Breeders fear EU-Mercosur pact will affect Belgium business

A Limousin breed cow is held by the bridle after a competition during the Libramont outdoor agricultural fair in Libramont, Belgium. (AFP)
Updated 29 July 2019

Breeders fear EU-Mercosur pact will affect Belgium business

  • Farmers at Libramont are unconvinced and pessimistic for the future despite the impressive size and quality of their livestock, proudly on display
  • Farmers to face competition from the vast ranches of South America

LIBRAMONT, BELGIUM: The Libramont agricultural show is the highlight of the year for Belgium’s proud beef industry, but this year even the sunny skies of western Europe’s record heatwave couldn’t chase one looming shadow away.

The breeders parading their famous Belgian Blue beef cattle will soon face competition from the vast ranches of the South American pampas.
Resistance is building among some European farmers against a draft trade deal reached by EU officials with the Mercosur group — Argentina, Brazil, Paraguay and Uruguay.
After 20 years of negotiations, officials in Brussels — 140 kilometers (80 miles) northwest of the pastures of Ardennes — are very pleased with the accord that could save European exporters €4 billion ($4.5 billion) in duties per year.
But, as member states decide whether to ratify and implement the deal, EU farmers and environmentalists are less excited.
Beef breeders in particular say that EU quality standards are higher than those in Latin America, and fear a flood of cheap meat will drive them to the wall.
“We are already close to over-production in all of Europe and in Wallonia as well ... The last thing we need is Brazilian meat, especially when we see the conditions in which it is produced,” warns Hughes Falys, beef producer and farmers’ union spokesman.
“Mercosur isn’t a case of ‘Yes, maybe’ or ‘Yes, if’. Mercosur is ‘No!’,” declares the Wallonia regional Farming Minister Rene Collin to loud applause.
Collin might not be a regular on the G20 summit circuit or at WTO get-togethers. But the world’s trade negotiators may find they have to listen to the French-speaking Belgian region of Wallonia, home to only 3.6 million people.
In 2016, the region held up Belgium’s signature of the CETA trade deal between the entire EU and Canada, and it could make life complicated for Brussels once again.
“We made them evolve CETA. We made them put important safeguard clauses in there. We’ll be just as vigilant when it comes to Mercosur,” Collin told AFP at the four-day fair and trade show.

BACKGROUND

• Resistance is building among some European farmers against a draft deal reached by EU officials with the Mercosur group.

• After 20 years of negotiations, officials in Brussels are very pleased with the accord that could save European exporters €4 billion in duties per year.

• But, as member states decide whether to ratify and implement the deal, EU farmers and environmentalists are less excited.

And he warns that the regional Parliament and Belgium’s members of the European Parliament could vote against ratification.
The European Commission has tried to reassure farmers, so far to no avail.
The deal contains two big promises to the sector: Increased beef imports will be limited to 99,000 tons a year, and €1 billion will be set aside for European farmers.
Farmers at Libramont are unconvinced and pessimistic for the future despite the impressive size and quality of their livestock, proudly on display.
“Lots of older farmers find it difficult to sell up, especially livestock farmers,” says Beatrice Ghyselen, a 61-year-old farmer from Vedrin, outside the Wallon capital Namur.


Despite agreement, China purchase of US agriculture lags

Updated 10 August 2020

Despite agreement, China purchase of US agriculture lags

  • The two sides are set to meet on Saturday to discuss the deal, American media says

NEW YORK: Seven months after the United States and China signed a preliminary agreement to temper their trade war, Beijing’s purchases of US agricultural goods have yet to reach the deal’s target.

As President Donald Trump readies for a tough reelection battle in November, US media reported the two sides are set to meet beginning August 15 to discuss the deal, which calls for China to sharply increase buying American goods and services this year and next.

But according to data compiled by the Peterson Institute for International Economics (PIIE), Chinese agricultural purchases at the end of June were far from where they should be at this point in the year.

They had reached only 39 percent of their semiannual target, according to US figures, or 48 percent, based on Chinese figures.

“If we get back to what the level of trade was in 2017, we’ll be lucky,” said Chad Bown, a PIIE senior fellow who authored the study, referring to the year before the trade war began.

Under the deal’s terms, China agreed to increase agricultural imports $32 billion over the next 2 years from 2017 levels.

Chinese orders for corn and soybeans have increased since mid-July, with Beijing buying just over 3 million tons of American oilseeds between July 14 and Aug. 7, according to US Department of Agriculture data.

At the end of July, the United States reported the largest-ever daily order by China for its corn, of 1.9 million tons.

The announcements were a relief to US farmers, who are expecting a bumper crop this year and need to find buyers to take it.

They also came at a time of high political tension between the two countries, after the Trump administration authorized sanctions against several Hong Kong leaders over the rights crackdown in the city, and restrictions on Chinese apps WeChat and TikTok.

The Chinese “realize we’re not being the best of buddies right now, but they need the products and they’re gonna take as much as they need,” said Jack Scoville, agricultural market analyst for Price Futures Group.

It’s possible that Beijing will change its orders from buying this year’s harvest to next year’s.

But analysts warn that any orders could be called off before the ships carrying them leave port.

Brazil and Argentina, two of the world’s largest soybean and corn producers, are starting their harvests next spring, said Brian Hoops, president of the brokerage firm Midwest Market Solutions.

China “could cancel all these purchases they made in July and buy at much cheaper prices if that’s available to them,” Hoops said.

The trade deal dubbed “phase one” and signed in January has managed to survive both the tensions and the sharp global economic downturn caused by the coronavirus pandemic, which has badly hit international trade.

US Trade Representative Robert Lighthizer in June said China would follow through on its commitments, while Washington would also pursue a “phase two” trade deal that “will focus on issues of overcapacity, subsidization, disciplines on China’s state-owned enterprises, and cyber theft.”

Bown said any success in getting China to buy not just farm but also energy and manufactured goods, would aid Trump in his reelection campaign.