No punches were pulled in the first debate about the Mercosur agreement between MEPs of the Agriculture Committee and Agriculture Commissioner Phil Hogan.

“It is worse than we feared,” said German Green MEP Martin Häusling. “This is an agreement that is dangerous for our farmers,” said French MEP Gilles Breton of the right-wing nationalist party Rassemblement National.

Almost all party families have expressed resentment, from moderates to nationalists. However, the free trade agreement is far from being in force.

The so-called “agreement in principle” was adopted at the end of June. Now lawyers from the EU and the Mercosur bloc – Argentina, Brazil, Paraguay and Uruguay – are examining the text of the agreement.

The agreement will then be translated into all official EU languages and this process will take up to three years. Only then can the agreement be adopted by governments and parliaments, which could, again, take years.

Agriculture and agricultural policy-makers concerned

The Mercosur deal provides for a partial liberalisation of agricultural trade. For some products, such as beef, chicken or sugar, trade quotas have been established to prevent over-importation and price erosion.

However, for some critics, this is not enough as they say the quotas are too high. EU negotiators have made far greater concessions in terms of the agricultural sector compared to other industries like the car industry.

“The European beef market will be down in a few years,” said Green MEP Martin Häusling. In recent weeks, French and Irish farmers have protested against the deal.

National politicians were disappointed by the negotiated text of the free trade agreement. French Minister of Agriculture and Food, Didier Guillaume, said he did not want “an agreement at any price”.

According to conservative MEP and chairman of the Parliament’s agricultural committee Norbert Lins (CDU), the criticism is justified and he wants the European Commission to disclose more information.

The German MEP is calling for a “detailed discussion” and would like the Commission to confirm, for example, what would happen if market distortions were to occur despite quota regulations.

Criticism of free trade agreement is ‘normal’

Despite extensive criticism, Judy Dempsey, a political analyst at the think tank Carnegie Europe, does not consider the agreement is in peril.

“Every trade deal runs into controversy with some of the EU member states. I saw this with the South Korea deal and the Japan deal,” Dempsey said. When it comes to national interests, this is normal as the positive aspects of these free trade agreements would override the negative ones.

“Trade is no longer just about commas, and you import this, and we export that,” Dempsey said. Trade agreements can introduce standards, rules and accountability mechanisms. According to Dempsey, this could also prove helpful in defeating the criticism about environmental protection.

According to conservationists, the rising demand for South American agricultural products could accelerate the Amazon region’s deforestation – a claim the European Commission disagrees with.

Through the Free Trade Agreement, Mercosur states have committed to complying with the Paris climate agreement, which provides for massive reforestation in the Amazon region, among other areas.

However, it remains unclear how this would, for example, be reinforced from a legal standpoint. Especially against Brazilian President Jair Bolsonaro, who stated he would sharply increase deforestation.

For Judy Dempsey, a potential mechanism for exerting pressure on environmental issues is better than none. “Maybe we could have some influence over, especially, the deforestation of the rain forest,” said Dempsey.

According to Dempsey, the agreement is, therefore, in the interests of both European and South American environmentalists.

Trump, Brexit and Irish cattle

Another reason why the EU-Mercosur agreement has not been rejected so quickly is not because of South America but North America, according to Dempsey.

Since Donald Trump became US President, “the importance of these treaties between the EU and third countries has become much more important for the EU’s political influence.” This is because Trump rejects multilateral trade agreements and prefers bilateral ones.

The talks on a trade agreement concerning the elimination of tariffs on industrial …

Even with the UK leaving the EU soon, the EU would not run off its course, according to Dempsey. “Brexit or no Brexit, the EU will continue with its trade relations. There is absolutely no doubt about this,” she added.

However, Brexit could delay the implementation of the Mercosur Agreement, according to MEP Norbert Lins.

Without Brexit, the agreement could be adopted at the earliest in 2022. After that, the Treaty provides for a transitional period of six years after which the agreed quotas will take effect.

If the British leave, it could all be postponed.

To explain why, Lins gave an example from the agricultural sector. The EU-Mercosur deal, he said, would have to wait if Irish cattle farmers were to export significantly less to the UK after Brexit and beef imports from Mercosur states were to increase massively.

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