Import more Brazilian beef even though the Amazon is on fire? The Mercosur Agreement of 23 August is highly controversial: While the machinery and pharmaceutical industries are benefiting from better export conditions, environmentalists and farmers’ associations are opposed to the agreement.

What it is about

After the EU had already prepared itself for a free trade agreement with the four Mercosur states (Brazil, Argentina, Uruguay, Paraguay) in June 2019, the EFTA countries Switzerland, Liechtenstein, Norway and Iceland followed suit. Fearing that the Swiss economy would be left behind, Economiesuisse, among others, demanded a quick compromise. Now the export industry in particular is benefiting from the better conditions: Thanks to the agreement, around 95 percent of exports will be completely exempt from customs duties in the medium term. Brazil and Argentina previously sealed off their industries with massively high tariffs of up to 35 percent for machinery.

In return, Switzerland grants the Mercosur states annual concessions for meat, cheese, wheat, honey, red wine, edible oils, feed grain and certain fruits and vegetables.

Criticism from inside and outside

The agreement with the Mercosur states is meeting with resistance at home and abroad: Swiss farmers fear massive pressure on the prices of agricultural products. With land areas many times larger and machinery heavier, the production costs of South American farmers are significantly lower. The Farmers’ Association also criticises the fact that too little attention has been paid to sustainability: It is not only animal husbandry that is in many respects a cause for concern; Brazil’s President Jair Bolsonaro has also approved more than 200 pesticides which are banned in Switzerland because of their hazardous nature.

At the same time, it is feared that the agreement will lead to more grubbing if more meat and soya can be exported. In this case, not only the rainforest, the earth’s green lung, but also the indigenous population would suffer.

Amazon as a focal point

The worst forest fires in years have been raging in the Amazon since August. The earth’s green lungs are burning. In Bolivia alone, over a million hectares of rainforest fell victim to the fire. To be able to cultivate more fertile soil, setting fires has long been one of the usual practices of local farmers. Brazil’s President Jair Bolsonaro, who quickly blamed non-governmental organisations for the fires, was the main head-shake.

As a result, Norway, for example, stopped payments to the Amazon Rainforest Protection Fund. Other European countries such as France and Ireland threaten to block the free trade agreement. Resistance is also emerging in Switzerland: parties such as the SP and the Greens are planning a referendum. At the same time, a “Mercosur coalition” of consumer and animal rights activists, farmers’ and development organisations is calling for binding sustainability criteria and animal protection to be included in the agreement.

The final word has therefore not yet been spoken. And the fires in the Amazon continue to rage …

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