The EU - Mercosur Agreement in Agriculture, Opportunities and Threats for European Producers

Purpose: The paper tackles the problem of opportunities versus threats resulting from the Agreement between European Union and Mercosur countries in the agricultural sphere. Negotiations on the establishment of the EU-Mercosur free trade area are certainly one of the main integration processes of the current decade in the global economy. Mercosur deal could lead to a shift in world trade flows. Mercosur countries have enormous potential in the field of agriculture, as well as different standards in terms of production techniques, plant and animal health in comparison to the European Union. The South American exports may cause significant imbalances on the EU market in different spheres (economic, environmental and even social). That is why those prospects are worth examining. Design/Methodology/Approach: In the article, apart from statistical information, reports of the European Commission and United States Department of Agriculture (USDA) were examined. The study analyzes trade statistics as well as reviews literature on the Mercosur Agreement. Document analysis, comparative methods, and partial SWOT techniques were employed. Findings: The research clearly shows that in the agricultural sector, the benefits of concluding the Agreement are illusory, while the risks may be significant. The threats concern, apart from economic/social problems, environmental and animal welfare issues. In terms of export benefits, even the promising wine and olive sectors face significant non-tariff barriers on the Mercosur market. By contrast, many sectors of European agriculture (beef, cereals, poultry, biofuels) could be allowed to freely import South American products, most of which do not meet European standards. Practical Implications: The results of the research shall be of interest for scientists, students, politicians and decision makers. Originality/Value: In this research not only results of European and North American research were analyzed, but also economic literature originating from Mercosur countries were studied and quoted. It is a comprehensive study covering both some opportunities and real threats for European producers and consumers. It is clearly stated, without any camouflage, that threats can even weaken the crucial issue of European food safety.