How the new pres­i­dente of Brazail can help EU farm­ers

Irish Examiner - Farming - - COMMENT - Stephen Cado­gan

The po­lit­i­cal trends that brought Brexit and Don­ald Trump aren’t all bad for farm­ers here.

Brexit is def­i­nitely bad news.

And the global trade war which Don­ald Trump may trig­ger could bring a huge eco­nomic shock.

But EU dairy farm­ers could yet come out on the win­ning side of that war, be­cause Trump has left his own coun­try’s dairy in­dus­try (the world’s sec­ond big­gest) iso­lated, and is likely to halt its milk pro­duc­tion in­creases ev­ery year this cen­tury, to reach nearly one fifth of the world’s es­ti­mated to­tal pro­duc­tion.

Now, dis­rup­tive po­lit­i­cal trends have brought a new Trump of the Trop­ics, in the shape of Jair Bol­sonaro, the newly elected Pres­i­dent of Brazil, by a sub­stan­tial elec­toral mar­gin.

He will take of­fice in Jan­uary, af­ter an elec­tion in which his “Let’s make Brazil great” motto copied Trump’s elec­tion slo­gan.

He has pledged to copy one of Trump’s most con­tentious for­eign pol­icy ac­tions by mov­ing the Brazil­ian Em­bassy in Is­rael from Tel Aviv to the con­tested city of Jerusalem. Like Trump, Bol­sonaro has also strongly crit­i­cised the United Na­tions.

His two big­gest chal­lenges are pulling the coun­try out of its eco­nomic dol­drums, and crack­ing down on ram­pant crime and cor­rup­tion. But the good news for farm­ers here is that Bol­sonaro seems un­in­ter­ested in a free trade deal be­tween the Mer­co­sur group of South Amer­i­can coun­tries and the EU. In­stead, he has said he wants to re­duce Brazil’s en­gage­ment with re­gional trade blocs such as Mer­co­sur, favour­ing im­proved ties with Wash­ing­ton.

As a re­sult, the pres­i­dent of Uruguay, Tabare Vazquez, has pre­dicted as “very dif­fi­cult” agree­ment on a free trade treaty be­tween Mer­co­sur and the EU.

The treaty talks be­tween the EU and Mer­co­sur (Brazil, Ar­gentina, Uruguay and Paraguay) were al­ready at a stand­still, with agri­cul­tural quo­tas among the main stum­bling blocks to progress. EU trade ne­go­ti­a­tions with the Mer­co­sur coun­tries have been go­ing on since 1999, and have failed time af­ter time. Now, Bol­sonaro’s elec­tion (a seis­mic shift to the po­lit­i­cal right in a coun­try gov­erned by left­ist par­ties for most of the past 15 years) could be the ob­sta­cle to jinx them once again.

That’s mu­sic to the ears of EU farm­ers, af­ter EU ne­go­tia­tors anx­ious to agree their most lu­cra­tive trade deal ever of­fered the South Amer­i­cans 99,000 tonnes of beef ac­cess to the EU at low im­port tax rates. With Ir­ish farm­ers al­ready fac­ing the Brexit loss of the UK mar­ket for 52% of their beef, a Mer­co­sur trade pact­would have been the last straw. Lucky for them, the South Amer­i­can ne­go­tia­tors asked for more, ap­par­ently seek­ing pref­er­en­tial ac­cess to EU mar­kets for 150,000 tonnes per year of their beef.

The deal would also in­clude the EU tak­ing 150,000 tonnes per year of Mer­co­sur sugar, free of tar­iffs.

Now, it may all come to noth­ing, with Bol­sonaro’s com­ments in­clud­ing hints about pulling his coun­try out of the Paris cli­mate Ac­cord. With the EU say­ing it will sign trade deals only with Paris cli­mate change ac­cord sig­na­to­ries, that would blow trade talks right out of the water — un­less Europe is re­ally des­per­ate to swing the es­ti­mated €21-29 bil­lion it could gain through in­creased ex­ports of in­dus­trial goods to South Amer­ica.

With Bol­sonaro also mak­ing elec­tion prom­ises to farm­ers that he’d curb the polic­ing of the sec­tor by Brazil’s en­vi­ron­ment agency, and per­haps open up pro­tected indige­nous ter­ri­to­ries in the Ama­zon to farm­ers and log­gers, he is dis­tanc­ing him­self fur­ther and fur­ther from EU prin­ci­ples, and EU farm­ers can breathe an even deeper sigh of re­lief, as Mer­co­sur trade talks prospects dwin­dle, not for the first time in 19 years.

Like the US and the UK, Bol­sonaro seems set to iso­late his coun­try from in­flu­ences such as the United Na­tions, China and large ne­go­ti­at­ing blocs like the Eu­ro­pean Union. But this time, it is good news for EU farm­ers

“The treaty talks be­tween the EU and Mer­co­sur (Brazil, Ar­gentina, Uruguay and Paraguay) were al­ready at a stand­still, with agri­cul­tural quo­tas among the main progress” stum­bling blocks to

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