Arrangements are disadvantageous to consumers and producers
Brussels, 2 July 2019: The milk producers of the European Milk Board (EMB) have expressed severe misgivings about the recent trade agreement between the EU and the Mercosur countries. As EMB Vice-President Sieta van Keimpema explains, it is problematic for the dairy and the beef sector as well.
The recently-approved generous beef quota to the tune of 99,000 tonnes for export from the South-American countries to the EU poses the risk of a significant drop in EU beef prices and threatens to replace part of local beef production. Furthermore, other arrangements in the Mercosur Agreement could further increase the existing overproduction in the dairy sector. The high quantity of soya imports is one of the reasons for the damaging overproduction in the EU. The planned reduction of Mercosur export duties is expected to lead to even higher soya imports to the EU, which could exacerbate EU surpluses even further. "We milk producers in the EU have been working for years to make the dairy sector resistant to crises and future-proof once again. The Mercosur Agreement, unfortunately, counteracts these efforts", says van Keimpema.
"Furthermore, these agricultural products, which will now come to us in Europe in even greater quantities, are different from those produced in the EU in terms of standards and production requirements. This leads to unfair competition to the detriment of EU producers", continues van Keimpema, further explaining the milk producers' concerns. "And of course, we have to wonder to what extent at least guaranteed conditions for EU consumers will really be respected."
But the agreement is not only questionable for milk producers and consumers in the EU, as van Keimpema goes on: "The decreases in tariffs for EU milk products pose the threat of stifling milk prices for dairy farmers in the South-American countries as well. While our association represents European milk producers first and foremost, we also want to ensure that the price situation for our colleagues in the Mercosur region does not deteriorate."
To add to this, she points to the current developments in Brazil, the largest Mercosur economy, which are truly unsettling. "The government's handling of human rights as well as its environmental decisions are being met with significant criticism worldwide – something that we echo", says van Keimpema. As one of the points of major concern she mentions the increased felling of the rainforest since the beginning of 2019.
As the EMB underlines, milk producers' evaluation of the Mercosur Agreement is not fuelled by a desire to increase protectionism. Is it important for trade agreements to establish fair and balanced trade relations – that are not disadvantageous to farmers and citizens on either side. Due to all the reasons above, the Mercosur Agreement in its current form sadly does not fulfil this key condition.