Delay in signing the EU-Mercosur trade agreement.

The trade agreement between the European Union and five countries that make up most of South America, which was scheduled to be signed last Saturday, has been postponed until the new year.

This region could supply the EU with a large quantity of tropical fruits similar to some of Vietnam's export items. The decision to postpone the signing of the agreement was made by the President of the European Commission under pressure from several countries and more than 7,000 European farmers who protested in Brussels last week.

On the sidelines of the European Summit in Brussels this month, farmers from member states brought more than 500 tractor-trailers carrying a message protesting the trade agreement with the Mercosur bloc, comprising five South American countries: Argentina, Bolivia, Brazil, Paraguay, and Uruguay. The agreement is expected to eliminate most of the tariffs imposed on each other's markets, benefiting the EU's 450 million consumers and Mercosur's more than 270 million consumers.

According to the Belgian newspaper Le Soir, "This agreement could help the EU export cars, machinery, wine and spirits, but conversely it could threaten Europe's meat, sugar, rice, honey and soybean industries."

Leaders of European farmers' organizations are concerned that "South America uses certain pesticides and growth hormones banned in the EU, and many products imported from South America do not meet EU environmental and social standards," thereby creating unfair competition with European agricultural products which are subject to stricter regulations.

Agreeing with many arguments from farmers' organizations, the French government, and more recently Italy, wants to delay the signing of the trade agreement with the Mercosur bloc. However, the European Commission's position has not changed much since last year, the end of 25 years of negotiations. The European Commissioner for Agriculture has reassured that the EU is a net exporter of agricultural products, with this figure projected to reach €64 billion in 2024. Furthermore, goods from South American countries will be subject to strict quality controls; for example, 20% of containers from Brazil will have to undergo direct inspection.

Notably, just before the agreement signing ceremony in Brazil was postponed, the European Parliament approved a mechanism to protect the internal agricultural market. According to this mechanism, if the quantity of a particular commodity from South America increases dramatically and prices fall significantly, Europe has the means to stop importing that commodity.

The European Commissioner for Agriculture also emphasized that the trade agreement with Mercosur is necessary given that farming in the EU is attracting fewer and fewer workers, while the prices of many food items are rising.

Source: VTV