Polish perspective on EU-South America trade deal

Farmers protesting against the EU-MERCOSUR free trade deal in front of the EU headquarters in Brussels. Photo: Alexandros Michailidis / Shutterstock

During the Cold War, economic relations between the member states of the European Communities and Latin America were predominantly shaped by geopolitical considerations. Latin American countries, under the influence of the United States, engaged in a long-standing partnership with the West primarily functioning in a “raw material base” capacity. This involved the export of agricultural goods and minerals from Latin America, while these countries imported finished products for both consumer and industrial use.

The end of the Cold War, coupled with the acceleration of globalization, ushered in new prospects for a more comprehensive economic collaboration. The disintegration of the socialist bloc and the subsequent establishment of relations between Western and Eastern Europe facilitated the formation of the European Union. Concurrently, Argentina and Brazil, along with Paraguay and Uruguay, emerged as the driving forces behind the advent of an economic union and common market modelled after western principles and under the banner of MERCOSUR. Economically, both frameworks were based on a shared vision: the promotion of free trade in goods, services and capital among member states, achieved through the elimination of customs duties and non-tariff barriers, the implementation of a common external tariff and the establishment of a unified trade policy towards external countries or economic entities.

Although the inaugural EU-Latin America Summit in 1999 underscored the commitment of European institutions to forge partnerships with nations in the Global South, the primary focus remained on cultivating relationships with the post-socialist states of Central and Eastern Europe, facilitating their preparation for EU membership rights and obligations. Latin American nations also refrained from exerting pressure, opting instead to enhance “South-South” relations with their neighbouring countries.

Certainly, the lack of a comprehensive agreement did not hinder the actual relations between the EU and the member states of MERCOSUR. By 2019, when the working groups of both entities revisited the topic of establishing “common rules”, the EU had already emerged as the principal foreign trade partner for Latin American countries. Amidst a growing chorus of economic nationalism resonating from an increasing number of global capitals, the prospect of formalizing such rules became appealing to stakeholders on both sides of the Atlantic. In Asuncion, there was an expectation that these developments could pave the way for advantageous agreements with other significant partners, notably the European Free Trade Association, Canada and the United States, where the unpredictable political climate at the time raised concerns about potential adverse surprises for the Southern Hemisphere.

In 2019 the European Commission has tentatively agreed with the MERCOSUR countries on the essential terms of the new agreement. Emphasis was put on reducing tariffs on industrial goods from the bloc, as well as liberalizing trade in agricultural products within the European Union – an area that has traditionally been protected by the EU acquis. However, progress has slowed down for some time, primarily due to opposition from France and other EU countries, which demanded higher environmental protection standards from the right-wing government of Brazil and expressed concerns about the potential impact on farming. And Poland was no exception to the latter.

Stronger in unity

In Poland the agricultural sector has historically been one of the most politically engaged segments of the population. Various ideologically diverse political movements are fiercely competing for the support of rural voters, noting that enhancing the role of domestic agricultural producers is essential, particularly in light of the numerous challenges facing global food security. Poland aims to position itself as the “breadbasket of the Union” amidst these challenges.

In the contemporary Polish history, the Polish Peasant Party (PSL) has been a prominent representative of agricultural interests. This party, one of the oldest political movements in the country, has endured even through the communist era and currently participates in the ruling coalition. In contrast, the Law and Justice party (PiS), which held power from 2015 to 2023 and which still has close ties to the head of state with Andrzej Duda still as Poland’s president, now remains the opposition in the parliament. Both parties maintain significant support among the traditionally conservative rural populace and consistently critique the EU’s common agricultural policy, irrespective of their governmental status. A more comprehensive analysis of the platforms of these political movements is available in the author’s material prepared for the ADASTRA Think Tank (in Ukrainian).

Except for the traditional “headache” – grain exports from Ukraine – the Polish agricultural world considers the prospect of competition from cheap agricultural products from the MERCOSUR countries to be a significant economic threat. Mainly, the largest countries of the association – Argentina and Brazil – are known for their significant volumes of food production, especially meat and soy. Easier access of such products to the European market under the terms of the new agreement could well lead to a decrease in purchase prices and a decrease in demand for the products of Polish farmers.

The latter are required to adhere to stringent European legal standards, which impose high expectations regarding product quality, animal welfare and environmental sustainability. These inevitably increase production costs. In contrast, the absence of similar regulatory obligations for farmers in MERCOSUR countries could create an uneven competitive landscape for Polish producers.

