16 February 2018

Protectionist lobby in full swing for EU-Mercosur negotiations

by Bill Wirtz

The EU is currently negotiating a trade agreement with the four founding members of Mercosur (Argentina, Brazil, Paraguay and Uruguay). It should come to nobody’s surprise that the opposition to such a trade deal is already in the making. But who are these campaigners who so vehemently reject the idea of intercontinental trade?

This month, the “consumer rights” NGO Foodwatch published a report on free trade agreements which are being negotiated by the European Union.

The organisation accuses the EU of repeating the mistakes of the Transatlantic Trade and Investment Partnership (TTIP) and the EU-Canada Comprehensive Economic and Trade Agreement (CETA), in not including the public in a large consultation process. It is certainly the case that there is a democratic deficit in EU, but it is odd that these NGOs should be the ones to complain about the process, given that they have completely undermined it. In 2016, the European Centre for International Political Economy (ECIPE) published a 147-page report regarding the rise of anti-TTIP advocacy groups, in which it writes this about the consultation process for TTIP:

“During the ISDS [investor-state dispute settlement] consultation, 97 percent of all replies were submitted by a small number of campaign groups. These responses were often identical or at least very similar to one another. Prior to the consultation, a few anti-TTIP civil society organisations had set up easy-to-use online tools to facilitate participation in the consultation proceedings.”

Flooding policy-makers with copy-pasted position papers undermines the consultation process. Instead of constructive cooperation, these activists are trying their best to be as disruptive as possible. They prefer to fear-monger about GMOs and palm oil (despite seemingly knowing very little about both of those) in order to recreate for the Mercosur negotiations their objections to trade agreements with the United States and Canada. They believe that if our trading partners do not accept every last one of our nutritional standards, then we cannot trade at all. However, importing goods produced to different standards than EU norms does not in the least “undermine” EU standards. As long as consumers are aware of the origin of their consumption, mutual recognition of standards poses no threat to anyone’s legislation.

The Foodwatch report also treats the idea of trade discrimination with contempt. This is well illustrated in a chapter on Mexican trade relations on page 47. The researchers write:

“In 2001 Mexico introduced a tax on all soft drinks flavoured with sweeteners other than cane sugar (e.g. with beet sugar or isoglucose, a syrup made from corn or wheat starch). The exception for drinks sweetened with cane sugar protected the country’s own sugar cane production.”

They continue by explaining that such taxes are being challenged under WTO trade rules, and that industry lobbyists oppose them through the claim of “a form of trade discrimination”. The EU, of course, is well known for trade discriminatory practices aimed at protecting its own producers, for instance its famous ban on beef treated with the estradiol-17β hormone. Such agricultural protection is always a major sticking point in trade negotiations, so it is certainly an odd point for anti-trade activists to bring up.

The report’s tenor is well illustrated by this statement from one of its authors, Thomas Fritz, during the Foodwatch press conference:

“Our conclusion is that due to these FTAs [Free Trade Agreements], food trade is indeed likely to grow, along with the risks posed to the consumer and the environment.”

Take away the concerns about democracy, judicial procedures, or even those of food standards: these activists would oppose free trade no matter what, because it increases food trade. “The risk to the consumer”: what risk are we talking about? The risk of falling food prices and increased quality? The risk of increased choice? And what “risk” are we exposing the producers in South America to? The risk of increased production and economic prosperity?

The numerous organisations that lobby for the suppression of free trade for a vague sense of consumer protection that doesn’t actually protect the consumer from anything, need to be opposed for what they are: protectionists. They may not be the protectionists who believe that Europeans should only buy European food because of nativism, but they are comparable ideologues.

If we want to improve our living standards while simultaneously maintaining fruitful diplomatic relations with the rest of the world, we cannot shut ourselves off from the advantageous practice that is free trade. In fact, free trade doesn’t make it mandatory for consumers to buy foreign products; it merely gives consumers the possibility to purchase their own preferences, instead of those products which adhere to the moral standards of a handful of political activists.

If you want to stand on the side of consumers, you need to stand for free trade.

Bill Wirtz

Bill Wirtz is a Policy Analyst for the Consumer Choice Center.