A new study challenges claims around what the EU–Mercosur trade deal could deliver, arguing its benefits are overstated and "may disappear altogether".

The study warns that the EU could see "little or no growth benefits" and that small and medium-sized farmers, workers in exposed sectors and regional economies would be particularly affected.

It directly contradicts the assertion by the President of the European Commission, Ursula von der Leyen, that the Mercosur trade deal is "a win-win agreement" and that it will help increase EU agri-food exports.

Instead the study authored by economists Orsola Costantini and Alex Izurieta and commissioned by the NGO coalition, Climate Action Network (CAN) argues that the Mercosur deal could see farmers, workers, and regional economies lose out.

The authors outlined that "even small declines in agricultural producer prices could push thousands of farms into economic vulnerability, driving further land concentration in the agricultural sector and the dominance of large agribusiness".

"Our analysis shows that a drop of 2% in beef producer prices – consistent with official projections – would increase the number of economically unviable farms across several EU member states," the authors highlighted.

Mercosur

Costantini and Izurieta also state that consumers would "not necessarily benefit from lower prices".

"In highly concentrated food supply chains, lower producer prices are unlikely to translate into cheaper food because the gains are more likely to be captured by large processors and retailers," they warn.

One key argument that the authors of the report also put forward is that the EU–Mercosur agreement "is built on an outdated neoliberal trade framework centred on tariff cuts and market liberalisation".

They also claim that their findings suggest that the agreement is"not going to generate benefits in terms of economic growth".

"Rather than strengthening economic resilience or geopolitical autonomy, it risks reinforcing existing structural imbalances while contributing to the further fragmentation of the global trading system," Costantini and Izurieta added.