Brussels in Brief

Friday, 28 February, 2020

EU leaders fail to find budget agreement 

EU leaders failed to find an agreement on the next Multi-annual Financial Framework (MFF) 2021-2027 at the Extraordinary Summit on 21 February. Despite 30 hours of talks, delegations were unable to find consensus on the bloc’s €1 trillion long-term spending plan, due in part to the shortfall created by the UK’s exit from the Union.

The plan, tabled by European Council president Charles Michel, would see a drop of €53.2 billion going towards the Common Agricultural Policy. Many in agriculture have spoken out against this cut in budget, especially in light of the higher environmental requirements expected of farmers under the Commission’s Green Deal. The current plan also aims to balance direct payments for farmers across the bloc, known as external convergence, and crosses out a provision for a minimum overall target for direct payments.  European farmers’ organisation Copa-Cogeca has sent letters to all EU leaders, requesting them to reconsider the budget for agriculture. They say that in order for farmers to be able to deliver ambitious environmental and climate goals, the EU must maintain “the level of agricultural spending in the next MFF.”

A spokesperson for the organisation also said that they fear that relying on countries to boost their own cofunding to make up for a Pillar 2 shortfall could “create big differences between member states and endanger the level playing field.” On 20 February, hundreds of farmers from Belgium, the Baltics, Ireland, Italy and Spain blocked the streets with 100 tractors and set off fireworks outside of the European Council in protest of higher EU agriculture subsidies. Despite a unified protest, there are contrasting opinions over how much the EU should equalise subsidy payments across the bloc. President Michel’s budget proposal suggests gradually lessening more than half of the gap between less funded countries and their richer western counterparts by 2027. 

At a Special Committee on Agriculture on 24 February, representatives from more than 20 EU countries spoke in favour of a two-year extension to the CAP transitional regulation. However, the Council will still have to negotiate a final decision in trilogue negotiations with the European Parliament, who are yet to come to a unified position and the European Commission, which has proposed a one-year extension to the transition.

EU concerned over US-China trade deal

MEPs on the Agriculture Committee raised concerns over the US-China trade deal at last week’s committee meeting amid fears it could undermine the EU’s landmark agreement with China on the mutual recognition of geographic indicators (see below). The agreement could see Chinese imports from the US double from around 20 billion today to 40 billion over the next few years. The majority of this is expected to be made up of soya and pork as China looks to move soya imports from Brazil to the US and due to the devastation African Swine Fever has caused on its domestic porcine industry.

However, other products such as meats and poultry, cereals, ethanol and seafood are also on the table. It was highlighted how China’s apparent willingness to relax controls on certain US farming practices banned in the EU, such as hormone treated beef and growth promotors in pork, would, if implemented, put EU exports to China at a disadvantage. That said, there is still some margin for movement over how this agreement will be implemented with the Chinese government needing to allay food safety fears from Chinese consumers and amid growing concerns over the spread of COVID-19.