EU-Mercosur trade deal threatens fair competition and high standards, says Austrian delegation
The Austrian delegation has expressed concerns about the EU-Mercosur Association Agreement and its agricultural implications in a note submitted for discussion at the upcoming Council on Agriculture and Fisheries on 20 March 2023.
After 20 years of negotiations with the Mercosur member countries, an "agreement in principle" was reached in June 2019. However, the Austrian delegation notes that the agreement lacks the necessary focus on sustainable agricultural aspects, compliance with EU agricultural production standards, and consideration of emerging consumer concerns with Mercosur imports.
The note points out that the European agricultural market is currently facing several challenges, including the long-term effects of the global COVID-19 pandemic, input cost inflation, and market volatility, as well as geopolitical challenges caused by the Russian aggression against Ukraine. Additionally, EU trade agreements in recent years have led to a significant opening of EU agricultural markets with negative cumulative effects on the EU agricultural sector's competitiveness.
The Austrian delegation stresses the importance of sustainable European agricultural practices and the need to maintain high agricultural production standards in all trade agreements to guarantee a fair level playing field and to promote high European standards globally. However, in the Mercosur trade agreement, compliance with higher EU agricultural production standards has not been adequately reflected.
Furthermore, a significant negative impact on the competitiveness of the EU's agricultural markets is likely to emerge as EU producers will experience a substantial loss of market share, leading to high pressure on EU producer prices and the ability of European farms to compete. Production costs are much lower in the Mercosur countries than in the EU, according to experts, around 50%.
The Austrian delegation also highlights the importance of implementing the reciprocity principle in trade deals to ensure imports into the EU are produced under the same conditions as the Union's own products to ensure fair competition. It stresses the importance of the implementation of the French proposal on "mirror clauses," which ensure compatibility with EU production standards.
In addition to an in-depth dialogue between the European Commission, member states, and agricultural stakeholders, the Austrian delegation urges the European Commission to provide further details on concerns related to the Mercosur Agreement. This includes increased agricultural import monitoring and controls, future Mercosur agricultural export potentials, financial support for maintaining competitiveness, and safeguard measures in the agricultural sector.