“an eye for an eye” against European protectionism

If Europeans are so zealous in relation to climate change and environmental protection, they should accept a challenge to verify, point by point, the real level of sustainability of their countries in comparison with Brazil. Who proposes this kind of environmental checklist is Senator Zequinha Marinho (PL-PA), author of the Bill of Reciprocity (PL 2088/2023), which is being discussed in Congress.

The Environmental Reciprocity Law provides for the adoption of the “an eye for an eye” criterion, establishing that only “goods and products originating from countries that adopt and comply with levels of greenhouse gas emissions equal to or lower than those of Brazil can be made available in the Brazilian market. ” and that “comply with environmental protection standards compatible with those established by Brazilian legislation”.

“Now, if it is valid for Brazil, why is it not valid for them? Let’s get to the facts. While Brazil has an area of ​​58.5% of its territory preserved with native forest, the United Kingdom has only 13%. In Denmark, this forest cover is just over 14%. These countries, in addition to importing our commodities, should be inspired by Brazil’s environmental rules and standards,” points out Marinho.

The senator also cites the example of Norway, the second largest supplier of energy to Europe, behind only Russia. “They explore for oil, benefit from this industry, but finance NGOs – through the Amazon Fund – to prevent the release of a prospecting study for oil production in Foz do Amazonas”, he argues.

The idea is to force bilateral dialogue

Proposed legislation with reciprocal measures to trading partners has significant support in Congress, and is seen as a way to force bilateral dialogue.

In the background is the stalemate in the European Union-Mercosur agreement, after an amendment to the environmental requirements presented by the European bloc in a side letterand the approval of the anti-deforestation regulation that will oblige companies to prove that the products purchased do not come from areas deforested after 2020. The European rule does not differentiate illegal deforestation from the legal conversion of areas for agriculture, respecting the Brazilian Forestry Code.

For Samantha Piñeda, a lawyer specializing in Socio-Environmental Law, Europeans have not yet realized that they would have a lot to lose in a trade war with Brazil.

“It would be much worse if another country tried to do this and we were prejudiced by larger trade issues. Because Brazil significantly buys cheese, wine and olive oil from Europe, and they don’t have a lot of other things to export to us. If we block this, they lose more than Brazil”, he evaluates.

She says she is in favor of the Reciprocity Law in a broad way, and not just mirroring the Forest Code. “If we look at the products that we import from Europe, most of which are industrialized, and we start making an environmental requirement in terms of emissions for countries whose industry is based on burning fossil fuels, we can also create protectionism for our processes, for our products. . Because here we have clean and renewable energy”, he emphasizes.

European concern would be marketing, not environmental

The lawyer sees the Reciprocity Law as a “sensible and viable” measure to defend against European protectionism. “They developed in an unsustainable way, emitting greenhouse gases and wiping out diversity and flora. And they don’t want us to develop in a minimally sustainable way. That’s why you can see that the concern is not environmental, but marketing,” she says.

According to the regulation approved by the European Council in May, buyers of palm oil, cattle, soy, wood, cocoa, coffee and rubber, in addition to derivative products such as chocolate, leather, furniture and paper, will have to prove that these items have not been produced on land that has suffered deforestation or forest degradation after December 31, 2020, and which also did not infringe human and indigenous peoples’ rights.

The law comes into effect at the end of 2024. A year later, however, a review is planned to eventually incorporate other biomes, such as the Cerrado, into the requirements.

For the Confederation of Agriculture and Livestock of Brazil (CNA), the European law will result in increased costs for producers and fails to differentiate between legal and illegal deforestation and to disregard the stocks of land in each country. The entity considers that Brazilian producers already comply with most of the environmental requirements, and is concerned about the costs to prove good practices in the chains, from end to end.

Going to the WTO doesn’t do much good these days

With regard to the Reciprocity Law or the activation of the World Trade Organization (WTO), the preference is still to seek dialogue. “Negotiation is always the best way, but a dispute in a multilateral body should not be ruled out. But a process of this nature takes years, and as the WTO’s appeals body is not working, the real gain in the case of success in a dispute would not happen now either”, says Sueme Mori, director of International Relations at the CNA.

The Reciprocity Law has the support of the Brazilian Agribusiness Association (ABAG). For the entity, this does not mean that Brazilian companies will fail to comply with the additional requirements.

According to Ingo Ploger, vice-president of ABAG, the requirements are largely innocuous and will increase the price of products in the European market. He defends that Brazilian sectors and associations inform the European consumer of this reality, acting from a broad front, which involves politics, reciprocity law, and joint action by Mercosur with the European Union and bodies such as the WTO and the OECD.

The understanding is that the European Union would be hiding from its citizens the real costs of the measures, which carry the mistake of treating tropical agriculture from the same point of view as countries with a colder climate. Restricting the import of biofuels (ethanol) for addition to gasoline or use in flex fuel engines, for example, takes away a consumer option and raises the price of fossil fuel to a value three times higher than in Brazil.

European consumers will pay up to 50% more, without need

“By requesting another series of certifications proving non-involvement in deforestation, products will increase by up to 50%, even knowing that many of these products already have sufficient and highly credible certifications. Brazil, like Mercosur, will meet these requirements, because ‘the customer rules’. However, we know that, unfortunately, he is unaware that he will pay a high bill, without reaching the announced goal”, emphasizes Ploger.

ABAG’s criticism of the Europeans is that they did not previously consult their strategic allies regarding the anti-deforestation law, contrary to what the United States has been doing. This would be violating the principles of the WTO.

“By acting in this way, the EU puts its trade allies in a give-or-take situation. In situations like this, Bill No. 2088, of 2023, is a strong signal from the Brazilian parliament that unilateral legislation that restricts international trade will have strong reciprocal responses”, says the vice president of ABAG.