EU-Mercosur payoff brings into question EU trade commitment

The National Farmers’ Federation (NFF) has expressed concern that the European Union’s (EU) latest farmer subsidies, brought forward to sign a trade deal with South American countries, will further unbalance international trade scales.

European leaders voted to authorise the signature of the EU-Mercosur Partnership Agreement over the weekend, following an offer on agricultural subsidies by the European Commission.

NFF President Hamish McIntyre described it as a material development that sets a worrying precedent.

“While the NFF welcomes more global trade, it is understood that the passing of the vote only came about following an agreement to bring forward nearly $80 billion (AUD) in subsidies to their agricultural sector,” Mr McIntyre said.

“Bringing forward enormous EU subsidies to pass a trade deal with the South American Mercosur countries raises concerns for Australian farmers.

“As negotiations for our own free trade agreement with the EU continue, the NFF is worried the EU will continue to offer subpar access for Australian producers, and could deploy more billion-dollar subsidies to their producers.

“Such an advancement of billions in production-distorting subsidies only increases the uneven playing field between Australian producers and their European counterparts, putting Australian farmers at a huge competitive disadvantage.

“Australian farmers are among the least subsidised in the world and embrace free markets and trade to drive productivity, sustainability and food security outcomes.

“The EU’s decision is also worrying from an environmental standpoint – recent research by the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) found subsidies, such as those provided for by the EU Common Agricultural Policy, can lead to significant negative environmental outcomes.

“We are calling on the Australian Government to directly raise these concerns with their European counterparts and again reject any trade deal that does not provide significantly increased access for our redmeat, dairy, sugar, and rice producers,” Mr McIntyre said.