Despite numerous meetings between EU and Mercosur negotiators in recent months, the thorny issue of the additional instrument on environmental issues continues to cause tension in several Latin American countries, to the point where some have stated their intention to withdraw from the agreement if discussions drag on (see EUROPE 13257/29). This situation is causing concern, particularly among representatives of the Brazilian agricultural sector.
“The European Union is an extremely important market for us: it accounts for 17% of our exports, which is more than the United States”, Eduardo Bastos, head of the sustainable development committee of the Brazilian Association of Agribusiness (ABAG), told EUROPE while in Brussels for a series of conferences on sustainable agriculture.
“This agreement makes many demands in terms of fair trade and the environment. It’s the most specific we’ve ever had”, argued his counterpart, João Adrien, vice-president of the Brazilian Rural Society (SRB). “Its implementation is a major opportunity to make these requirements a standard for future trade agreements worldwide”.
However, it is these environmental standards that could derail the negotiations, standards which have been described as “aggressive” by the Brazilian President. Although these standards are “necessary”, their application is open to criticism, according to Eduardo Bastos: “It’s a question of reciprocity: we can put in place a complete chain of traceability for our products exported to the EU. However, this means that we can only transport these products through the south of the country. It costs a lot more, and European countries don’t seem prepared to accept this”.
Several EU countries have expressed reservations about the agreement and its consequences for the Union (see EUROPE 12188/3). The NGO Greenpeace has denounced the presence of illegal pesticide residues in certain exports from Brazil (see EUROPE 13166/23).
China ready to pay the price
Today, almost 30% of Brazilian exports go to China. It is the country’s main market. “Asia is a fast-growing market and it’s quite easy to follow that direction”, admits Mr Bastos. “Even without China, Asian countries account for 16% of our exports”.
For the two Brazilian representatives, the failure of the negotiations on the agreement would be a blow to the EU not only in trade terms but also geopolitically. “Some [Mercosur] countries are already moving towards backup plans”, according to Eduardo Bastos. These could well include the Chinese market, which is less specific in terms of environmental standards, and would represent a setback for the EU.
“We absolutely need a balanced agreement that takes all the circumstances into account”, emphasises João Adrien. “Otherwise, we risk suffering a major political setback”. However, he fears that the agreement will not be concluded before the end of the year. (Original version in French by Isalia Stieffatre)