How do the EU's trade agreements with third countries impact the European agri-food sector? –

Credit: Original article can be found here

This week, the European Commission released a study evaluating the impact that the EU’s trade agreements with third countries, as a whole, has had on the community’s agricultural food sector.

To do this, the study analyzed the EU’s trade agreements with 12 countries. Some of them have already entered into force (Canada, Japan, and Vietnam), the negotiation of others has already been completed (Mexico and Mercosur), and others are in the negotiation phase or are part of the EU trade agenda (Chile, Australia, New Zealand, Indonesia, Malaysia, Philippines, and Thailand).

The study also takes into account two liberalization scenarios with these countries: an ambitious one, which proposes a 98.5% total liberalization of tariffs in most products and a 50% partial reduction of tariffs for other products; and a second more conservative scenario, with a 97% total liberalization of tariffs for most products and a 25% reduction for the rest. Both scenarios are compared to a baseline scenario of maintaining the status quo.

In both scenarios, the fruit and vegetable trade balance between the EU and most of the 12 countries analyzed deteriorates.

In the case of Mercosur, Community exports would amount to 195.1 million euro in the conservative scenario and 195.2 million euro in the ambitious scenario. Meanwhile, Community imports would total 1,198 million euro in the first scenario and 1,197 million euro in the second scenario. Thus, the EU’s trade balance would have a deficit of 1,003 million euro and 1,002 million euro in the aforementioned scenarios.

In the case of Chile, the differences between the conservative and ambitious scenario are scarce. Thus, taking only into account the conservative scenario, Community exports will only amount to 7.7 million euro and imports will total 787.3 million euro; this means the EU will have a negative trade balance of 779.6 million euro.

EU exports to Mexico in a conservative scenario would amount to 31.3 million euro and imports would total 185.7 million euro, resulting in a deficit balance of 154 million euro.

The trend is the same for other geographical areas. Community exports to Australia, for example, would total 36.7 million euro and imports 179.5 million euro, resulting in a negative trade balance -142.8 million of euro.

As a whole, the trade balance with the 12 countries analyzed deteriorates by 200 million euro. Mercosur and New Zealand are the partners that will improve their trade balances with the EU the most. This highlights the limited opportunities that these agreements offer the community fruit and vegetable export sector, FEPEX stated.

Click here for a link to the report