2024-02-01 12:22:58
French agricultural unions blame some EU free trade agreements and seriously question their viability. They all denounce the open-door policy to “unfair competition,” even though certain sectors are already able to benefit from these partnerships… Analysis
Published on: 01/02/2024 – 13:22
9 minutes
Seeing Chilean apples, Brazilian beans or Canadian beef… flooding the European market at their expense is one of the concerns raised by French farmers Who continue to demonstrate on the highways in France Thursday, the first of February. In their view: the free trade agreements and partnerships concluded by the European Union with different parts of the world open the way to a kind of unfair competition. The European Union has already signed several free trade agreements in recent years, all of which aim to facilitate the movement of goods and services.
“These agreements aim to reduce tariffs, with maximum quotas for certain agricultural products, and non-tariff barriers,” explains Elvière Fabry, a senior researcher at the Jacques Delors Institute responsible for trade geopolitics. “These agreements also have an increasingly broad regulatory scope to enhance EU investment framework standards, intellectual property protection, geographical indications, and sustainable development standards.”
“Southern Common Market countries”
Thus some countries have a full free trade agreement with the EU because they are part of the European Economic Area. This is the case of countries such as Norway, Liechtenstein and Iceland. This allows it to enjoy the freedom of movement of goods, services, capital and individuals.
Read also: Farmers’ crisis in France: Protesters are prepared to prolong their movements and “Siege of Paris”
While other countries concluded more agreements with a variable structure with the European Union. Among them, Canada – CETA partially entered into force in 2017 – Japan, Mexico, Vietnam and even Ukraine. Most recently, in November 2023, Brussels opened the door to New Zealand with an agreement that should enter into force from 2024, also with Kenya. Negotiations are also currently underway with India and Australia.
But what crystallizes the main tensions is the draft agreement between the European Union and the countries of the Southern Common Market. It is a project that began to be discussed to conclude a trade partnership since 1990 with Argentina, Brazil, Uruguay and Paraguay to create the largest free trade zone on the planet, a market that includes 780 million people.
The food products dimension of the latest version of the text of this agreement, edited in 2019, is of particular concern to French farmers. This latest text sets quotas for the countries of the Southern Common Market to export each year, with little or no customs duties, 99 thousand tons of beef, 100 thousand tons of poultry and 180 thousand tons of sugar. In return, customs duties will be reduced for exporting many products from the EU with a protected designation of origin.
Unions denounce that while Brussels pushes farmers to accelerate the environmental transition, these agreements will open the door to huge imports, at more competitive prices, of products that do not meet the same environmental and social standards as their European counterparts. It is a kind of “unfair competition,” they say, pointing in particular to the conditions of animal husbandry practiced in South America, with the use of genetically modified feed or the use of growth-stimulating antibiotics.
Thus, the unions of all factions escalated after the European Commission confirmed, on Wednesday, January 24, “that the conclusion of negotiations with the Southern Common Market countries” is scheduled “before the end of this term.” Which means before the next European elections in June 2024.
Immediately, the majority union of the Farmers’ Union called for a “clear rejection of free trade agreements.” For its part, the Farmers Union calls for “the immediate end of negotiations” for this type of agreement.
A paradoxical outcome
“In reality, the impact of these free trade agreements varies across sectors,” says Elvire Fabry of the Delors Institute. “The pre-agreements negotiations aim to calibrate trade opening to limit the negative impact on the sectors most exposed to risks. In parallel, these latter sectors may be winners in other agreements. Ultimately, it is about finding an overall balance point.”
Read also: Five key numbers to understand the suffering of French farmers and their difficult financial situations
This disparity is most stark in the agricultural sector. “The wine and spirits sector or the dairy sector will have more gains than farmers, for example,” the economist continues. According to a report issued by the National Assembly in 2023, the wine and spirits sector, as well as the dairy sector, are in fact “the main beneficiaries of free trade agreements.”
The existence of trade agreements that make it possible to eliminate customs duty differentials is a ‘hyper-determining factor’ for the competitiveness of French wines,” the French authorities estimated in a 2021 report. The majority of free trade agreements reduce or eliminate customs duties for the export of many protected-origin and subject-matter products. Controlled, a category to which many wines belong.
On the other hand, for meat, the effects on it are less specific and clear. If the balance between imports and exports seems to favor the EU with regard to pork, poultry exports, at the same time, are decreasing under the influence of these agreements. Hence the concerns, for example, about the planned treaty with New Zealand, which stipulates the import of 36 thousand tons of sheep meat, equivalent to 45 percent of French production in 2022. As for grain production, France still enjoys a surplus Large, except for soy.
“Pressure and bargaining card”
Besides the impacts on agriculture, “this debate on free trade agreements must take into account other issues,” Elvier Fabbri insists. We are in a context in which “the European Union is looking to secure its supplies, especially of strategic minerals. We must not neglect Brazil’s natural resources of lithium, cobalt, graphite… etc.”
Therefore, the agreement with Chile should allow the export of strategic minerals in exchange for agricultural products. For its part, Germany is a strong defender of the agreement with the Southern Common Market countries, as it sees it as an outlet for its industrial sectors, as the specialist explains.
“In almost all free trade agreements, agriculture is always a bargaining chip in exchange for the sale of cars or Airbus planes,” laments Vermonique Marchessault, Secretary General of the Farmers’ Union, to Agence France-Presse.
The agreement with New Zealand, for example, will “destabilize the lamb market in France,” laments Michel Beaudoin, president of the National Sheep Federation, in a statement to Agence France-Presse. “We are not against exchanges, we know that Germany must export its cars, that France must sell wheat, and we are told that we need an ally in the Pacific against China and Russia. But it should be in exchange for giving us a helping hand, to produce mutton on A high level,” according to Elvier Fabry.
Finally; “There is an undoubted bet on influence.” “These agreements also remain a means for the European Union to strengthen its environmental standards and lead its partners on the path of environmental transformation,” this expert hopes, “even if this is subject to negotiation.” An argument also shared by the Minister of Agriculture, Marc Finoux: “In most cases, the agreements have been beneficial, including for French agriculture,” he said on the X platform, before adding: “And they would be more beneficial if we imposed our own standards.”
Towards suspending negotiations with the countries of the Southern Common Market?
In the face of farmers’ anger, the French government has constantly wanted to reassure them despite the revival of negotiations through a meeting between Emmanuel Macron and Brazilian President Lula da Silva last December. While Prime Minister Gabriel Attal confirmed on January 26 that “France clearly opposes signing the treaty with the countries of the Southern Common Market.”
On Monday evening, the Elysee Palace confirmed that negotiations had been halted in Brussels due to France’s opposition. Eric Mamer, spokesman for the European Commission, admitted that the conditions “were not met” for the conclusion of the negotiations. But the discussions will continue.”
Before it can be formally adopted, the agreement must be voted on unanimously in Parliament, then ratified individually by the 27 EU member states.
French text: Cyril Cabo | Arabic text: Hussein Amara
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