Mercosur deal upsets French farmers

The EU made some last minute concessions on agriculture to get the trade pact with Mercosur signed after 26 years, but farmers are still not happy

Brussels won over waverers including Italy with extra subsidies and possible bans on some agricultural imports. The EU also agreed safeguards to temporarily suspend tariff exemptions for certain agricultural products if imports surge or prices drop. Transition periods for removing tariffs range up to 30 years.

French farmers were still strongly opposed and more than 5,000 of them and 750 tractors demonstrated in Strasbourg leading to clashes with riot police outside the European Parliament.   They also set up road blocks outside the ports of Cherbourg and Le Havre and stopped container lorries.

Beef imports into Europe will be limited to 99,000 tons a year and poultry to 180,000 tons, but European farmers complain that their Mercosur counterparts face less stringent regulations on animal welfare and pesticides.   They also complain that meat from there contains antibiotics and growth hormones,

In an article on the deal, the Spectator points out that there were 1.6 million farms in France in 1970 and today there are just 450,000, but some of us might see that as an efficiency gain.

However, the prospect of an EU trade deal with India is likely to lead to further tensions with French farmers  Meanwhile, the Federation of German Industries has praised the deal as a strong signal for free trade.

Can the EU borrow the money it needs?

Professor Alan Matthews looks at the EU's capacity to borrow in the light of the new budgetary framework: https://capreform.eu/the-role-of-borrowing-in-the-eus-mff-budget-discussions/

Key issues for agricultural stakeholders are

1. Whether the EU should be endowed with permanent borrowing powers.

2. How to expand the EU’s own resources.

• 3. Whether agriculture and rural development might benefit from the proposed Catalyst Europe loan programme in the next MFF.

Bleak outlook on US-EU trade relationship

Professor Alan Matthews provides an in depth authoritative look at the US-EU trade relationship in 2025: https://capreform.eu/navigating-the-eu-u-s-trade-relationship/

He expects the relationship to break down in 2026.  How should the EU respond?  There aren't many or indeed any good choices.   Retaliation is not very effective given the EU's limited ability to inflict pain on the US economy.

However, that does not mean a passive acceptance of the status quo.   Matthews argues:'The necessary response is to reduce our dependencies to allow more room for manoeuvre in any future stand-off, recognising that this is easier said than done.'