Brazil asks EU to hold off on implementing deforestation law

By Lisandra Paraguassu

BRASILIA (Reuters) - Brazil on Wednesday asked the European Union not to implement regulations in its deforestation law at the end of the year as scheduled and asked for it to be revised to avoid hurting Brazilian exports.

In a letter to the European Commission seen by Reuters, the Brazilian government said the law banning the import of products linked to the destruction of the world's forests could affect almost one third of Brazil's exports to the EU.

The law passed in 2022 by the European Parliament was adopted in June last year, allowing 18 months for companies to adapt. The law applies to soy, beef, palm oil, coffee, cocoa, rubber, wood and derivatives, including leather and furniture.

"Brazil is one of the main suppliers to the EU of most of the products covered by the legislation, which correspond to more than 30% of our exports to the community bloc," the letter signed by the ministers of agriculture and foreign Affairs said.

"In order to avoid impact on our trade relations, we request that the EU not implement the EUDR (EU Deforestation-free Regulation) at the end of 2024 and urgently reassess its approach to the issue," the ministers wrote.

Brazil's exports of these products in 2023 reached $46.3 billion dollars, according to Ministry of Development, Industry and Foreign Trade data. The EUDR could affect some $15 billion in exports, the government calculates.

"We consider the EUDR to be a unilateral and punitive instrument that ignores national laws on combating deforestation," the letter complained, adding that the European law discriminated against countries with forest resources and increased cost for producers and exporters.

The EUDR has been an irritant in EU trade talks with Brazil and its partners in the South American Mercosur trade bloc.

European Union and South American negotiators who met in Brasilia last week said they made "significant progress" on contentious issues that have been holding up the long-overdue EU-Mercosur agreement.

While the free trade deal is separate from the EUDR, Brazilian officials are concerned that the law could be used to reduce their country's quota of agricultural products to the EU and want to seek some form of compensation if the European law is implemented.

(Reporting by Lisandra Paraguassu, writing by Anthony Boadle, editing by Deepa Babington)