Eucolait applauds European Parliament approval of enhanced EU-Chile agreement and trade concessions

01 Mar 2024 --- Agri-food producers in the EU and Chile are anticipating easier trade flows for their commodities following the European Parliament’s approval for the EU-Chile Advanced Framework Agreement. The deal will eventually lead to duty-free access to EU dairy products on the Chilean market, including the removal of the current quota for EU cheeses.

Certain investment and political aspects of the deal still require ratification by all member states.

“This is important as trade is an integral part of the solution to today’s global challenges such as ensuring food security and climate change mitigation,” states Eucolait, a European trade association representing the dairy wholesalers.

“While trade agreements cannot be expected to address all environmental or social challenges that we face, they do create a framework within which further discussion and progress is possible.”

Dairy hopes for swift deal
Eucolait hopes for a “swift entry into force” of EU’s Chile deal — alongside one set up with New Zealand last November — will soon be followed by other free trade agreements that are close to being finalized.

European dairy exports to Chile reached a total value of €130 million (US$140.8 million) last year, according to Eucolait. Cheese (mainly gouda type) is by far the main category, accounting for some 80% of the total with 28,000 metric tons of product exported in 2023.

The deal, the political agreement of which was announced in December 2022 and signed a year later, expands on the scope of the existing EU-Chile accord which entered into force in 2003.

Beyond market access concessions, Eucolait considers the new agreement as holding key “geopolitical and strategic importance” that will “promote value-based trade.” 

Crucially, the agreement includes an “ambitious” trade and sustainable development chapter and a stand-alone chapter on sustainable food systems.

“Cumulative impact” of EU deals
The European Commission has stated that upcoming trade agreements with ten foreign partners will result in a “positive cumulative impact” on the EU agri-food trade balance.

A JRC analysis of the ten new agreements (concluded or under negotiation) finds that EU exports to the ten partners will increase strongly by 27% (US$3.79 billion) in a “conservative” scenario and by 38% (US$5.2 billion) in an “ambitious” scenario, compared to a baseline in 2032.

The analysis covers EU deals with Mercosur (Argentina, Brazil, Paraguay and Uruguay) and New Zealand, alongside the updated agreements with Chile and Mexico, as well as trade agreements under negotiation with Australia, India, Indonesia, Malaysia, the Philippines and Thailand.

Cheese accounts for some 80% of total EU dairy exports to Chile in 2023.Overall, the EU agri-food trade balance is forecasted to increase by EUR 25 million (USD$27 million) and EUR 311 million (US$337 million) million in the conservative and ambitious scenario, respectively. 

Farmers against free trade
In January, French farming unions hit back at the host of oncoming EU free-trade agreements, fearing “unfair” competition from products arriving from overseas.

This comes during a time when EU policymakers are ramping up pressures on agri-food producers to implement greener — and sometimes costlier — farming practices.

Other opponents to EU free trade agreements include civil society organizations from South America and Europe, which are calling for the immediate halt of the EU-Mercosur trade deal. 

The signing organizations highlight the detrimental consequences a free trade agreement would bring, arguing that the trade agreement not only exacerbates deforestation and greenhouse gas emissions but also contributes to “human rights violations, job losses and animal suffering.”

By Benjamin Ferrer