The State Secretariat for Economic Affairs (SECO) of the Swiss Federal Government and Agroscope published two studies on Tuesday (30.06.2020) on the possible consequences of the EFTA-Mercosur free trade agreement for the environment and agriculture.
EFTA (the European free trade group consisting of Switzerland, Norway, Iceland and Liechtenstein) and Mercosur (Brazil, Argentina, Uruguay and Paraguay) reached an agreement last August. Ratification is expected in 2021, after a legal review and parliamentary approval.
A coalition of Swiss agricultural organisations, consumers and NGOs, known as the Mercosur coalition, has expressed concern about the negative impact of the agreement.
Studies commissioned by the Swiss government
The first study, conducted by the World Trade Institute at the University of Bern in June 2019, analyzed the environmental impact that trade could have in Switzerland and the Mercosur states, with 2040 as the reference year.
He predicted that in 2040, the increase in greenhouse gas emissions due to the FTA would be 0.1% in Switzerland, 0.02% in the Mercosur states and 0.0004% worldwide.Air pollution is expected to increase by around 0.2% in Switzerland, while remaining virtually stable in Mercosur countries and internationally.
According to the models, the increase in deforestation due to the agreement in the Mercosur States could vary from 0.02% to 0.1% in the worst case.
"The limited environmental consequences expected are explained by the fact that the FTA does not imply any change in the trade of products with a high environmental impact, nor does it open the way for new flows of such goods," said a government press release.
A second study, by Swiss agricultural research body Agroscope, showed the deal would have little impact on trade in agricultural products. and therefore on Swiss production and the prices charged by Swiss producers. The analysis focused on the impact of the opening of markets, with a reduction in customs duties and the establishment of bilateral quotas for certain Mercosur agricultural exports to Switzerland.
The results indicate that the granting of bilateral quotas would have no significant effect on agricultural trade, even if Mercosur states made extensive use of these additional quotas. Furthermore, the FTA would have little impact on Swiss production and prices.
The free trade agreement ensures that 95% of Swiss exports to the Mercosur area, which is made up of 260 million inhabitants, would be tariff-free. Technical barriers to trade would be eliminated, suppliers of Swiss services They would have easier access to markets and bilateral economic relations would be strengthened.
In exchange, South American countries could sell more meat in Switzerland.
Source: AP
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