'Bigger picture': EU-Mercosur trade deal would 'open door for a lot of French agricultural exports'

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00:00French farmers have been protesting the prospect of a free trade deal between the EU and South

00:07America's Mercosur.

00:10They say it would undercut their own agricultural output.

00:15Now France's president, Emmanuel Macron, opposes the agreement.

00:19But a majority of European allies are for it, including the likes of Germany and Spain.

00:26Andrew Hillier has the story.

00:30French farmers are virtually unanimous in opposing the Mercosur trade deal.

00:34Both the EU and Mercosur reached an initial agreement back in 2019, but it was never finalized

00:40after opposition from farmers and some European governments.

00:44The free trade deal aims to boost commerce between the European Union and the five countries

00:48that make up Mercosur, namely Brazil, Argentina, Uruguay, Paraguay and Bolivia.

00:54It would gradually eliminate customs duties on trade between the two blocs.

00:58The EU exported 45 billion euros worth of goods to Mercosur in 2021.

01:04French government officials say it would allow the import of an additional 99,000 tonnes

01:08of beef and 180,000 tonnes of poultry.

01:12But French farmers say South American exporters would have an unfair competitive edge.

01:17Farms are bigger and producers are less bound by strict environmental and health regulations

01:21than their EU counterparts.

01:23Wages are also lower than in Europe and that could force prices down for European farmers.

01:28In the end, it's like unfair competition.

01:33Our products are very standardized, very controlled, very closely monitored and products from all

01:37around the world can arrive with completely different standards of production.

01:42The French government, racing to extinguish a growing protest movement, also opposes the

01:47deal.

01:48It's urged other EU countries to refrain from signing it.

01:51Analysts say it could accelerate deforestation in the Amazon rainforest by up to 5 percent

01:56per year.

01:57The deal has united politicians, farmers and environmentalists in a rare common front opposed

02:02to its ratification.

02:03Well, with us, he's a former US diplomat, Chris Hagedorn is adjunct professor of global

02:09food politics at the French political science institute Sciences Po.

02:13Thanks for being with us here on France 24.

02:15Absolutely.

02:16Pleasure to be here.

02:18First off, can you reassure those French farmers?

02:20Are they correct in staging their picket?

02:23Look, French farmers are going to defend their interests as they always have done very vocally

02:29and very effectively.

02:31I wouldn't expect them to do anything else.

02:34But this is an EU broad agreement.

02:38They have been under a lot of pressure over the last few years.

02:41So I think there's a sense of insecurity that the unknown is quite scary.

02:49Because we saw a few years ago when there was a deal on milk, how badly the French farmers

02:57got hit when dairy prices went through the floor.

03:01It feels like for them a race to the bottom when it comes to standards on sanitary and

03:07health on beef, which they have to apply and are more lax in South America.

03:13I think they are right to bring these issues up.

03:16I think the ideal outcome would be that the European position would actually raise standards.

03:23The question about deforestation is on a lot of people's minds and the delay currently

03:28in Brussels.

03:29One year, there's efforts to delay it further.

03:33Those of us who are in this food politics sector are really concerned that we have a

03:38lot of work to do to feed the world.

03:41The numbers are going up, hungry, malnourished.

03:44Perhaps this isn't the right direction that we're seeing coming out of this deal in some

03:49ways on standards and environmental protections.

03:53Because there were farmers unions from the left and the right, and they're all against

03:57it for different reasons, as you just spelled out.

04:02There were German farmers who crossed the border in Strasbourg and picketed alongside

04:06their French counterparts.

04:08But Germany and Spain are in favor of the deal.

04:12Why?

04:14Germany as a country, not necessarily all the German farmers, but Germany sees benefits

04:19for a trade deal.

04:20These trade deals are huge.

04:22They cover everything, certainly beyond agriculture.

04:25So German car manufacturers, service providers, many others are set to benefit quite significantly

04:32from a trade deal.

04:34So overall, this is what Brussels is looking at, the big picture.

04:38Obviously, if you're looking to continue being a political power in Paris, you have to take

04:47into consideration a very fraught political scene with agriculture interests, very strong,

04:52very prominent and very vocal.

04:55So it's a question of whether you're looking at the big picture or more parochial interests.

05:01Again, I get back to the original question.

05:03Is it an existential threat for French farmers?

05:07French farmers are saying many of them will go under with this deal.

05:11My own opinion is no, that it's not, that this is a deal that will be implemented over

05:15a number of years.

05:17That the amounts of beef, for example, are relatively small in volume terms.

05:24I think there is a sense that farmers are under stress and under pressure, and we've

05:29seen that through COVID-19.

05:31We've seen that through higher import costs as an outcome of the Russian invasion of Ukraine.

05:37So I think there is quite an insecurity.

05:40Farming, as we know, is one of the hardest industries to be in, and they've had their

05:45backs to the wall for some time.

05:47So the concern is real.

