As we reported on Monday, the European Union and Mercosur bloc reached a trade deal after 25 years of negotiations. Some of the main agricultural components of the agreement include:
- Beef – Mercosur is already a major supplier of beef with annual exports between 100,000 and 120,000 MT. With the new proposal, there will be an additional quota of 99,000 MT with reduced tariffs.
- Poultry – Mercosur is the lead supplier with Brazil exporting 300,000 MT annually. The agreement establishes an additional quota of 180,000 MT.
- Sugar – The agreement creates a quota of 180,000 MT with zero tax. The sugar will be directed to deficit regions of southern Europe and threatens France’s sugar exports.
- Corn – The EU already imports 25% of its needs with 6 MMT to 7 MMT coming from Brazil. The agreement includes an additional quota of 1 MMT of corn and unlimited imports of corn derivatives.This measure represents direct competition to French production of corn derivatives.
- Additional products – The agreement provides new quotas for pork, ethanol, rice, honey, sorghum, orange juice, cachaca, cheeses, yogurt, butter and fruit.
The agreement expands the scope of Mercosur agribusiness in the European market with an estimated gradual elimination of 4 billion euros in tariffs over the next few years. For the ag sector, Brazil is positioned to be the big winner and France the big loser.
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