At a press conference on November 26th last year, leading representatives of the government’s PSL party – Deputy Prime Minister and Minister of Defence, Władysław Kosińiak-Kamyś, Minister of Development and Technology Krzysztof Paszyk and Deputy Minister of Agriculture and Rural Development Stefan Krajewski – presented a negative conclusion regarding the compliance of the proposed draft agreement with the interests of Polish society.

Paszyk noted that the agreements between Brussels and MERCOSUR should focus on finding a balance among the needs of industry, agriculture and European consumers, especially regarding food security. This seems to address worries about Polish producers potentially losing out because they cannot meet European production standards while competing with the lower prices from Latin America. Krajewski pointed out that Warsaw will only back an agreement that enforces the same standards for products from both the EU and MERCOSUR countries. Polish Minister of Agriculture Czesław Siekierski has previously raised concerns about the difficulty of implementing protective measures, or “emergency brakes,” that could limit the import of cheaper, but possibly lower-quality, products from South America if needed.

The actions of the ruling parties are under close scrutiny by voters. Marcin Sobczuk, who leads the Oszukana Wieś (“Deceived Village”) farmers’ union, pointed out that farmers are united in their negative view of the agreement and hope it won’t go through. He noted that the agricultural workers of the Union “have the highest chemical costs in the EU, can’t use GMOs, while more and more substances are being taken off the approved list.” He argued that Brussels is harming itself by “suffocating” farmers in EU countries while favoring those from outside.

Coming back as a winner

Ursula von der Leyen, head of the European Commission, announced during her visit to Montevideo in December that all essential conditions for the upcoming agreement had been satisfied. She reassured European farmers that their concerns would be considered in the drafting process and the Commission’s press office highlighted that the high standards for quality and environmental protection (stipulated by the Paris Agreement) are guaranteed. If these standards are not met, the agreements could be suspended for valid reasons.

EU law outlines a multi-step process for any EU agreement to take effect. Initially, it must receive approval from 55 per cent of the member states in the EU Council, which must also represent 65 per cent of the EU total population. If at least four countries do not support the proposal, it will be deemed rejected.

Currently, Warsaw has secured support from Paris where, the president and parliament are largely united against the deal. Sophie Prima, who oversaw international trade in Michel Barnier’s interim government, pointed out that “von der Leyen’s conditions” only bind the Commission, not the member states. As a major producer of poultry and beef, France is keen to maintain its position amid ongoing political, economic, and environmental challenges, so it is aligning with Poland to oppose the deal.

The issue of finding two more partners to achieve a “blocking minority” remains relevant. Positive signals are coming from Rome, where sources in Prime Minister Giorgi Maloni’s office promise a negative reaction to a draft agreement that would not contain “reliable safeguards” for the interests of European farmers. Analysts also expect support from the Netherlands, where, as in Poland, one of the coalition parties is focused on supporting farmers, as well as Austria and, possibly, Ireland. The governments of these states will have to overcome the resistance of Olaf Scholz and Pedro Sanchez, who currently see more advantages than disadvantages in the agreement, hoping to make its conclusion a kind of springboard for strengthening the positions of the West in Latin America, which is of interest to Beijing.

Conclusion

The potential trade deal between the EU and MERCOSUR is a significant part of a larger effort to strengthen cooperation between these regions based on principles that are clear and essential for a progressive 21st-century world. These principles include democracy, a free market economy, respect for human rights and fundamental freedoms, and a responsible approach to the environment, contrasting with a consumer-driven mindset.

For the EU to maintain stability in these challenging times, unity is crucial. Member states need to engage in open and respectful discussions about any obstacles they face, aiming for compromises that reflect the values outlined in their founding treaties rather than just political affiliations. Real understanding comes not from arguments but from thoughtful conversations, where participants should always keep in mind the greater good of their citizens and the broader community of free nations. At the same time, it is worth remembering those who want to take advantage of the dissonance in the “European Orchestra” to impose their own melody using the most sophisticated methods of hybrid wars – and all we can do is wish European leaders, regardless of their attitude to the current version of the agreements, wisdom and restraint in defending their own position.

Bohdan Myronenko is a research fellow for Central Europe and the Balkans at ADASTRA, a Kyiv-based think tank.

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agriculture, EU foreign policy, European Union, farmers, free trade agreement, Latin America, Poland