Initiated in 1999, the free trade agreement between Europe and Latin America now seems obsolete. Yet there is a need to unite the two sides of the Atlantic in the face of China’s power. But the war of standards and the intrusive power of NGOs are blocking the growth of power.
The December 6, 2024 agreement has been announced to be a resounding success. The European Union, a real commercial power, was to relaunch free trade between its 450 million souls and the Southern Common Market, with its almost 300 million inhabitants. The association would involve a group of thirty-one countries, accounting for almost twenty percent of the world economy. Behind the shiny façade of gentle trade, however, lies a much more conflict-ridden economic reality[nolte]This article is the fruit of the seminar “Accords UE-MERCOSUR. Economic war and agricultural battles” held on December 18, 2024, with the participation of : Erwan Seznec (author of Les Illusionistes, journalist at Le Point), José Colombatto (vice-president of the Argentine Rural Confederations), Enzo Mariani (Argentine producer), Juan Pascual (Spanish essayist, communicator and veterinarian). It was moderated by François Soulard (Dunia) and supported by the CR451 Research Center of the Economic Warfare School.[/note], particularly in the agricultural sector.
Multilateralism in the current geostrategic fog
This multilateral gesture is not neutral in the age of the race for economic power. After the United States abandoned the Trans-Pacific Partnership (TPP) in 2017, China upped the ante in 2019 with the creation of the largest free-trade zone in the Asia-Pacific (RCEP). With Washington lacking any real strategy vis-à-vis a South America increasingly enveloped economically by Beijing, has Europe grasped the importance of a rapprochement with its “extreme West”?
Free trade isn’t exactly on the up-and-up in these days of cut-throat globalization. The major multilateral negotiating tables have been laborious in the case of China, due to diverging strategic agendas and the disruptive expansion of the Asian giant. They have been and continue to be so for this Euro-American alliance. Initiated in 1999, they have followed a tortuous path, to say the least. The latest diplomatic advances, sealed in 2019, remained at a virtual standstill. In the meantime, bilateral trade has followed a more natural course, while the flow of the proceeds of crime and drug trafficking has integrated the black economies of both sides of the Atlantic at a steady pace.
Two powers fighting the same economic battle
In this respect, Europe and MERCOSUR appear to be two dormant powers in the current geostrategic tumult.
The former has every right to be proud of its trade surplus with most of its international partners. But it is reluctant to set itself up as a geopolitical player, and has different views on the existential threats it faces.
The latter is already grappling with the new Sino-American bipolarity and could, in theory, aspire to become the world’s food basket. Its ideological atavisms and its very physiology paralyze its emergence. Both, however, are taking the brunt of the prevailing geo-economic hostility, replicating economic warfare modalities that are eroding their respective power and destabilizing the positive-sum game offered by free trade.
These contradictions soon came to the surface with the announcement of the agreements currently being negotiated. While farmers in France, Moldavia, the Netherlands, Poland and Denmark recently took to the streets, Brazil denounced the boycott declared by the Carrefour group in South America, in the name of the commercial threat posed by the MERCOSUR meat industry. The agri-food sector is at the heart of a battle that lies at the very heart of the economic matrix of the two blocs.
The standards crusade against European agriculture
On the European continent, the normative pressures applied to agricultural production have helped to bring back to the forefront the issues of sovereignty and survival of the agro-industrial model. There was a time when restrictions aimed at preserving biodiversity and water quality, or reducing the carbon footprint of livestock farming, were still rational. The idea of a “green” agricultural pact made sense. But the veritable “normative crusade” undertaken by the European administration over the past decade has changed all that. Today, the burden of environmental restrictions is synonymous with normative nuisance openly aimed at the agricultural sector. This approach is superimposed on other conflicting dynamics, such as competition from new producer countries, or intramural imports of food products from countries with much higher greenhouse gas emissions.
Hasn’t the European energy sector given a tragic demonstration of regulatory dogma and double standards? The European Commission’s militant promotion of renewable energies, against a backdrop of institutional silence in the face of Russian gas dependency and blatant anti-environmental offensiveness, is shattering. Germany is not the only country to pay a high price.
No matter. New regulatory measures now envisage taxing nitrogen consumption in agricultural activities, as in Denmark and the Netherlands, or limiting livestock transport when atmospheric temperatures exceed 30 degrees centigrade. Various investigations have shown upstream that the scientific work underpinning these normative definitions has been sewn together by anti-agroindustrial lobbies1.
Economic warfare against South American agriculture
Farmers in South America are facing similar maneuvers.
The governments of Brazil, Uruguay, Paraguay and Argentina are making offensive use of fiscal and environmental regulations. The vast world of civil and institutional lobbies has set the scene for the scientific and moral justification of regulatory measures. The result is not just a nuisance, but a veritable hybrid war waged against agriculture, with varying modalities and intensity in each of the countries mentioned.
Anglo-Saxon or European NGOs are the bridgeheads, while the administrative elites have absorbed the offensive framework of Agenda 2030, raised as a benchmark by all international institutions. Brazil, which was largely conditioned by the former US administration, is a textbook case in point. The fiscal pressure exerted by Brasilia on the productive sector has not prevented it from making its way among the world’s leading food producers. But the army of NGOs that populate the Amazon and its geographical contours has created a veritable parallel normative hierarchy, qualified as such within the country.
