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Europe

French farmers say EU/Mercosur trade deal will put them out of business

media French farmers block a highway to protest against Mercosur talks, in Pierre-Benite near Lyon, 21 February 2018. Reuters/Emmanuel Foudrot

French farmers are getting ready to show off their cows and pigs and chickens at the annual agriculture fair in Paris, under the shadow of discontent. Beef farmers in particular are upset about a trade agreement currently being negotiated between the EU and the Latin American bloc, Mercosur. It’s an agreement they say will hurt their bottom line.

The EU and Mercosur (Brazil, Argentina, Paraguay and Uruguay) are currently in negotiations to hash out a free trade deal which wold, among other things, remove import tariffs on beef coming into Europe from Mercosur countries.

Listen to the audio report:

European farmers say this will flood Europe with cheap beef and hurt their business. But it’s not just beef at stake in the deal.

“From the European point of view, the big strategic, offensive interest is with automobiles and machinery,” Sebastien Jean, director of the Centre for Research and Expertise in International Economics (Cepii) in Paris, told RFI.

“Tariff protection is significant in the automotive market in Mercosur, so that is really an important part of a potential agreement [with the EU].”

Beef for cars

Mercosur already exports 200,000 tons of beef to Europe, subject to import tariffs. Without the tariffs, South American beef becomes more attractive, price-wise, than French, or other European beef.

“It’s not fair at all, because the South American use techniques that are forbidden in Europe, like some pesticides, or hormones,” Arnold Puech d’Alissac, a beef farmer in Normandy, told RFI. “They are more competitive in this system. They can sell cheap beef, though not at all the same quality.”

French farmer and beef industry groups say that opening the European market to beef from Mercosur countries would put 25,000-30,000 French farmers out of business.

“Any drop of income would be a disaster, and a loss of jobs,” Justine Gardien, of the French beef industry group, Interbev, told RFI. “And these job [losses] will not only be farmers, you also have to consider the processers and the retailers.”

Listen to an interview with Interbev's Justine Gardien:

Interbev would like to see beef out of the EU/Mercosur trade deal, exempted much like the cultural exception France negotiates in many of its other trade deals.

“We’d like some agricultural exception to be possible, and we’d like beef to be out of these negotiations,” says Gardien. “We are nowadays self-sufficient in beef in Europe up to 98 per cent. We do not need these thousand tons more to be added.”

But trade specialist Sebastien Jean says keeping beef out of the deal is unlikely, as it is a key part of the negotiations.

“I don’t think it’s likely that Mercosur countries would accept any deal without beef,” he says. Plus, the European Commission has already made quota offers (it started at 70,000 tons, and is now between 90,000 and 100,000)

“So the question is not beef or not beef, but how much beef. And the Mercosur policy makers made it pretty clear that what they will offer in terms of regulatory cooperation or access to the automotive market will be tailored to what they are being offered on the beef market.”

Ticking clock

There is pressure to wrap the deal this month, at this negotiating session in Asuncion, Paraguay, which runs from 21 February to 3 March, because Brazil’s election campaign starts in March. Political changes could mean a loss of momentum.

Farmer Puech d’Alissac says the timing is wrong. European beef farmers are facing an uncertain future with Britiain’s exiting the EU:

“The risk we have from the UK, with 300,000 tons of beef sold by several European countries to the UK. We don’t know how the market will be tomorrow. So Brexit, plus the Ceta [Comprehensive economic trade agreement, signed between the EU and Canada in 2016], plus maybe the Mercosur? This would be a big trouble.”

Sebastien Jean says the EU has pressure, too, to conclude the deal, ahead of EU elections next year, and because there is something to prove in the face of the United States pulling out of the Trans-Atlantic free trade agreement last year.

“There is somehow a bit the shadow of the United States in this discussion,” he says. “We’re facing this isolationist political posture of the US. And it can be a way for the EU to show the Americans they can move forward even without the US.”

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