Brazil Urges EU to Reconsider Deforestation Law Impact on Exports

Brazil has urged the European Union to delay and revise its deforestation regulation, set to be implemented at the end of the year, to avoid negatively impacting Brazilian exports. The law, targeting products linked to deforestation, could affect $15 billion in Brazil's annual exports to the EU.

Brazil on Wednesday called on the European Union to delay the implementation of its deforestation regulation, scheduled for the end of the year, and revise it to prevent potential harm to Brazilian exports.

In a letter to the European Commission, seen by Reuters, the Brazilian government expressed that the law could impact nearly a third of Brazil's exports to the EU. This law, passed by the European Parliament in 2022, targets the import of products connected to deforestation and affects commodities like soy, beef, and coffee. The EU granted an 18-month adaptation period for companies to comply.

The ministers of agriculture and foreign affairs highlighted in the letter that Brazil is a key supplier to the EU for many affected products, which account for more than 30% of its exports to the bloc. The government stated that the $46.3 billion in exports from these products in 2023 could see a $15 billion reduction due to the regulation. Moreover, Brazil criticized the EUDR as a punitive and discriminatory instrument that overlooks national deforestation laws and adds costs to producers and exporters.

The EUDR has also posed challenges in EU-Mercosur trade talks, with Brazilian officials fearing a reduction in agricultural quotas to the EU and seeking compensation if the law is enforced.

(With inputs from agencies.)