Jamil Chad Via Jungle, EU will ban soy and meat and Lula will fight abroad for 1st time 06/12/2022 05:57

In an agreement that expires this Tuesday, the European Union has agreed with the European Parliament to create a law that would ban the sale of agricultural and livestock products that contribute to deforestation. The measure threatens to affect Brazilian exports and could spark a trade dispute between Brussels and Brasília.

Companies that sell products such as soy, meat, coffee, and other commodities in Europe will have to demonstrate that their supply chain is not contributing to deforestation. In this case, extra tariffs will be applied, which in practice means closing the European market for these productions.

In total, the company that sells deforestation products to the European market will be fined 4% of its annual turnover.

Imports of leather, chocolate, furniture, rubber and charcoal, as well as palm oil, wood and cocoa, will also be monitored. The Europeans’ opinion is that the continent does not want to “import deforestation.” However, for many governments around the world, the measure is merely an attempt to justify tariff barriers.

But environmentalists warn that the measure may not be as effective as Europeans claim. The rule will only apply to crops grown on land that has been deforested after 2020. Another criterion is respect for indigenous lands and their rights.

In the case of Brazil, deforestation rates broke records between 2020 and 2022. By law, European importers will have to monitor 9% of exporting companies in Brazil.

A tight match with the new Lula government

The new law promises to create a fair fight with the new Brazilian government, Luiz Inácio Lula da Silva. Europeans celebrated the PT’s election victory as a sign that environmental issues will be discussed once again. But they have not stopped putting up trade barriers.

Virginijus Sinkevicius, EU commissioner for the environment, told Reuters that Brussels will work with exporting countries to help build its capacity to enforce the rules.

But within Itamaraty, it seems that the main focus of the measure, of the restrictions, is Brazil.

The bill’s approval is considered a confirmation of the failure of Jair Bolsonaro’s diplomacy, both in terms of environmental issues and the government’s ability to negotiate Brazil’s business interests abroad.

If progressive and environmental groups within the European Parliament have defended the law, one wing insists the measure comes at a complicated time for world food trade. The war in Ukraine has affected the grain supply, and voices have been raised within the European Commission of the need to re-establish the trade agreement with Mercosur and accelerate its now paralyzed implementation.

Behind the scenes, Jair Bolsonaro’s government led an offensive by developing countries to prevent Europe from implementing protectionist measures. In a letter to the European Commission, Brazil and a dozen developing countries warned that such barriers could violate international agreements.

For Brazil, trade measures cannot be used to achieve environmental goals and threaten to deepen poverty with no impact on forest protection. The group also warns that the proposal could violate WTO trade agreements.

In the document submitted to the European Commission at the end of July, developing countries stated that they are aware of the need to defend the environment. However, they regret that “the EU prefers unilateral legislation” and does not follow the already established international agreements.

The Brazilian-led group wants Europe to expand consultations with foreign governments before implementing the barriers. In the document, developing countries also regret that the arguments presented so far by these countries have been ignored.

According to the letter, the process in Europe does not adequately take into account the local conditions of each region on the basis of criteria that could be “punitive”. The group warns that the greatest risk is that such measures will cause “trade disruptions and diplomatic tensions without benefiting the environment.”

The measures will also damage the reputation of companies and penalize producers in developing countries, especially small farmers. The group also claims it is concerned about the discriminatory nature of the measures. According to them, such barriers can have a “negative” social impact and “economic consequences” for emerging economies.

The letter was signed by the ambassadors of Brazil and Indonesia, as well as Argentina, Colombia, Ghana, Guatemala, Ivory Coast, Nigeria, Paraguay, Peru, Honduras, Bolivia, Ecuador and Malaysia.