EU seeks farm sector backing for EU–Mercosur deal by cutting fertilizer tariffs

To secure support from Europe’s powerful agricultural sector for the EU–Mercosur trade agreement, the European Commission announced on Wednesday (7) that it plans to reduce import tariffs on certain fertilizers and to push forward legislation that could allow temporary suspensions of the EU’s carbon border tax.

The concessions are part of a broader effort by the Commission, backed by countries such as Germany and Spain, to secure approval from a majority of the EU’s 15 member states to authorize the signing of the EU–Mercosur deal, possibly as early as next week.

European farmers have raised concerns that cheaper imports from South America, particularly beef and sugar, could undermine their competitiveness in domestic markets. Even if the agreement is authorized by member states, it would still require approval by the European Parliament before entering into force.

European Trade Commissioner Maroš Šefčovič said the EU intends to eliminate the standard tariffs of 6.5% on urea and 5.5% on ammonia, two key inputs for the agricultural sector. According to him, the Commission will also encourage lawmakers to approve legislation allowing temporary exemptions from the carbon levy applied to imports.

Earlier, France and Italy had called for fertilizers to be excluded from the carbon border tax. The mechanism, which took effect on January 1, charges imports based on the CO₂ emissions generated during the production of goods such as steel and fertilizers, aiming to prevent what the EU considers unfair competition from producers outside Europe.

Supporters of the EU–Mercosur trade agreement, which took around 25 years to negotiate, argue that it is crucial for boosting European exports affected by U.S. tariffs and for reducing the bloc’s dependence on China, particularly in access to strategic minerals.

On Wednesday, Jan. 8, European commissioners responsible for agriculture, trade and health met with ministers from EU countries in an attempt to ease concerns about the future of European farmers. Discussions included funding for the agricultural sector and potential revisions to import rules, such as limits on pesticide residues.

France, Italy against EU–Mercosur trade agreement

France and Italy blocked the agreement in December. As the EU’s two largest agricultural producers, both countries say they will only support the deal after receiving firm guarantees against a possible surge in Mercosur products, especially beef and sugar.

On Tuesday, the European Commission signaled progress in talks with Italy by proposing to bring forward a €45 billion aid package for European farmers. Poland and Hungary remain opposed to the agreement, while France continues to hold a critical stance. Ireland, a major beef producer and exporter, has indicated it may support the deal.

Irish Prime Minister Micheál Martin said the country is coordinating with governments that share similar concerns and stressed the importance of safeguards against sudden increases in imports. Speaking to journalists during a visit to China, he said that while concerns about Mercosur remain, significant progress has been made over the past 12 months.

France’s Agriculture Minister, Annie Genevard, reiterated that France does not support the agreement and called for a broader assessment of the cumulative impact of multiple trade deals on Europe’s agricultural sector.

Source: G1

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