Is the EU about to abandon the Mercosur free trade deal?

With every passing day, week and month without a decision – or at least some consistent clarity – on the potential shape of the widely-criticised Mercosur free trade deal, it appears quite possible that an agreement may not be reached at all.

That seems to be the emerging sense on where negotiations currently stand, as articulated – to some extent – by European Commissioner for Agriculture and Rural Development, Phil Hogan, and – to a larger extent – by Ireland South Fine Gael MEP, Sean Kelly, at the European People’s Party (EPP) group conference in Valencia, Spain, this week.

Between speculation over the size of the present EU import quota offer on the table – some say 70,000t, others say 99,000t – the recent proposal for delisting of several Brazilian meat and poultry plants from the European Union’s list of authorised EU suppliers for “deficiency” reasons and the Brazilian police investigation into alleged food safety fraud at one of the country’s major food processors – pangs of doubt appear to be manifesting in Brussels.

A draft Commission Regulation on the delisting of certain third country establishments from which imports of specified products of animal origin are permitted was presented to member states at the Standing Committee meeting on Plant Animal Food and Feed on February 28.

A spokesperson for the commission said that the draft proposes to delist certain Brazilian establishments from which imports of products of animal origin are currently authorised.

“The measure is indeed related to the deficiencies recently detected in the Brazilian official control system.
But, as the text was just presented to national experts from member states the decision will be taken at a later stage – date to be confirmed,” spokesperson said.

Doubts over a deal

Speaking to AgriLand, Commissioner Hogan was adamant that “no offer of 99,000t” has been “formally made” by the EU.

However, he said there have been a number of high-level talks on various scenarios in the event that if agricultural concessions are made, the EU would gain industrially in terms of cars, maritime, public procurement, dairy, geographical indication signs on products and improvements on standards.

“In recent times, as we have discovered through the media, the Brazilian standards are involved in a police investigation in relation to difficulties in five laboratories in a particularly large exporting company in the poultry sector.

“This shows the huge importance for any deal we do with any free trade agreement – particularly with Mercosur. In light of the experience that we’ve had with Brazil, we must be vigilant in relation to consumers, and in relation to the level playing pitch with food safety.

“We need a strong chapter on this agreement – otherwise there will be no agreement,” stated Hogan.

The upcoming Brazilian general election taking place this October now also poses further challenges in progressing the deal.

“We have a political difficulty now in moving negotiations forward, because the Brazilian government are going to have elections.

Therefore, we are not sure if there is going to continue to be the political appetite from the Brazilian government to work with the other Mercosur countries to move the deal along and move it forward.

“I don’t see evidence of that from the government in recent weeks,” said the commissioner.

Further obstacles

Meanwhile, Sean Kelly MEP highlighted that the European Parliament elections – scheduled for May 2019 – also presents obstacles for the pending agreement.

Every day that passes makes it less likely that Mercosur will go through; the longer we don’t have a decision the better chance that it won’t go through at all.

“It’s the only trade deal that I would oppose and I’m the only Irish member on the committee. I have no problem with CETA [trade deal between the EU and Canada], even TTIP [trade deal between EU and the US] has its advantages; but, Mercosur is too damageable.

“The only sector that is going to lose is agriculture and there is a huge danger that it will be sacrificed for the benefit of all the other sectors ,and we’ve got to fight it,” Kelly told AgriLand.

Mood in Brussels

As for the broader mood in Brussels, Kelly – who recently returned from finalising trade talks in Singapore and Vietnam – admitted that “it changes almost every week“.

“Two weeks ago I thought it was certain to go through; now I’m hearing that it mightn’t go through. That could change in another week or two; but – at the same time – the longer it goes on, the less likely it is to go through,” he said.

Kelly, who is also a member of the EPP – the EU’s centre-right party and its largest and most influential political family consisting of 79 parties, including Fine Gael, and partners from 41 countries – said he is “mildly confident” that the EPP could ultimately be convinced to oppose a potential deal.

“The EPP are very strongly pro-farmer and I believe they could be convinced to possibly oppose a deal if it came to it, on two grounds.

“Firstly, it would saturate the market at a time when we have plenty in Europe; plus, there is the danger that Brexit is going to do huge damage, which will again saturate a market – especially from an Irish point of view.”

But secondly and “more importantly” he said every agreement has to be based on mutual recognition and mutual adaptation of standards.

Nobody can convince me that there is anyway of showing that the standard of production from Mercosur – especially Brazil – can be similar to Europe.

“On that principal alone you are discriminating against European producers and I think we have to send a message out that when it comes to European consumers, we are going to continue offering guaranteed, full transparency and standards from farm to fork,” he concluded.