Stephen Cadogan: European food producers are split on the advance of Mercosur

Their wish could be delivered next week, at a Mercosur summit meeting in Uruguay, with EU negotiators believed to be intensifying their efforts so that European Commission President Ursula von der Leyen can fly in to sign the agreement.

It shows how much is at stake, when the EDA goes out on a limb, even as farmers in France ramp up protests against the trade deal, and Copa-Cogeca, representing the EU's farmers and agricultural co-ops, urged von der Leyen to reject the Mercosur deal, and adopt “a coherent trade policy”.

Copa-Cogeca said the "dreaded" Mercosur agreement is a "no-go zone" for European farmers. "An agreement that jeopardises such a strategic sector as European agriculture makes no sense".

"An agreement without sufficient compulsory commitment from Mercosur countries on standards linked to animal welfare, the use of medicines in animal production, climate, chemical treatment, and other environmental standards may cause European farmers to take to the streets again," warned Copa-Cogeca in their letter to EU leaders, signed by more than 50 of their member organisations, representing all 27 member states.

However, the EDA and 77 other business associations they sided with said they cover a significant portion of the more than €159bn of existing trade in goods and services between the EU and the Mercosur region.

Few EU trade deal proposals have been so controversial. In EU agriculture, the deal could be positive for the pigmeat and dairy sectors; the wine, spirits, and beverages sectors; and for makers of processed foods. But it could be negative for the beef, poultry, sugar and rice sectors.

But over and above sectoral interests, farmers resent what they believe is a double standard, with EU policy all about climate, deforestation rules, and the health of consumers, but EU leaders still anxious to make it easier to import and consume more red meat from methane-belching cows in deforested Mercosur areas.

They fear becoming the sacrificial lamb so that German carmakers can get rich in South America from the “cows for cars” deal, which would create a common market of nearly 800 million people.

Although sustainable prosperity is one of von der Leyen's main aims as commission president, she may be willing to hold her nose and sign an environmentally questionable deal in order to match China's worldwide trading progress and leave the EU in a stronger position before the feared disruption of world trade when Donald Trump assumes the US presidency.

France is the only member state vehemently opposed to a Mercosur free trade agreement but would need the support of a member state qualified minority representing at least 35% of the EU population to block the deal.

That looks like a remote possibility, and would not even be enough if some member states succeed in lobbying for a qualified majority among member states to suffice to pass some of all of the deal.

Quotas

Meanwhile, European Commission sources are working behind the scenes, with statistical arguments that proposed tariff-free quotas of South American produce amount to only two beef burgers or two chicken fillets per EU citizen per year.

However, EU beef and poultry lobbies say the impact is much greater, mainly because it is high-value cuts of beef and chicken that South America sends to the EU.

In a commission report, the combined impact of the Mercosur deal, the already-concluded New Zealand deal, and a potential trade deal with Australia is estimated to reduce cattle prices only 2.4%, and output by 0.9%, by 2032.

The commission also says its negotiators have secured emergency safeguards to allow Brussels intervene if some South American imports disrupt the EU single market.

They also point to the success of the CETA deal with Canada, with the EU beef industry's fears unfounded, because the Canadians have found it so difficult to meet EU beef standards.