EU trade chief makes case for Mercosur deal

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The European Union's trade chief talked up the benefits of a possible deal with Latin America's Mercosur region on Thursday (8 July), facing down strong opposition from environmentalists, farmers and lawmakers.

Addressing the European Parliament in Strasbourg, Trade Commissioner Karel De Gucht said a free-trade agreement with Mercosur, which groups Brazil, Argentina, Paraguay and Uruguay, would boost EU exports of goods and services and open new public works contracts.

The EU and Mercosur resumed talks in Buenos Aires last week after many years of deadlocked negotiations. The deal will top the agenda at the EU-Brazil summit next week in Brasilia, when European Commission President José Manuel Barroso and Herman Van Rompuy, president of the European Council, will meet Brazilian President Luiz Inácio Lula da Silva.

If an agreement can be reached – and it could take years to negotiate – it would create the world's largest bilateral free-trade zone, encompassing 750 million people and goods valued at 65 billion euros a year.

"The Commission is well aware of the sensitivity of agriculture in these negotiations and will take this element into account when negotiating," De Gucht told lawmakers, referring to the EU executive, which will lead the talks.

De Gucht said there were good early signs that Mercosur would open its markets to European exporters in the "goods, public procurement and services" sectors, and said a deal would boost exports of EU-produced wine, cheese, fruit and vegetables.

That was an attempt to answer concerns among European farmers – a very powerful lobby in the EU – and their many supporters in Parliament that a free-trade deal would hurt EU agriculture, particularly meat and poultry producers.

Beef, pork and poultry products from Mercosur would only be allowed to enter the EU if they complied with stringent legal standards and health and safety checks, De Gucht said.

"Let it be very clear there is no intention to negotiate away our health and safety requirements," he said.

Last week's Mercosur talks were disrupted by EU agriculture ministers, who protested against import restrictions on EU food products imposed by Argentina.

Farmers threatened

Farmers and environmentalists remain unconvinced, and many members of the European Parliament, which has gained extra powers since the passage of the EU's Lisbon Treaty last December and is keen to exercise them, oppose the deal.

"EU farmers and the food sector see it as a disaster for them," said Mairead McGuinness, an Irish member of parliament from the centre-right European People's Party, the largest bloc in parliament.

"There are huge environmental consequences if the deal allows an expansion of beef production in the Mercosur region," McGuinness said. 

"The United States and Japan will not contemplate a trade deal with Mercosur that sacrifices its agriculture sector. It is hard to understand why the EU is prepared to do a deal," she added. 

EU trade negotiators are conscious that a deal with Mercosur would give the 27-nation bloc an edge over the United States, whose attempts to tap Latin America's growing consumer market via a free trade deal have so far been frustrated.

A Mercosur pact would likely benefit agri-food giants with Latin American operations such as Cargill Inc. and Tyson Foods, while hurting small farmers and the environment, Green party lawmaker and activist Jose Bové said.   

(EURACTIV with Reuters.)

British and Irish farmers' associations expressed concern about reopening trade talks with the Mercosur group of South American countries, given the impact it could have on farmers.

Peter Kendall, president of the Britain's National Farmers' Union, said that as part of the Mercosur discussions, the European Commission must recognise the fact that Irish and UK farmers operate to the highest standards of food safety, animal identification and welfare, as well as the environment.

"Beef imports from South America and particularly Brazil fail to meet all EU standards in these areas and the EU cannot allow an erosion of such important standards to European consumers and producers," said Kendall.

Irish Farmers' Association President John Bryan said consumers expect the EU not to accept increased beef imports from Brazil, which come at an unexpectedly high cost in terms of climate change and widespread destruction of the rainforest in the Panthanal and Amazon regions.

The EU and the Mercosur group of South American countries re-launched talks on 17 May aimed at creating the world's largest trading bloc (EURACTIV 18/05/10). Discussions continued in Buenos Aires last week (29 June-2 July).

The two blocs held nearly five years of talks between 1999 and 2004 over establishing a free-trade zone, but failed to reach an agreement partly due to differences over agriculture.

Mercosur - Brazil, Argentina, Paraguay and Uruguay - and the 27-country EU will hold a first round of talks in July.

  • 14 July: EU-Brazil Summit in Brasilia.

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