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Producers See New Safeguard Mechanism As Exaggerated And Harmful To Brazilian Commodities, Potentially Suspending The Terms Of The Trade Agreement.
Leaders of Brazilian agribusiness expressed strong concern over a new provision included by the European Union (EU) in the final wording of the Mercosur agreement. The clause, deemed harmful, could facilitate the imposition of barriers to competitive Brazilian products, creating a deadlock in the final stretch of the negotiations.
Understand The European Barrier To Brazilian Commodities
A new clause sent by the European Commission to the European Council has raised an alarm in the agricultural sector. The provision states that any increase in imports of Mercosur products to the EU exceeding 10% per year, with average prices at least 10% lower than European prices, may be seen as a “serious threat of harm” to the local industry.
In practice, this paves the way for the application of safeguards. These measures are a tool that can lead to the suspension of tariff reductions agreed upon in the treaty. In a more drastic scenario, it could mean the return to the base tariff for a period of up to four years, effectively suspending the terms of the Mercosur agreement.
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The Reaction Of Brazilian Agribusiness: Concern And Alert
For key sectors of agribusiness, the clause is classified as exaggerated and highly harmful to Brazilian commodities. The competitiveness of national products, particularly in the animal protein sector, would be directly impacted by the measure.
Concern is growing as the safeguard could be triggered even if the alleged harm is limited to just a few EU Member States. The process for this would also be swift: European producer associations could request an immediate investigation. The European Commission would commit to deciding on provisional measures within 21 days and concluding the investigation in a maximum of four months.
Final Stretch Of The Agreement: The European Union’s View
While the agri sector contests, the Mercosur agreement is moving towards its final approval phase. The European Commission, alongside countries like Germany and Spain, argues that the treaty is a way to reduce dependence on China, especially for essential minerals.
The EU claims this is the largest free trade agreement ever negotiated in terms of tariff reductions, eliminating over 4 billion euros in tariffs on the bloc’s exports annually. Another highlighted point is that European companies could compete for public contracts in Mercosur under the same conditions as local suppliers, which is unprecedented in previous agreements of the South American bloc.
The Created Deadlock And The Next Steps
The inclusion of this new clause creates a significant point of tension in the conclusion of the agreement. On one side, Europe seeks to protect its internal markets; on the other, Brazil sees a direct threat to one of its most strategic and competitive sectors.
The CNN sought a position from the Ministry of Development, Industry, and Trade regarding the agribusiness contestation but is still awaiting a response. How this divergence will be handled in the coming weeks will be decisive for the future of the Mercosur agreement.
Não vale apena para o Mercosul tal tipo de acordo com cláusulas absurdas dessas, então os europeus igual aos EUA só querem ganhar,se perderem em alguma coisa trava tudo,deixa as tarifas e muito melhor vamos vender para Ásia é mais negócio.