The interim report assessing the impact of trade on sustainable development of the EU-Mercosur trade agreement concluded in June 2019 received mixed reviews when it was presented by the European Commission to stakeholders on Tuesday 15 October.
The results of this evaluation, drafted by the London School of Economics, suggest that EU manufacturing and services will benefit most from this agreement. As for Mercosur, it is the agricultural sector that should come out on top, the report points out to no surprise. This is mainly to the detriment of agriculture and rural areas in the European Union, which is at the forefront of the expected negative effects, the authors admit.
For the EU, a significant share of GDP gains comes from increased consumption due to cheaper imports, with a smaller share of export and investment expansion, the report also states.
In addition, the Mercosur bloc is expected to see its wage gaps narrow due to the increased demand for low-skilled workers.
Mixed reactions
Stakeholders had a mixed reception of this interim report during its presentation.
“It is a solid report, still at an early stage, but it gives a good overview of the different elements of the agreement”, said Dominic Boucsein, Eurochambres’ international trade officer.
“We are very much in favour of the agreement with Mercosur; it opens many doors for SMEs in the EU”, he told EUROPE.
The situation is quite different for civil society and agricultural organisations.
For some, this report should have been published before the negotiations.
“It is not yet a bold enough report”, said Stéphanie Ghislain, programme manager at the Eurogroup for animals.
This is due, for example, to the fact that it fails to consider sustainability issues in all their dimensions. Other shortcomings: it does not sufficiently analyse production chains or the impact of the trade agreement on international environmental agreements, including the Paris Agreement.
Finally, it “does not really study the impact of the different scenarios on animal welfare. As European standards (...) are more stringent than those of Mercosur, a transfer of part of the EU's beef production to Mercosur will have an impact”, she added.
“There is still a lot of work to be done”, concluded Ms Ghislain.
A “wrong” idea of the agreement
As for the representatives of agricultural organisations, who consider this treaty too unfavourable to their sectors, they deplored the lack of precision of some evaluations, particularly for the most sensitive sectors. They denounced figures that they sometimes consider erroneous: “it gives a false idea of the real impact of the envisaged liberalisation”, one source confided.
On the basis of consultations with stakeholders, a final report will be published, which will include recommendations on the implementation of the agreement.
To view this interim report: https://bit.ly/2oWQP9M (Original version in French by Hermine Donceel)