The results of the elections for the European Parliament have caused an earthquake in the main nations of Europe, showing a resurgence of political spaces with a conservative and extreme right tone.
This new European political scenario will undoubtedly bring new ideas and interests to the debate on one of the most ambitious and long-running trade agreements in the history of international negotiations: the free trade agreement between Mercosur and the European Union (EU). To cite an example, the political tension in France and the pressure from its farmers are a clear sign of the uncertainty surrounding the process of ratification of the agreement.
The new government of the Argentine Republic has been very clear and decisive in its position, and described these negotiations as strategic for the development of a new policy of insertion of the country in the concert of the main powers of the world. Foreign Minister Diana Mondino, in her official mission to Brussels last May, confirmed to the highest European authorities that the signing of the Agreement is a priority for the Argentine government, expecting a similar commitment from the EU.
With this objective in mind, the Foreign Trade public policies of the Argentine Republic are beginning a strong reform to strengthen them; for example, measures were adopted to simplify and de-bureaucratize those that regulate the production of the agricultural sector (1), in order to increase exports, promote fair competition, reduce administrative costs and tax burden for the private sector. Thus, through Resolution No. 50/2024 published on June 19, the obligation to register Foreign Sales Declarations (DJVE) was eliminated for a number of products, most of them from regional economies.
For its part, the EU highlights the priority of transforming itself into a modern, competitive and resource-efficient economy in order to respond to the challenges of climate and the environment. This new paradigm gained relevance with the signing of the “European Green Deal” with a clear conviction of achieving a radical change in environmental matters and advancing in specific regulations that allow its effective application.
Strategically, through the promulgation of regulation 2023/1115 (2), the EU seeks to minimize environmental risk and restrict the entry of products that are a source of deforestation in general. This regulation should not go unnoticed by our country and, on the contrary, is a profound call for attention and analysis for Mercosur as a negotiating bloc.
According to the standard, which will come into force on December 30 of this year, any importer in the bloc must confirm that the products entering the European market and included in the standard are free of deforestation as of December 31, 2020. It also contemplates the possibility of adding other lands under protection, starting in June of this year, extending the deforested area criterion to other types of forested land, evaluating the feasibility of incorporating grasslands, peatlands and wetlands by mid-2025.
It is important to note that each Member State of the European Union is obliged to establish protocols to ensure the effective implementation of this regulation. However, this condition entails a high risk that, in the first instance, different control criteria coexist, taking into account the number of customs offices in the countries that make up the EU.
These new and forceful rules of the game directly challenge Mercosur to carry out an exhaustive analysis of each contingent of merchandise that it wants to import into the EU, translating the regulatory impact into numbers and closely following this agenda, the effects of which can directly affect its agricultural and livestock production matrix.
As I have argued on several occasions, the implementation of the free trade agreement between Mercosur and the European Union –One of the world's leading investors with more than forty trade agreements in force– It would bring substantial economic benefits to Mercosur by promoting investments in infrastructure and technology, which could significantly contribute to the economic and social development of the region. At the same time, it would be an effective tool to demonstrate the validity and relevance of Mercosur as an economic bloc at a time when critical voices are being heard regarding its functioning and operation.
However, Mercosur cannot ignore the anti-deforestation regulations cited above, which its intended partner, the European Union, has taken as a first step towards a world that advances in the traceability of production and value chains. The dispute that has been taking place in our country over the last 30 years is well known - and other countries in the region– as a result of the scientific development of technological packages that optimize the results of crops and livestock breeding in previously hostile areas. This has brought into question and put into crisis the limits between the expansion of the agricultural and livestock frontier and the preservation of native forests and protected natural environments.
In conclusion, although the path to ratification is fraught with challenges and fundamental issues to be resolved, an Agreement of this magnitude would be a significant step towards deeper and more sustainable global economic integration, with the passport to establish ourselves as reliable suppliers with the new standards that the world recognizes and demands. The situation in a changing world, the recent geopolitical and trade conflicts between the main world economies have highlighted the importance of diversifying and securing global supply chains. The opportunity is now and must be seized with determination by closely following how the pieces move in step with the new regulatory frameworks, in order to have a strategic vision and action.
- The measures include a reduction in the number of annual submissions to the Comprehensive Agricultural Simplification System (SISA), the simplification of the Single Registry of Operators of the Agroindustrial Chain (RUCA), the elimination of the Wheat Trust and the Balance Volumes in Grains, the elimination of restrictions on meat exports, the repeal of the Bovine Price Information System, among others.
- Regulation (EU) 2023/1115 – Marketing and Exportation of Raw Materials and Products Associated with Deforestation and Forest Degradation.
Lawyer from the University of Buenos Aires (UBA). Specialization in State Law - Treasury Attorney of the Nation. Manager of Commercial Standards and Instructions of the National Commission of Foreign Trade (CNCE), a decentralized body within the Ministry of Economy. Professor of the Bachelor's Degree in International Trade, the Diploma in Customs Law and the Postgraduate Specialization in Global Business at CAECE University.
