The European Union's trade agreement with Latin America's Mercosur bloc, signed in January 2026 after 25 years of negotiations, officially entered into force on May 1st - albeit provisionally, due to reasons decribed further in the article.
The much discussed deal, sometimes dubbed the "cars for cows agreement", has been sparking both hopes and fears of Polish farmers and businesses - with the coming months likely to show if it impacts the country's economy in a positive or negative way.
Opening large markets in Argentina, Brazil, Paraguay, and Uruguay for the EU and vice versa, the deal eliminates customs duties both ways on over 90% of products. Sectors such as automotive, chemicals, textiles, and machinery are touted to benefit the most in Europe.
The European Commission president, Ursula von der Leyen, pointed out that the agreement is of a historic magnitude, as it creates a free trade area of 720 million people.
"It opens countless opportunities. It reduces billions in tariffs. It gives our small and medium-sized enterprises access to markets and enables growth they could only dream of before"
- the Commission president emphasized.
The European farmers disagree, however, and have strong reservations - with Poland being among the most vocal critics of the deal. Beef producers in particular fear an influx of cheap food from farmers in Mercosur countries.
The farmers' leading argument is that the Mercosur producers won't have to meet all the stringent EU standards - but that's untrue, as all strict EU sanitary and phytosanitary (SPS) standards must be met if their produce is to be exported to the European Union, including bans on certain growth hormones and strict pesticide residue limits.
"Europe's agriculture is being sacrificed in the interests of other sectors of the economy. We're holding our breath for the next few, or perhaps a dozen, days, because we'll see the first effects of this agreement coming into force. Everyone is waiting. We're worried about how the market will react. This is particularly important in Poland, because nearly 80% of our exports go to the European Union. A drop in orders could spell trouble for Polish farmers"
- commented Jacek Zarzecki, vice-chairman of the Polish Sustainable Beef Platform and one of the country's most influential farmers' interests lobbyists.
Polish poultry and sugar producers are also concerned - while the country's dairy sector representatives see the agreement as an opportunity to enter the South American market. This sector was supposed to be one of the Mercosur deal winners - but the start is bumpy, as Brazil is delaying issuing necessary veterinary certificates, despite an inspection that took place several years ago and yielded positive results.
"If we don't act quickly to resolve this matter, we will simply miss our moment. And it's crucial that we make the most of these opportunities to strengthen our sector and increase exports"
- Agnieszka Maliszewska, President of the Polish Milk Chamber, told Polish Radio.
The Mercosur agreement is entering into force provisionally, as the European Commission has decided to greenlight the deal without waiting for the final consent of the European Parliament and ratification in the member states. The Commission has also not waited for the opinion of the European Court of Justice, which has received a request from MEPs to review the agreement's compliance with EU law.
Poland's Minister of Agriculture Stefan Krajewski has recently announced that his country will also appeal the agreement - and that a motion will be filed to suspend the application of the agreement until the appeal is resolved by the CJEU judges.
(mm)
Source: IAR, PAP