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Alert from Via Campesina Brazil on EU-Mercosur negotiations

28 September 2004

ALERT FROM VIA CAMPESINA BRAZIL

BRAZILIAN
NEGOTIATORS ARE BETRAYING THE INTERESTS OF
BRAZILIAN PEOPLE IN THE NEGOTIATIONS BETWEEN
MERCOSUR-UNIÃO EUROPÉIA.

Version française ici

From September 20th to 24th the negotiators for Mercosul
[Mercado Común del Sur] met in Brussels. Among them were the
negotiators from Brazil and the European Union to make bids on
tariffs and integration processes. The agreements which have been
negotiated in the technical and diplomatic commissions now will
later be endorsed by a Ministerial meeting, held in Brasília, from
October 20th to 24th. The urgency for such agreements, which
were reached without any transparency or consultation with the
Brazilian society and the Cone Sur, is due to pressures from the
Europeans, who have a negotiation mandate till October 31st, and
therefore want to close their agreement with Mercosul before they
change their current negotiators for each country.

If Brazilian diplomats were cautious with the negotiations on FTAA,
in the case of the European Union, the so called negotiators
behaved like second class merchants, sell-motherland, without
respecting or consulting any sector of our society.

It seems that our "negotiators" or "hand overers" have been
commanded by representatives from the Ministry of Trade and
Industry, and by economic groups that have the only dream of
exporting a little bit more of sugar cane, alcohol, meat, and other
raw materials. Without any great aditional advantages. But in
exchange, they handed over the opening of our markets. European
transnationals are grateful. No one gives a damn for the jobs of the
Brazilian people. The degree of the "handing over" was such, that
embarrassed, the representative of the Ministry of Agrarian
Development, withdrew in protest from the negotiations.

Let’s see the results below.

1. THE NATURE OF THE AGREEMENT THAT HAS BEEN
NEGOTIATED

The bioregional Agreement between Mercosul and the European
Union presents, since its conception, an "exchange" between the
offensive interests of Mercosul in Agriculture, with dreams of
expanding its sales in Europe, and the hand over of our markets to
European industrial and service companies. Now, the offensive
interests of the Brazilian negotiators concentrate in some
agricultural raw materials: meat, sugar, alcohol, coffee. On the
other hand, Europeans are interested in goods with more value-
added and concentrate in investment themes, services,
governmental purchases, intellectual property, wines and industrial
goods.

The mandate of the President of the European Commission,
Romano Prodi, and his commissioners, will expire on October
31st, when a new team representing the 25 countries of Europe will
take over the negotiations. That is the reason for the urgency in
closing an Agreement before that date.

Since Brazilian society has its attention focused in the elections
and there is a certain dispersion among social movements,
governmental "representatives" seized the mood to accelerate the
negotiating process between Mercosul and the European Union in
great hurry, without any transparency, without any political
legitimacy, and without any previous consultation with the
productive sectors of society. We do not believe that the actual
almighty FIESP [Federation of the Industries in São Paulo State]
agrees with this process that will liquidate part of our national
industry.

No dialogues with the most affected sectors by the agreement
were established, not even technical studies evaluating its impact
in the Brazilian job market have been done.

See bellow the two most emblematic cases of the "handing over"
that is on course in the negotiations.

2. IN THE ACCESS TO MARKETS

Brazil has offered 90% access to our market, which in practice
implies, that European products will enter the country without
paying tariff, in other words, zero import tariff in Brazil for up to 10
years. One of the most worrying and pathetic cases is the case of
milk, which is considered by Mercosul a sensitive product and has
now an import tariff of 27% for the European milk to enter in Brazil
and in Mercosul.

However, the list of exception for products recognized as sensitive
by MercosuL has not been applied to the bi-regional Agreement.
Brazilian Family/campesina Agriculture is responsible for 82% of
1.8 million establishments producing milk in Brazil, which is at
least 80% of the total production. If the agreement was signed
today, the bracket for importing milk, which is 27%, would be 0%.
The import, which is already high, above all in powder milk and
whey, would be disastrous and would greatly affect national prices
and the life of millions of small farm ers. Certainly, more than one
million small farmers who produce today, approximately 30 litres a
day, would not have any means of productivity to compete with the
Europeans, and would go bankrupt, losing their jobs, and swelling
the queues of the rural exodus.

The same applies for the production of onions, garlic, wine, and
peaches, among others. All of them produced by small farms.

Therefore, with the Agreement Mercosul-EU we will have an
increase in the rural exodus in Brazil

Another example of the uneven advantages that can be obtained
with the agreement is in the meat sector: Europeans offer us
smaller quotas from those we already export today, which means,
116 tons, when we already export 275 thousand tons. If that was
not enough, this quota is not offered at once, but in stages along a
period of 10 years, for the four partners of the Block. In other
words, even handing over our markets in the illusion that
Europeans would open their markets for larger quotas in
agricultural exports, where we have better production conditions,
even then, they protect themselves, while the Brazilian government
hands over everything,

Besides, they propose a mechanism that increases import tariffs
when exports from Mercosul increase. That means, the more we
export, the higher the tariff will be.

