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Brazil says EU deforestation rules hamper Mercosur trade deal negotiation

Reuters | 8 November 2023

Brazil says EU deforestation rules hamper Mercosur trade deal negotiation

By Anthony Boadle

BRASILIA, Nov 8 (Reuters) - Brazilian officials said on Wednesday new legislation enacted by the European Union to ban the import of goods linked to deforestation was complicating negotiations of a trade deal with South America’s Mercosur bloc.

EU lawmakers approved the regulations in April requiring producers of soy, beef, coffee, wood and other commodities

to provide proof their supply chain is free of deforestation.

"We must not allow this legislation to disrupt a trade agreement between Mercosur and the 27 countries of the European Union," Brazil’s Vice President Geraldo Alckmin said at a conference organized by soy processors’ group Abiove.

Even though the onus on complying with the new rules will be on the EU importers, Brazilian Foreign Trade Secretary Tatiana Prazeres said the commercial impact for exporters in increased costs and bureaucracy cannot be ignored in the trade talks.

"You cannot offer in one hand what you are taking away with the other," she said at the conference.

Prazeres added, however, that the EU-Mercosur negotiations are an opportunity to influence the implementation of the deforestation rules and to find ways to compensate with trade concessions that maintain a balance in market access.

"They really don’t like the deforestation directive but we are trying to reassure them that the implementation will take into account some of their concerns," a European diplomat said.

Abiove says the soy sector complies with a moratorium on farming in deforested areas and Brazil already regulates deforestation under its forest code that allows some areas to be cleared. Farms in the Amazon have to conserve 80% of their forests.

Both Prazeres and the Foreign Ministry’s Economic and Finance Secretary Mauricio Lyrio said they expect to be able to announce the long-awaited conclusion to the trade negotiations with the EU at a Mercosur summit on Dec. 7.

They reiterated the Brazilian government’s position that the EU deforestation law is protectionist, arbitrary and incompatible with World Trade Organization (WTO) rules.

Lyrio said they asked for more time to implement the deforestation regulations at a meeting in Brussels last week. Companies have until Jan. 1, 2025 to comply with the new law.

Environment Minister Marina Silva said only 2% of farmers produce from illegally deforested land, and President Luiz Inacio Lula da Silva’s government has cut the deforestation rate in the Amazon by 49.5% since taking office this year.

 source: Reuters