A Mercosur trade deal has been agreed, the European Commission announced on Friday. The Mercosur trading bloc has got a 99,000t beef quota to export to the EU at preferential rates, to be implemented over a five year period.
European Commissioner for Agriculture Phil Hogan said that it “presents some challenges for European farmers". A €1bn transition fund for European farmers will be made available to help adjust to market changes caused by the Mercosur trade deal.
“The EU-Mercosur agreement is a fair and balanced deal, with opportunities and benefits on both sides, including for Europe's farmers,” Hogan said.
“Our distinctive, high-quality EU agri-food products will now get the protection in Mercosur countries that they deserve, supporting our market position and growing our export opportunities.
"Today's agreement also presents some challenges to European farmers and the European Commission will be available to help farmers meet these challenges.
"For this agreement to be a win-win, we will only open up to agricultural products from Mercosur carefully, with carefully managed quotas that will ensure that there is no risk that any product will flood the EU market and thereby threaten the livelihood of EU farmers.”
Reduced tariffs
The EU agri-food sector will benefit from reduced tariffs on EU export products, chocolates and confectionery (20%), wines (27%), spirits (20 to 35%) and soft drinks (20 to 35%).
The agreement will also provide duty-free access subject to quotas for EU dairy products (currently 28% tariff), notably for cheeses.
“I measure my words carefully when I say that this is a historical moment.
"In the midst of international trade tensions, we are sending today a strong signal with our Mercosur partners that we stand for rules-based trade,” president of the European Commission Jean-Claude Juncker said.
“This is obviously great news for companies, workers and the economy on both sides of the Atlantic, saving over €4bn worth of duties per year.”
Cut red tape
The agreement will simplify border checks, cut red tape and limit the use of export taxes by Mercosur countries.
Under the deal, the EU and Mercosur commit to effectively implement the Paris Climate Agreement.
A dedicated sustainable development chapter will cover issues such as sustainable management and conservation of forests, respect for labour rights and promotion of responsible business conduct.
EU food safety standards will remain unchanged and all imports will have to comply with the EU's standards.
Both sides will now perform a legal revision of the agreed text to come up with the final version of the association agreement and all its trade aspects.
The Commission will then translate it into all official EU languages and submit the association agreement to EU member states and the European Parliament for approval.
Read Phelim O'Neill's analysis of how the deal will impact on Irish and European beef prices.
What is Mercosur and why should farmers be afraid of it?