It didn’t take long for yet another company of European origin to fall out with Brazilian agribusiness. After the Danoneit was the turn of Carrefour get into a tight skirt around here.
The character of the time was Alexandre Bompard, Global Group CEO and president of the board of directors of Carrefour in Brazil. In the message sent to his French compatriots on Wednesday (20), the executive stated that the company will not sell any meat produced in Mercosur in France.
“We heard the despair and anger of farmers at the draft free trade agreement between the European Union and Mercosur and the risk of flooding the French market with meat production that does not respect their requirements and standards,” said Bompard, in letter addressed to Arnaud Rousseau, president of FNSEA, the French equivalent of our CNA (Brazilian Agriculture and Livestock Confederation).
As expected, the speech went down very badly in Brazil. Following the events, Carrefour went public to state that the measure only applies to its own units in France, and that Carrefour do Brasil will continue to sell meat produced… by Brazil. “At no point does it (Bompard’s speech) refer to the quality of the Mercosur product, but only to a demand from the French agricultural sector, currently in a context of crisis.”
The Brazilian Ministry of Agriculture came to field reject criticism do chairman of the Brazilian Carrefour. “The Ministry regrets this stance which, for protectionist reasons, negatively influences the understanding of consumers without any technical criteria that justify such statements.”
Context: For 25 years, the European Union and Mercosur (the economic bloc today formed by Brazil, Argentina, Paraguay and Uruguay) have been negotiating a free trade agreement – meaning exports and imports free of tariffs for a basket of products , some with a quota and others with 100% free entry.
In 2019, things looked like they were going to move forward. Node trade agreed five years ago, European industrialized products, such as automobiles, machinery and clothing, ended up benefiting. In return, South American agribusiness products became easier to access the Old Continent. But the document has been sitting on the table of both blocks, with little progress since then.
The biggest obstacle is precisely in Mercosur agribusiness products. The European Union tried to shield itself by imposing very narrow quotas of meat and sugar that could enter the region tariff-free and freeing up everything for foods that farmers there don’t have as much tradition in, like fruit.
Even so, it was not enough to contain the emotions of European rural producers, especially the French and Germans, two of the leaders in receiving EU subsidies through the Common Agricultural Policy (CAP)which will distribute €387 billion from 2021 to 2027.
It is worth highlighting that the French government has been more vocal against the trade agreement than the German one which, facing a crisis in its automobile industrystarts to see the pact as a good market opportunity for the sector.
In the narrative game, European farmers claim that they would lose competitiveness in the face of products that would arrive cheaper because they did not respect the same legislation as them. On the South American side, the argument is seen as a lack of efficiency, protectionism and sovereign intervention (since they want to impose European legislation according to the logic of Mercosur, as already we explain in this text here).
The fact is that protests by French farmers have intensified in recent days as Mercosur has begun to say that the trade agreement is about to get underway again. Even if Mercosur approves the text on its side, it is worth remembering that the pact needs to be endorsed by all countries individually (we are talking about more than 30 nations).
So, everything indicates that we will have many chapters of crisis ahead.
