Ahead of an exchange of revised offers for market access in the EU-Mercosur free trade talks (Brazil, Argentina, Paraguay and Uruguay) next week, eleven EU member states, led by France, urge the European Commission to ensure beforehand genuine protection for sensitive products.
Ahead of the fourth round of EU-Mercosur free trade talks, which were re-launched in 2010, Austria, Belgium, France, Hungary, Ireland, Lithuania, Luxembourg, Poland, Romania, Slovakia and Slovenia warned the Commission in a memorandum seen by this newsletter that they felt it would be ‘premature’ to include in the EU’s revised offer import quotas for the most sensitive farm products, particularly beef, ethanol, sugar and poultry.
The eleven countries say that two precognitions need to be met before the offer on the most sensitive products is presented to Mercosur.
They call on the Commission to ‘elaborate a method to define a maximum level of concessions (volume, composition, tariff administration and staging), in relationship with Member states. The purpose would be to take into account all concessions already granted and those considered in ongoing and future negotiations (Australia, New Zealand, Mexico), within the limit of a maximum envelope for each product. This method must in particular be grounded on the cumulative impact of quotas on sensitive sectors and take into account the absorption capacity of the European market as well as the potentially very serious implications of Brexit.’
They also urge the Commission to ‘include provisions in order to ensure a level-playing-field between partners: a finer segmentation of quotas within tariff lines, an efficient safeguard mechanism, and non-tariff conditionalities (environmental standards, SPS or animal welfare). These tools could allow for the suspension of trade preferences.’
Assurances on protection of beef demanded in Parliament. At the European Parliament, a rumour that the European Commission is considering including in the revised EU offer a tariff contingent of 70,000 tonnes of beef is of concern to French MEPs in both main political parties.
At the EPP, Michel Dantin and Joseph Daul say that the Commission has lost any sense of reality. They explain that the beef sector provides growth and jobs in rural areas in a number of member states, but there are limits to its capacity to absorb trade concessions, particularly since it was severely impacted by the dairy crisis of 2015-2016 and is facing falling meat consumption against a backdrop of Brexit-related uncertainty. They also expressed concern about health risks following the Brazilian beef scandal.
For the S&D, Eric Andrieu says that this concession risks sending the beef industry to the slaughterhouse, particularly since the zero-rated beef import quota for Canadian beef exports to the EU laid down in the CETA EU-Canada free trade deal will rise from 7,640 to 45,840 tonnes over six years. This offer, he said, is unacceptable given the current saturation of the Single Market which is causing an unprecedented crisis and threatening the survival of many thousands of farms in Europe. Andrieu pointed to a 20% decline in beef consumption over the past ten years, differences in health standards and Brexit-related uncertainty. He said the Commission must stop using agriculture as a bargaining chip for greater access for European industrial products and services. He ended by saying that as an extremely sensitive product, beef must be excluded from these talks.
Commission wants an agreement in principle this year. European and South American negotiators will be in Brasilia on 2-6 October to consider improving their offers on access to the market, including farm and industrial products, services and public procurement, with a view to reaching convergence in the talks so an agreement in principle can be reached before the end of the year (see EUROPE 11832).
The latest figures circulating in Brussels say that the Commission is considering import tariff quotas of 70,000 tonnes of beef and 600,000 tonnes of ethanol, in other words volumes for beef that are very close and for ethanol identical to those the Commission foresaw in the first offer in May 2016, but then had to abandon. (Original version in French by Emmanuel Hagry)