Another serious point of the negotiation is the theme of the
subsidies to Europeans exports, which was left out of the
agreement. The European subsidy for milk exports is €1.7 billion for this year, 2004 and it is expected to be €1,2 billion in 2005. Nothing was agreed in the negotiation about how the
theme will be approached or how to protect our Family Agriculture
from this volume of subsidies. Also, nothing was agreed about safe-
guards against surges of importing subsidized agricultural
products.

3. SERVICE SECTOR

The service sector of Mercosul is in a even more serious situation,
and it interests us, Brazilians, even not being related to directly to
agriculture. But, Brazil is opening up completely in the
communication sector, environmental, financial and bank services
and insurance. It means that transnational companies will be able
to operate without any restrictions or conditioning in all these
areas, controlling these markets which are strategic for the future
of the country. And what is even worse, while we make areas
which have high added-value flexible, there is no opening from the
Europeans to allo w the access of our products with added-value to
compete with them.

4. INVESTMENT AREA

The Agreement Mercosul-EU would be the first international
commitment that Brazil would make with the investment sector.
Even though Brazil is now an open country for foreign investment,
an Agreement of that kind would remove the power of decision from
the Government to legislate and control in order to protect national
interests whenever it is neces sary.

In the initial offer, Brazilian Government introduced restrictions to
foreign investment in agriculture which could, eventually,
compromise national policies for the implementation of the agrarian
reform, aiming above all to protect PRONAF (National Programme
for the Agrarian Reform) and to maintain restrictive measures for
the acquisition of land by foreigners. However, the EU handed over
a document to Itamaraty where it asks for the removal of the
restriction with reference to the "agrarian reform", and agriculture,
among others.

5. INTELECTUALL PROPERTY

The community proposal already exceeds, by far, the standards
established in the TRIPs, and agreed in the scope of the WTO. For
example: the EU is pressing to have included in the Agreement the
protection for products such as parmesan cheese. They want to
force us to follow intellectual property rules beyond those the
country can accept. It is important to remember that the
community legislation about the protection of Geographical
Indications is now the object of a panel in the WTO, which was
motioned by the US and Australia against the EU, having Brazil
and Argentina as third party interested.

The Europeans also want to make sure that intellectual property
applies to wines, cheeses, hams, etc. That means to say that we
will not be able to produce any type of parmesan, gorgonzola
cheese, etc. Since these GIs were already European patents.

We would not even be able to produce our mortadela [Bologna],
because our "mortadela Bologna" is under protection of the
Geographical Identification.

Consequently, what the Europeans did not get in the scope of the
WTO, which places more restrictions and better conditions for all
countries, in the case of the EU-Mercosul, they managed to
impose all restrictions to protect their interests and remunerate
their products. In other words the agreement is worse than what we
had negotiated in the WTO.

5. GOVERNMENT PURCHASES

Mercosul offered preference for the Europeans, in relation to other
countries and regions, for public purchases through the mechanism
of consultation and transparency. This means that every time there
is public purchase, Europeans are entitled to request a
consultation. If the participation of Europeans is denied for tender,
they must be informed formally. At first sight the mechanism
seems harmless, but would we be able to support the pressure
from the Europeans after for the opening of our governmental
purchases after a few refusals?

That means that after the agreement is signed, all public
purchases, above a certain figure will not only have to be open for
international biddings, but above all give the right to Europeans to
have international priority in the competition. Obviously in several
supplying areas they can compete in better conditions than our
industry, and thus compete for public investments in infra-structure.

6. CONCLUSIONS

If Brazilian diplomacy was capable of stopping the negotiation of
the FTAA because they were far from meeting Brazilian aims and
needs as a project of sustained development and independent, why
did we allow the agreement with the Europeans to go ahead, which
in practice is even worse than FTAA?

But besides comparisons with the FTAA this agreement risks
important sectors of family agriculture, and risks important sectors
of our industry and services. Risk the jobs of millions of Brazilians.

To get nothing. With only the illusion of free-trade?

It is in fact a shameful neo-colonialism that demands immediate
reaction from the organized social sectors of Brazilian society.

We cannot silence before this shameful submission of the interests
of Brazilian people to European capital, practiced by negotiators
that should be called "hand overs" who have no legitimacy to
represent us. We hope the Brazilian government will honour their
campaign commitments with the Brazilian people, and defend at
least our jobs. What is at stake is our sovereignty and our future as
a country. A project for national development is at stake.

The Brazilian government has the word.

Brasília, September 28th 2004.

VIA CAMPESINA BRAZIL

- Movement of the Landless Rural Workers - MST
- Movement of Small farmers - MPA
- Movement of Peasant Women - MMC
- Movement of those Affected by Damns - MAB
- Comissão pastoral da Terra - CPT
- Federation of the Agronomy Students of Brazil - FEAB
- Pastoral da Juventude Rural - PJR


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