By Ana Mano

SAO PAULO (Reuters) – Brazil believes European Union rules banning products coming from areas of deforestation are “an affront” of World Trade Organization (WTO) rules, Agriculture Minister Carlos Favaro said on Monday.

The EU rules took force in June and will ban products beginning December 2024, giving Brazil and other exporters time to adapt.

Brazil, a major commodities supplier, exported almost $12 billion worth of soymeal, soybeans, corn and beef products to the EU in 2022, according to trade data.

Favaro said records show only 2% of Brazilian farmers commit environmental crimes while the reminder abide with the rules and should be recognized. He said that if the EU continues not to recognize Brazil’s efforts to protect the environment, Brazil should boost trade relations with other partners.

One possibility would be to buttress blocs like the BRICS, which comprises large developing nations including Brazil, Russia, India, China and South Africa.

Brazil’s criticism of the application of the EU’s deforestation rules coincides with talks to finalize a comprehensive trade agreement between Mercosur, the South American trade bloc, and EU nations.

The EU and the Mercosur completed negotiations in 2019 but the deal has been on hold due to concerns about Brazil’s commitment to climate action.

Paulo Sousa, president of U.S. grain trader Cargill in Brazil, said Amazonian countries should have denounced Europe’s protectionist stance three years ago.

“Our timing is gone,” he said during a panel discussion at the same event attended by Favaro. “We have a very good and efficient diplomatic corps, but we have to enter the game field now.”

In a recent statement to Reuters, the European Commission (EC) disputed claims of protectionism from Brazilian agriculture lobbies. The EC said deforestation rules will apply to all trade partners “in an even-handed and non-discriminatory manner.”

Yet Brazilian soy and beef lobbies expressed concern about whether the EC had effective tools to determine whether a product came from an area of deforestation, and about provisions to classify countries by “deforestation risk.”

Regarding use of traceability systems to gauge deforestation, the EC said this was possible “so long as they help operators provide the geolocation of where commodities have been produced.”

The EC also said “products, even from countries with a high risk level, can continue to be placed on the EU market as long as the company will go through the required due diligence process proving they are deforestation-free.”

(Reporting by Ana Mano; Editing by Mark Porter and David Gregorio)

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