Last week, farmers in Belgium, Germany and other EU countries demonstrated against the finalization of the proposed free trade agreement between the EU and the South American Mercosur countries (Brazil, Argentina, Paraguay and Uruguay).

The Mercosur agreement aims to create one of the world’s largest free trade areas by reducing tariffs and boosting trade, according to EU President Ursula von der Leyen. Negotiations began 25 years ago and a preliminary agreement was reached in 2019. However, opposition from EU countries such as France, the Netherlands and Poland led to years of renegotiation.

The agreement has now reached a political conclusion, but significant hurdles remain. After a formal legal review, the agreement must be translated into EU languages and approved by the European Council and Parliament. It will then need to be ratified by all EU national parliaments.

European farmers fear a surge in imports from South America, particularly beef, soya and sugar. With vast agricultural land and lower production costs, Mercosur countries could gain a competitive advantage. EU farmers, who have to meet strict environmental and social standards, may find it difficult to compete on price.

There are also environmental concerns. The EU prioritises sustainable agriculture and climate protection and imposes strict regulations on its farmers. Meanwhile, land clearing for agriculture in Mercosur countries, particularly in the Amazon, raises fears of increased deforestation.

On the other hand, the agreement could open up export opportunities for European farmers. Products such as wine, cheese and olive oil could gain easier access to Mercosur markets through tariff reductions, benefiting specialized producers of high-quality goods. However, the EU’s deforestation regulation could impose stricter requirements on Brazilian exports.

However, the EU’s deforestation regulation could impose stricter requirements on Brazilian exporters, potentially offsetting these benefits.

The German Federal Ministry for Economic Affairs and Climate Protection (BMWK) has emphasized strict import regulations that only allow products that meet EU standards to enter the market. Bilateral safeguard clauses could be activated to address economic disadvantages caused by sudden import surges. Specific import quotas for sensitive products such as beef, poultry, sugar and ethanol are also part of the deal.

Environmental protection measures are included, such as commitments to international agreements like the Paris Climate Agreement, prevention of deforestation, sustainable agriculture and investment in renewable energy. Transparency mechanisms and civil society participation will ensure compliance. Both sides pledge not to lower environmental standards for economic gain.

Despite these measures, critics remain sceptical, particularly about the enforcement of deforestation controls in the Amazon. The effectiveness of environmental regulations depends heavily on consistent implementation and monitoring. For EU agriculture, maintaining strict environmental and social standards will be crucial, as will potential compensation mechanisms to protect farmers from unfair competition.

Innovation and sustainability will be key for European farmers to remain competitive in the global market as the final decision on the Mercosur agreement approaches.