05:50Whether that plays out in terms of loose loss of jobs, loss of welfare, I think there are

05:59safeguards in place that will protect them.

06:02And I think it opens the door for a lot of French agriculture exports.

06:05This is where that balance has to be seen in the bigger picture, right?

06:09Wines, cheeses, liqueurs, the high value add, this is where French industry will actually

06:17stand to benefit quite significantly.

06:19All right, so there's pain for some and gains for others.

06:24Chris Hagedorn, a few years back, there was this trade deal between the EU and Canada.

06:29It got over the line, but boy, was it a heavy lift.

06:32People said the era of free trade deals is over, and yet here we are today.

06:37By the way, I don't know if you heard, there's a new president in the United States who doesn't

06:42like trade deals.

06:43President-elect, yes.

06:45So is this the last one, the Mercosur deal?

06:51I wouldn't say it's the last one.

06:53I think there will be some interesting bumpy road ahead.

06:57I was in touch with a friend at WTO in Geneva today looking to see what the prognosis is.

07:03But it's going to be, it's definitely going to be bumpy.

07:06I wouldn't say it's the last deal, but this is a huge, huge deal, right?

07:10This is 25 years in the making, it's 800 million people in these markets.

07:18This is significant.

07:19And I think if you look at what happened in the U.S. with NAFTA, Canada, Mexico, U.S.,

07:26huge disruptions that weren't really thought through at the time when they were being negotiated

07:31and implemented.

07:32But you see the impacts over time, that change is significant, and a lot of the industry,

07:39heavy industry, manufacturing industry in the U.S. was gutted, moved south to Mexico.

07:45Those do have major social impacts that I think politicians are wise to be thinking

07:51about over a longer term.

07:53The names were changed, but the one you referred to in North America, it was never really rolled

07:58back, was it?

08:00No, hardly.

08:01No, it wasn't.

08:04So again, we heard our correspondent Ian Camazin in Rio there talking about the G20.

08:09There's this Joe Biden pledging a record $4 billion for the World Bank's poorest countries

08:16Meanwhile, at the U.N. climate summit in Azerbaijan, they're desperately trying to reach a deal

08:22on climate finance this time.

08:26There's a sense that they're kind of trying to front load all the financing before Donald

08:30Trump comes to power.

08:32Is that going to work?

08:34I would think that maybe some of the lessons that come out of this election in the United

08:40States show that despite the $2 trillion stimulus package by the Biden administration

08:48on top of what was spent over near half a trillion with the COVID-19 response, in fact,

08:57the inflationary pressures were unleashed.

09:01The prices that went up, that's what the electors were saying was the reason many of them voted

09:08for Donald Trump, because they saw these prices go up and not come back.

09:12Their wages were relatively stagnant.

09:16Things are coming back to a more relaxed economic situation now, but it's too late.

09:23Those that overspending, the amount of money that the U.S. has put towards domestic stimulus

09:30in the light of its national debt, yeah, I think Trump is definitely going to make some

09:36big changes on both trade and finance.

09:39But it feels like these are sort of 11th hour deals that they're working on at the G20,

09:45at the UN Climate Summit.

09:47To what effect?

09:48Are you able to get around the United States?

09:53What's going to happen after January 20th?

09:55Yeah.

09:56Well, this is a million dollar question.

09:58I think there will be some major confrontations coming up.

10:03I think this deal, the EU-Mercosur deal, may in fact antagonize Washington with a

10:10new administration coming in.

10:13I think it will affect overall relationships.

10:16I think the Europeans need the U.S. at this point tremendously in light of the security

10:23threats and defense expenditures, et cetera.

10:26I think everyone sees where Trump is going.

10:29He has a pretty good track record of following up on what he says on the campaign trail.

10:35So I think there's a bumpy road.

10:36I think the WTO is going to be in the crosshairs for Washington.

10:41I think the effort to get the African group is trying to get the WTODG a second term and

10:46changing the rules to do this in advance of the Trump administration.

10:51So I think there's just going to be a lot of turbulence coming up.

10:53I think these trade deals will be reviewed very carefully.

10:56Can multilateralism work despite an isolationist U.S. president?

11:03I think it can, but I don't think the U.S. can walk back on its obligations to be president.

11:08It did for the Paris Climate Accords first time around.

11:11That's true.

11:12And they very well may back out again.

11:14And that threat is being repeated by others, as you know, including from Argentina.

11:20So it doesn't mean that progress can't be made.

11:24So the U.S. will continue to, I think, progress, particularly on renewable energies, particularly

11:31on its agriculture.

11:32It has to sell its agriculture abroad domestically.

11:36Trump is relying on farmers, but farmers need to get their product overseas where their

11:42livelihoods and incomes depend on this.

11:45All right.

11:46May thanks Chris Hagedorn for being with us here on France 24.

11:49Pleasure.

11:50Stay with us.

11:51There's much more to come.

11:52Plus, the day's business and sports.

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