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The European Union’s executive arm on Wednesday unveiled detailed proposals to protect farmers from being undercut by imports from South America as it seeks to build support for its deal with the Mercosur trade alliance.
The deal between the EU and the five Mercosur countries — Brazil, Argentina, Uruguay, Paraguay and Bolivia — would progressively remove duties on almost all goods traded between the two blocs over the next 15 years. Provided it is ratified by both blocs, the accord would create one of the world’s largest free trade zones, covering a market of 780 million people that represents nearly a quarter of global gross domestic product.
However, it has faced vehement opposition from Europe’s agriculture sector. The proposals unveiled Wednesday would give farmers new mechanisms to complain and force the European Commission to investigate trade imbalances stemming from the Mercosur deal.
A commission statement said that the proposal would increase protections so that in the “unlikely event of an unforeseen and harmful surge in imports from Mercosur or an undue decrease in prices for EU producers, swift and effective protections would kick into gear.”
The commission says it would launch investigations if import prices from Mercosur are at least 10% lower than the prices of the same or competing EU products. If there is serious injury, preferential tariffs could be temporarily withdrawn.
There are also special provisions for sensitive sectors including beef, eggs and ethanol.
The EU-Mercosur deal, which was agreed in December after nearly 25 years of negotiations, must be approved by the bloc’s 27 member states, as well as the European Parliament.
From Spanish ham and French wine to Dutch dairy and Greek olives, agriculture is central to the European Union’s budget, economy, culture and politics. The EU exported 235.4 billion euros ($272 billion) worth of agricultural goods in 2024.
Yet the sector is aflame with tensions.
In February, driven by activist agricultural organizations and the complaints of hard-right parties, the commission vowed to slash red tape for farmers and more equitably distribute annual 50 billion euro ($58 billion) subsidies spread across the 27-nation bloc.
Disgruntled farmers used tractors to paralyze many European capitals as part of a campaign lionized by the far right in the runup to their successful showing in EU-wide elections in 2024.
Many farmers loathe the Mercosur deal, but its proponents in Brussels say it would save businesses some $4.26 billion in duties each year, slashing red tape and removing tariffs on products like Italian wine, Argentine steak, Brazilian oranges and German Volkswagens.
Its critics in France, the Netherlands and other countries with big dairy and beef industries say the pact would subject local farmers to unfair competition and cause environmental damage.
