Vilified by some, defended by others and misunderstood by many, the “Mercosur Agreement” is a passionate subject these days on farms across the European Union and especially in France.
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00:00The agreement with Mercosur seems completely absurd.
00:02The competitiveness of our companies is going to be strengthened.
00:07Bribed by some, defended by others, misunderstood by many,
00:10the so-called Mercosur agreement generates these days
00:13great passions in the farms of the entire European Union,
00:16especially here in France.
00:18The European Commission has just signed it,
00:20to the great dismay of almost all French farmers
00:23who openly oppose an ambitious and complex agreement
00:27that has been in negotiations for 25 years.
00:34The Common Market of the South, Mercosur and the European Union
00:37have agreed to trade goods with reduced or without aranceles.
00:41If ratified, it would create a market of about 800 million people,
00:45one of the largest free trade areas in the world.
00:49It would eliminate more than 90% of aranceles between Brazil,
00:52Argentina, Paraguay, Uruguay and the 27 community countries.
00:57It would imply less taxes on cars, industrial equipment
01:01and European chemical products,
01:03in addition to clothing, pharmaceutical products and some agri-foods.
01:08In return, the EU would open its markets more to Mercosur,
01:11in particular to its agri-food products.
01:15Free taxes on sugar and corral bees would increase.
01:19Mercosur could also export to Europe
01:2199,000 additional tons of vaccine with reduced aranceles.
01:251.6% of its annual production in Europe.
01:31Germany and Spain support the agreement.
01:33Italy has sent contradictory signals.
01:36Poland, and in particular France, are against it.
01:39Its farmers say that Mercosur producers
01:42will not be subject to European labor standards and costs,
01:45nor to their strict regulation of pesticides,
01:48or hormones and antibiotics in animals.
01:51They also denounce that the agreement
01:53disarms consumers and threatens the sustainability
01:56of European farms.
02:05But even within the powerful French agri-food sector,
02:09opinions are quite divided.
02:11Less aranceles and more open markets
02:14would harm, for example, cattle ranchers,
02:18but at the same time they would benefit
02:21wine and cheese producers and exporters.
02:24This is the portrait of a sector
02:26with two very different feelings
02:29about the same trade agreement.
02:41At 43, Pierre-Marie Delangle is defined as a local producer.
02:46His farm in the center of France employs six people.
02:50He raises chickens, sheep and about 250 cows,
02:53including dairy and meat.
02:55He estimates that the agreement with Mercosur
02:58would force him to reduce prices by up to 30%,
03:01which, he says, would endanger his business.
03:05If we are competed by meat that comes from South America,
03:08of course we will value these animals less,
03:11so we will have less income.
03:13If there is less competition,
03:15there is less activity in Europe,
03:17particularly in France.
03:19So if there is less breeding,
03:21there is a whole economy behind it,
03:23a whole sector that is weakened.
03:25So if there are fewer animals to slaughter,
03:27there are fewer slaughterhouses,
03:29fewer tools to value and transform our animals.
03:32In the end, it is also this economy that is threatened.
03:39There are many other free trade agreements
03:41that have been negotiated or already signed
03:43between Europe and a whole bunch of countries.
03:45The United States, Canada, Morocco,
03:47Chile, New Zealand, there are a lot of them.
03:50What seems absurd is to put agricultural products
03:52in the same treaty,
03:54which seems to serve as a currency
03:56against industrial products.
04:02Most of our land is not workable.
04:04We are not going to grow cereals in these plots.
04:07So in the end, the risk is to see
04:09our breeding activity condemned, quite simply.
04:12We are playing with the food sovereignty of our country
04:15and of the different European countries.
04:17These free trade agreements will favor
04:19large multinational groups
04:21who will take over land
04:23and who will make these small peasants die.
04:25There is nothing coherent in all this.
04:31500 km south, the agreement is contemplated
04:34in a very different way from this vineyard.
04:39Jean-Marie Fappe is the president
04:41of the Independent Winemakers of France.
04:43His property, the winery,
04:45covers 15 hectares and employs 4 people.
04:4730% of its wine production is exported.
04:50For small cellars and open markets,
04:53it is a golden opportunity.
04:56The Mercosur agreement poses difficulties
04:58for other agricultural sectors,
05:00but for the winery sector,
05:02it will bring back customs rights
05:04on the penetration of our wines
05:06on these countries to zero,
05:08which are now around 27%.
05:10So no, the agreement as it is there
05:12for the wine and spirits sector
05:14is a free trade agreement that satisfies us.
05:16Recent history says
05:18it has convinced him of the need
05:20to trust these free trade agreements.
05:23In 2017, the trade agreements signed with Japan
05:26that brought customs rights back to zero,
05:28so null,
05:30made us gain in 2018
05:32more than 15% in value
05:34and about 10% in volume,
05:36while it was already a very mature market.
05:46According to the European Commission,
05:48the agreement would save the companies
05:50of the EU more than 4 billion euros
05:52a year in tariffs.
05:54Most of the tariff concessions
05:56are subject to specific quotas
05:58to protect consumers and producers of the EU,
06:00while the countries of the Mercosur
06:02have committed to eliminating
06:04illegal importation by 2030.
06:07So what is the path that remains to be traveled?
06:09Can the European Union really allow
06:11not to ratify the agreement?
06:13I have come here, to Paris,
06:15to transfer all these questions
06:17to Elvir Favry,
06:19a specialist researcher
06:21in geopolitics of trade.
06:27Given the economic slowdown in China
06:29and the expected increase
06:31of US trade tariffs,
06:33Elvir Favry says that the EU
06:35must look for new markets for its exports
06:37and also to cover
06:39its own strategic shortcomings,
06:41especially with regard to raw materials.
06:45We find in Brazil,
06:47in Argentina in particular,
06:49ores that are very important
06:51for all our green and digital technologies,
06:53to which we have redirected
06:55investment programs
06:57and we are starting
06:59a European industrial strategy.
07:01We are trying to preserve
07:03our access to these critical ores.
07:06And when it comes to public health safeguards,
07:08the current legislation
07:10should be effective enough,
07:12he says.
07:14We must keep in mind
07:16that all products that enter the EU
07:18must respect the sanitary
07:20and phytosanitary standards.
07:22So if there is a pesticide
07:24that is used in Argentina,
07:26in Brazil or elsewhere,
07:28that is not used in the EU,
07:30there must be a threshold of residues
07:32that must be respected
07:34in order to enter the European market,
07:36whether there is a trade agreement or not.
07:41The ball is now in the hands
07:43of the Member States and the Council.
07:45The European Parliament
07:47would also have to give its final green light
07:49for its final adoption.
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