The EU and Mercosur's geopolitical bet plunges into uncertainty

The implementation of the EU-Mercosur agreement is expected to be complex and full of obstacles, including the environmental policy of the Brazilian president, Jair Bolsonaro. The current international framework won't help overcome these pitfalls in a context in which multilateralism has been complicated by the protectionist policy of the United States and the disengagement of other countries in recent years, which could be accentuated by the coronavirus crisis, according to experts. China would be one of the countries on the world trade board that would benefit if the EU finally withdraws from the agreement with Mercosur, experts said.

According to analysts, beyond its economic aspect, this pact is a geopolitical bet of great differential with respect to the US and China.

Figures to take into account
The agreement liberalizes 99% of the EU's agricultural trade, while the Mercosur countries open their market to 88% of community agricultural goods and 91% of their total exports.

The EU had a surplus in global trade with Mercosur of 5,341 million in 2019 (41,229 exports and 35,888 imports). However, this balance is in deficit for the EU in the agricultural area and benefits Mercosur, which achieves a surplus of nearly 14,000 million euro (based on data from 2019).

According to the Spanish Ministry of Agriculture, Fisheries, and Food, Spain's trade balance has a deficit of nearly 2,800 million euro.

Sensitive matters
The standards of plant production are different on both sides of the Atlantic and therefore are a key matter for European farmers, who ask for reciprocity between the foods exchanged.

The agreement dedicates a chapter to sanitary and phytosanitary measures; for example, each block of countries will make available to the other its list of pests, regulated products, and phytosanitary import requirements.

The Business Association for the Protection of Plants (Aepla) applauded the establishment of strict rules but admitted that there was great concern about the possible entry of new pests into the EU.



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