EU offers farmers extra funds to quell anger at Mercosur trade deal
Sign up now: Get ST's newsletters delivered to your inbox
Thousands of farmers protested in Brussels in December over the South American deal, which they say will result in a flow of cheaper goods from agricultural giant Brazil and its neighbours.
PHOTO: REUTERS
Follow topic:
- EU offers farmers €45 billion early access to funds to ease concerns over the Mercosur trade deal, aiming for a January 12 signing.
- Italy and France previously blocked the deal over cheap imports, while Germany and Spain support it to boost EU exports.
- The Mercosur deal, 25 years in the making, would create a major free-trade area but raises fears among EU farmers.
AI generated
BRUSSELS - The EU on Jan 6 offered a carrot to farmers angered at a trade deal with South American bloc Mercosur, promising to unlock funds for the sector as it seeks to get the accord over the line.
The commission said it plans to tweak its budget proposal for 2028-2034, which has come under fire from agricultural groups, to allow farmers early access to around €45 billion (S$67 billion).
The move comes amid a push to ease the qualms of some countries over the Mercosur deal, which Brussels hopes to ink next week.
It was welcomed by Italy, which holds the deciding vote on the accord.
“This is a positive and significant step forward in the negotiations that will lead to the new EU budget,” said Italian Prime Minister Giorgia Meloni.
More than 25 years in the making, the accord would create the world’s biggest free-trade area, boosting trade between the 27-nation EU and the bloc comprising Brazil, Paraguay, Argentina and Uruguay.
But it has alarmed many European farmers who fear they will be undercut by a flow of cheaper goods from agricultural giant Brazil and its neighbours.
Thousands protested in Brussels
In a Dec 6 letter, EU chief Ursula von der Leyen unveiled budget changes she said would “provide the farmers and rural communities with an unprecedented level of support”.
The letter was released as EU agriculture ministers are due to gather in Brussels on Jan 7 for an extraordinary meeting to get the Mercosur deal over the line.
Plans to seal the accord in December ran into a late roadblock as heavyweights Italy and France demanded a postponement over concerns for the farming sector.
Germany and Spain are strongly in favour of the agreement, believing it will provide a welcome boost to their industries, hampered by Chinese competition and tariffs in the United States.
The deal would help the EU export more vehicles, machinery, wines and spirits to Latin America at a time of global trade tensions.
In return, it would facilitate the entry into Europe of South American meat, sugar, rice, honey and soybeans. AFP
