The move will open EU countries to Mercosur nations (Argentina, Brazil, Paraguay and Uruguay), giving their producers and farmers unprecedented access to the world’s largest common market.
For years the deal has generated controversy in countries with powerful farming lobbies and has sparked nationwide protests in both France and Ireland over fears that native beef production will be significantly undercut.
Last week saw a final ratification vote in the European parliament; France, Ireland, Poland, Austria and Hungary voted against, Belgium abstained and the remaining 18 nations; including Germany, Spain and Italy, voted in favour.
The agreement will see the EU open its markets up to a yearly quota of 99,000 tonnes of South American beef at a 7.5% preferential tariff rate.
This had led to serious concerns from EU beef farmers that their production could be significantly undercut, with serious concerns also raised over the traceability and overall quality of South American beef.
Major Mercosur exports towards the EU would also include a range of other agricultural products and minerals – with the European bloc in turn sending over machinery, chemicals, and pharmaceuticals with lowered tariffs applied.
Analysing the latest developments in the saga, Sarah Blanchard, head of ESG at Prof Consulting Group, told Food Manufacture: “Given the difficult conditions for farmers in France and their violent protests, Emmanuel Macron [French president] had no choice but to refuse to sign up to Mercosur.
“While the impact of Mercosur isn’t completely clear yet, we can take a guess at some of the winners and losers, and analyse some interesting messages coming from the French Government.
“French beef producers most likely won’t be affected as their differentiation is their French origin - this is important to consumers and must be clearly labelled. The quota quantities are also quite low.
“European processed food and ready meal makers who use chicken are the main winners. They now have access to more and cheaper raw material. In theory, this should mean lower prices for consumers as well. However, this source of material is problematic, as chickens are fed on soy and are not covered by the EU Deforestation Regulation (embedded soy). In addition, European poultry farmers, especially the smaller ones, risk not being able to compete on price.”
She concluded: “French producers and their supporters object to Mercosur because it sends a message that countries with lower environmental, human rights and safety standards can walk in through the front door and are worried what will come next.”
