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Strengthening trade relations with Ukraine and Mercosur countries could prove beneficial for Europe in the event of a trade war with the United States, EU Agriculture Commissioner Christophe Hansen told Euronews.
ADVERTISEMENTA trade agreement with the Latin American bloc – comprising Argentina, Brazil, Paraguay and Uruguay – and further integration of Ukraine into the common agricultural market, particularly in light of its potential EU membership, offer opportunities that the EU cannot afford to overlook amid global trade tensions, EU Agriculture Commissioner Christophe Hansen told Euronews’ Europe Conversation.European farmers fear that the ambitious EU trade deal could disrupt sensitive agricultural sectors, but the Luxembourgish Commissioner said these strategic moves could reduce Europe’s dependence on US imports, particularly in protein crops, which the bloc still imports in large quantities.“We need to do our homework to make our farming community more competitive,” Hansen noted, suggesting that trade deals could play a key role in achieving this.The integration of Ukraine, in particular, presents geopolitical advantages as the consequent increased agricultural production could bolster Europe’s position as a global player in the sector.“It’s a mix of challenges and opportunities. It’s like a wedding—there are always challenges and you have to make concessions, but you get as well advantages,” Hansen remarked.Ukraine and CAP reformUkraine’s EU membership is approaching, but it necessitates a reform of the bloc’s farming subsidies program.“We have in Ukraine farms of 600,000 hectares. That is the equivalent of twice the production of Luxembourg. So this needs to be taken very seriously,” Hansen said.The current Common Agricultural Policy (CAP) disburses direct payments per hectare. Given that Ukrainian farms average 485 hectares – compared to 30 hectares in France and just eight hectares in Poland – this system could significantly disrupt CAP.“My mission letter clearly states that I have to prepare the [next] Common Agricultural Policy to future enlargement, not necessarily only for Ukraine, but as well for other new Member States to be welcomed,” he added.The first step involves negotiating a new trade framework with Ukraine that will also serve as “as the first phase of alignment of production standards.”The current trade scheme, known as Autonomous Trade Measures (ATMs), temporarily suspends all tariffs and quotas on Ukrainian agricultural exports following Russia’s full-scale invasion in 2022.This framework expires this June, and – having already been renewed once – cannot be extended further and must be replaced by a proper free trade agreement. The current scheme has faced opposition, particularly in France and Poland, where increased Ukrainian imports resulting of lifting quotas and tariffs have sparked concerns.“I’m very confident that we can achieve this first step of getting closer together before the enlargement,” Hansen said.Mercosur Deal as a strategic alternativeLikewise, a potential trade war with the US strengthens the case for finalising the long-negotiated EU-Mercosur agreement.Hansen explained that some European agricultural products – such as wines, spirits, and dairy – are particularly strategic, as they serve as the EU’s key “export hammers” and as such require protection.ADVERTISEMENT“If the United States were to target such products, [thanks to an EU-Mercosur deal] we would have alternative ways to sell our products ensuring stability [to our farmers],” he said.Still, the Mercosur agreement poses risks, particularly for sensitive sectors like poultry, sugar, and beef. Hansen acknowledged these concerns but highlighted built-in safeguard clauses designed to protect European farmers.“For the first time in such an agreement, we have safeguard clauses within the tariff-rate quotas,” he noted referring to the tool used to regulate imports where a specific quantity of goods can enter at a lower tariff, while imports exceeding that quota are subject to higher duties.The message from the EU agriculture chief is clear though: by leveraging trade deals with Ukraine and Mercosur, the EU executive expects to navigate both economic uncertainties and geopolitical challenges while maintaining a competitive agricultural sector.ADVERTISEMENT
