European agricultural sector claims the European Commission is trying to ‘buy their silence’ on the agreement
The European Commission is preparing a financial fund to ‘compensate’ European farmers for the impact of a trade liberalization agreement with Mercosur. The negotiation’s conclusion could be announced by the end of this year, according to expectations in Brussels and Brasília.
Brussels’ aim with this compensation package is to reduce resistance, particularly from France, and from other opposing countries such as Ireland and Austria.
The political news outlet Politico, which revealed the European Commission’s plan, noted that similar actions have precedents. In 2021, the EU created a €5.4 billion (R$33.1 billion) ‘adjustment package’ to protect several sectors, including fisheries, from potential negative impacts following the UK’s exit from the EU common market.
In 2019, when the EU and Mercosur announced a ‘provisional agreement’ between the two blocs, the then-Agriculture Commissioner, Phil Hogan from Ireland, had already promised to provide €1 billion (R$6.1 billion) in financial support to European farmers in case of ‘market disruptions’ resulting from the deal with Brazil, Argentina, Paraguay, and Uruguay.
However, the European agricultural sector’s reaction to the Brussels plan has been harsh this week. The Commission has been accused of attempting to ‘buy the silence of farmers with a handful of coins.’
Brazilian Imports
“What’s happening is completely absurd. Our farmers cannot accept this,” said Arnaud Rousseau, president of FNSEA, France’s largest agricultural union. The European beef sector fears a flood of imports from Brazil, Argentina, and Uruguay, even beyond the established quotas (which benefit from reduced tariffs).
Politically weakened, French President Emmanuel Macron reaffirmed his opposition to the Mercosur agreement this week, insisting that the South American bloc fails to comply with the Paris Climate Agreement.
“The current version of the Mercosur agreement is not acceptable. We demand substantial respect for the Paris Agreement, the inclusion of mirror clauses, and the protection of European industries and farmers,” Macron stated in Brussels.
The EU spokesperson declined to comment on a possible compensation plan for farmers. However, a French negotiator, speaking informally to European newspapers, admitted that the idea has merit—predicting that farmers will ultimately demand far more subsidies.
Officially, French representatives continue to threaten to form a ‘blocking minority’ within the EU, meaning 45% of the member countries, representing 35% of the EU population, could freeze the agreement.
The fact remains that negotiations between Mercosur and the EU seem to be progressing at a new pace, as noted by Pascal Lamy, former EU Trade Commissioner and ex-Director-General of the WTO.
