Christos Loukas // 21 January 2026

Frédéric Bastiat was a French economist, journalist, and member of the National Assembly after the 1848 revolution. He was one of the most prominent critics of protectionism, arguing tirelessly, often in an ironic or mocking manner, in favour of free trade as a means to promote material prosperity. The articles and stories he wrote to popularise economic concepts feature a recurring theme: ‘what is seen and what is not seen’. Understanding economic – and all social – phenomena requires us to look beyond the immediate effects to the broader impact of each of our decisions. So, what would Bastiat say about the European Union-Mercosur trade agreement?

The EU–Mercosur agreement is a package that reduces tariffs and other trade barriers, with special arrangements for ‘sensitive’ agricultural products and clauses/conditions on standards and enforcement. In practice, it opens markets in both directions and reignites the old debate about protectionism. What we see are farmers who feel that their income will be reduced. And we’re not just seeing it, we’re bombarded by it, nonstop, on TV, on the internet, and in road blockades across the country. It is true that if imported products are cheaper than domestic ones, consumers will prefer them, farmers’ incomes will fall, and some of them will be forced to lose their jobs. But what are we not seeing?

What we are not seeing is the benefit that this trade agreement will have for the average consumer. Lower prices for products mean an increase in income and the ability to buy more goods and services. The argument that ‘these prices are too low to secure my income as a farmer and imports should be banned’ is essentially equivalent to saying ‘I don't want you to have cheaper products so that I can enjoy higher profits.’ Of course, the first statement is more innocent than the second. Professionals in the agricultural sector who propagate such ideas are considered to have a fair claim; however, if someone were to say, ‘Don't buy cheap fuel from abroad because it will hurt my company’, or ‘Don't let foreign banks compete in banking services because it will reduce my profits’, there would be an immediate public outcry. In all the above cases, however, the essence is the same. An individual, group, or firm is seeking protection and privileges, and the consumer must bear the additional financial burden. In a country like Greece, one of the poorest in the European Union, such arguments, which further deplete household income, should be treated with suspicion.

What is also not seen are the opportunities that Europeans will have to export to Mercosur countries once the agreement is ratified. These gains are coming, but people often focus on what is in front of them now and therefore ignore them.

But farmers will be left unemployed, isn’t that a bad thing?

Greece has secured protection for 21 national protected designation of origin (PDO) products, mainly relating to feta cheese and olive oil. There are already many Greek companies in the primary sector that export to Mercosur countries, and this agreement will make it easier for them to reach a market of almost 300 million consumers. It seems that not only will it not harm our economy, but quite the opposite. Let us consider, however, a more pessimistic scenario in which this change is detrimental to the primary sector.

In this case, yes, unemployment will increase in the short term. This is the obvious part; what is not obvious is that we will be able to spend our extra income on other goods. The money we don't spend on food could go towards clothes or children's toys, for example, allowing these sectors to increase production and employment. Of course, we will see unemployed farmers, but no one will see the new jobs that are created in this way. Yes, it may require retraining workers or geographical relocation, and, of course, it requires time, which is why we need retraining programmes for workers and a free market that can quickly absorb the workforce, not protectionism that raises prices for everyone.

Wages are lower in Latin America, and they have lower costs because they do not need to abide by the same environmental regulations as we do. Isn’t it a problem that there is unfair competition?

With regards to production costs, the answer is that this is precisely why there must be free trade between Mercosur and the EU. Mercosur countries have a comparative advantage in agricultural products because their opportunity costs of production are lower. The benefit of international trade is that each country can specialise in the production of goods that it can make relatively more cheaply than others. Thus, with the right allocation of production, we can maximise total output.

As for the second part, the situation is a little more complicated. Of course, the rules governing agricultural production will differ between the two blocs of states. However, the regulatory framework in these Latin American countries is not as lax as it is often portrayed. There have been cases of rule violations due to corruption, but it is not a situation of complete lawlessness.

We must always look at what lies behind all the various arguments in the economic sphere. If we dig deep enough, we often find that beyond the rhetoric of justice and equality, producers often seek to profit at consumers’ expense by preventing competitors from entering the market. Bastiat would go one step further and try to take the argument to its logical conclusion to reveal its absurdity. Why not ban imports from Spain, Portugal, and Italy? They produce the same agricultural products as Greece and compete with national production. Let’s impose tariffs. Now, within the state, why shouldn't oil producers in northern Greece demand that those in the south be prohibited from sending their products north, since they are also their competitors? The logic of self-sufficiency pushes us in this direction step by step, revealing its absurdity.

Christos Loukas is Research Programs Assistant at the Centre for Liberal Studies – Markos Dragoumis (KEFiM)

This blog is a translation of an article which originally appeared in 'Athens Voice'.