In Argentina, the combined pressure of export duties and, where applicable, environmental constraints, is leading to a situation of economic asphyxiation for producers. For the time being, the reforms introduced by the new president, Javier Milei, have barely scratched the surface. In the final analysis, the devitalization of the agro-industrial sector, the nutrient depletion of soils due to lack of nutrient renewal, and more simply, the lack of economic competitiveness, run counter to the stated development objectives. The actual result is a reduction in the country’s agricultural power, with all that this implies in terms of financial2 and social3 impacts.
In this landscape, China is on the lookout. It is already absorbing a large part of soybean production4 and occupying growing shares of South America’s agricultural infrastructure.
The European Union and the Southern Common Market are therefore competing with each other in their hyper-regulatory approach.
There is another important feature that brings the two systems closer together. Historically, the construction of the Southern Common Market from the 1990s onwards relied on Brazil to form a hegemonic pivot. Yet this hegemony, justified in principle to ensure greater geopolitical unity, did not respond to a positive-sum game of powers, likely to pull the whole more or less homogeneously upwards. Some member countries have suffered serious consequences in terms of deindustrialization, customs barriers and asymmetric development. In Europe, Germany has played a similar pivotal role. It developed its power by relying on the structures of European construction, and grew at the expense of neighboring economies. In the end, these logics sowed the seeds of structural imbalances.
It will be difficult for the agreement to ignore this conflicting reality
Such heavy standards are less and less perceived by the productive world as a legitimate concern for the preservation of the living environment or the management of real ecological risk.
In Europe, producers tend to be tied hand and foot to international competition, in a situation of dependence or even economic defeat, even though the Common Agricultural Policy provides enviable economic guarantees. In South America, a growing number of agrarian leaders are openly denouncing this political-administrative drift. The agricultural electorate, although aware that it carries very little weight in the political landscape, is firmly opposed to all collectivist and statist projects, while remaining sensitive to the need to preserve the environment and the soils.
Generally speaking, the relationship with their administration is marked by mistrust and resentment.
Of course, advocates of free trade between the two regions will rightly argue that the volume of European demand remains good news for stimulating South American exports. It’s true that the lifting of customs barriers and the trade quotas on the table are proving economically advantageous. The fact remains, however, that Europe’s export of a regulatory framework that is unsuitable for, or cannot be transposed to, South American production methods, in particular those for VISEC soybeans and certified deforestation-free production, is viewed with suspicion from the outset. In fact, it constitutes a new customs barrier, or even a form of extraterritoriality disguised in a normative guise.
More fundamentally, current European environmental protection policy is interpreted as a Trojan horse in South America. In practice, it leads to a ceiling on development and locks the communities that subscribe to it into unequal treaties. The Alliance for Progress, launched during the presidency of John F. Kennedy in the 1960s, was a precursor to this. The “limits to growth” subsequently exported by both the United States and Europe were put in place by a long institutional process based on influence. It has succeeded in turning conceptions of major biogeochemical issues (climate, biodiversity, wetlands, soil management, etc.) on their head. While farmers are naturally concerned about protecting the environment on which they depend, the narratives of the moment have turned them into “delinquents” of carbon, soil regeneration and biodiversity.
A common struggle between producers
Seen from this angle, it’s already less surprising to find that European producers are being scapegoated by their South American counterparts, and vice versa. Mutual realities are not well known. What’s more, the two economic matrices have worked hard to put the players back to back, and to draw up parallel realities.
Yet the same conflictual situation unites the agricultural sectors on both sides. First and foremost, they face the same lack of political representation, often accompanied by a bureaucratic capture of representation by union or corporatist logics. It is imperative to set up new political transmission belts, already more or less explicit within both blocs.
The economic warfare that targets them then requires a substantial upgrade in terms of cultural and cognitive combat. Producers are the target of a coordinated effort to weaken them. Urban populations and the media were taken to task to reverse their perception against their productive fabric. Beyond the classic subjects of international competition, the hidden reality of this economic war is still too much overlooked. It is ignored by the general public and other economic players. A huge effort of education and intercultural dialogue remains to be made. This means updating our knowledge of the nature of these confrontations, as well as investing in an organizational network capable of sustaining a long-term commitment. This battle is not confined to the respective administrations of member countries and their economic blocs. It is more broadly related to the new balances of power shaping the world.
So what are we to make of free trade?
It is regrettable that cooperation between two geopolitical blocs should be posed in such ambivalent and conflicting terms. But could it be otherwise, given the iron law of transnational space? Let’s be clear, however, that this is not just a case of administrative failure or circumstantial political drift. This conflicting action on the agricultural matrix illustrates one of the breaches opened up between the elites and the social bases of the collective West. Instead of uniting to counter a real adversary and stabilize the global chessboard by aggregating geopolitical power, a significant proportion of the elites prefer to engage in internecine battles to serve petty and utopian causes.
Under these conditions, is free trade between the European Union and MERCOSUR still possible? Only time will tell. If it is ratified by parliaments, the agreement is likely to be a mixed or mediocre success. Its potential would have been far more transformative if it had relied on a mutual amplification of the margins of freedom, while reducing internal greed. Pending a more glorious tomorrow, all that remains is to act here and now on the power relations that have forged this reality.
- See the work of Erwan Seznec and Géraldine Woessner in their book Les illusionistes. https://www.revueconflits.com/les-illusionnistes-mensonges-autour-de-lecologie-entretien-avec-erwan-seznec/
- Argentina has some of the best fertile soils in the world, but its agricultural productivity is more than half of its potential.
- Some 150,000 farmers have given up farming in Argentina over the past fifteen years.
- Around 80% of Brazilian soybean production is exported to China, compared with 90% in Argentina.
