EU-Mercosur: agriculture only part of trade strategy

The government leaders have more or less cleared the way for this last week. Most EU countries seem willing to approve the Mercosur agreement, provided there are sufficient safeguards for European agriculture. This could make Luxembourg the moment when economic necessity and political reality converge – and it could also set the direction for new European agricultural policy for years to come.

Due to the Russian war against Ukraine and the American tariff war, the EU is working on a new trade strategy in which objections from the agricultural sector are no longer the sole decisive factor. According to EU circles, the agreement with Mercosur is not only an economic but also a strategic move in a world where trade relations are rapidly shifting.

The European Commission wants to finalize the Mercosur agreement this year. The treaty aims to create one of the largest free trade zones in the world by abolishing a large part of the import duties. EU Agriculture Commissioner Christophe Hansen said last week during a visit to São Paulo that it is still possible to sign the agreement in December, provided the European Parliament and the Council speed up the process.

Hansen also pointed out that a new safeguard mechanism must protect European farmers from sudden price drops in agricultural products. According to him, the Brazilian government is dissatisfied with this, but the EU considers it a condition for signing.

During the meeting in Luxembourg, the question of how the agricultural sector can adapt in the coming years to changing market conditions also plays a role. The war in Ukraine and the American tariff war have made it clear that the EU wants to be less dependent on a few large trade blocks. 

The Danish presidency is trying to combine the discussion about reforming the Common Agricultural Policy with new trade agreements, while farmers’ organizations fear extra burdens due to environmental regulations.