Beef and Olive Oil Deal Breakers in Ongoing EU-Mercosur Talks

Sensitive agricultural products are the sticking points in the almost two-decade-long negotiations of the EU-Mercosur Association Agreement.

Feb. 5, 2018
By Isabel Putinja

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Negotiations between the European Union (EU) and the South American trade bloc Mercosur are ongo­ing as each region aims to pro­tect its agri­cul­tural sec­tor.

The EU has given far too much on agri­cul­ture to the Mercosur coun­tries in the nego­ti­a­tions, with­out get­ting much in return.- Pekka Pesonen, Copa-Cogeca

The aim of the EU-Mercosur Association Agreement is to elim­i­nate high tar­iffs and cus­toms duties in sev­eral sec­tors. With such an agree­ment in place, EU com­pa­nies would have bet­ter access to Mercosur’s mar­ket of 260 mil­lion con­sumers. At the same time, the Mercosur coun­tries (made up of Argentina, Brazil, Paraguay and Uruguay) would ben­e­fit from pref­er­en­tial access to the 28-coun­try-strong EU mar­ket.

European farm­ers have asked the European Commission to reject any con­ces­sions” in sev­eral agri­cul­tural sec­tors like beef, poul­try, sugar and orange juice, cit­ing con­cerns about unfair com­pe­ti­tion and a poten­tial reduc­tion in growth and jobs. In a press release dated January 24, Copa-Cogeca, an orga­ni­za­tion that rep­re­sents 66 farm­ers’ orga­ni­za­tions from across the European Union asked the EU to not make any con­ces­sions dur­ing the trade talks.

Speaking at a press con­fer­ence in Brussels on January 24, its Secretary-General Pekka Pesonen took a stand on behalf of the EU’s 22 mil­lion farm­ers: The EU has given far too much on agri­cul­ture to the Mercosur coun­tries in the nego­ti­a­tions, with­out get­ting much in return,” he declared. A Joint Research Centre (JRC) report shows a poten­tial trade deal could cost the EU agri­cul­tural sec­tor over 7 bil­lion euros… Farmers and their coop­er­a­tives should not have to pay the price of a poten­tial trade deal with Mercosur coun­tries in return for con­ces­sions in other sec­tors.”

The orga­ni­za­tion also out­lined its con­cerns in a let­ter sent to the EU Council, Members of European Parliament, the European Commissioners for Trade and Agriculture and Rural Development and the Vice President of the European Commission.

Beef is one of the most con­tentious agri­cul­tural prod­ucts being dis­cussed dur­ing the nego­ti­a­tions. The EU cur­rently imports 75 per­cent of its beef, or 250,000 tonnes per year, from the Mercosur coun­tries tar­iff-free. The South American trade bloc is ask­ing for the EU to take a fur­ther 70,000 tonnes but EU beef farm­ers fear the poten­tial neg­a­tive effects of over­sup­ply on the EU mar­ket.

At the same time, Mercosur is a major mar­ket for EU agri­cul­tural prod­ucts like olive oil, frozen pota­toes, malt, pasta, choco­late, fruit, wines and spir­its. EU exporters of these high-value prod­ucts could ben­e­fit from the reduc­tion or removal of tar­iffs.

But in Argentina, the Argentinian Olive Oil Federation is ask­ing for olive oil to be excluded from nego­ti­a­tions in fear that reduced entry tar­iffs would harm the coun­try’s own olive indus­try and cause a loss of jobs in the sec­tor. For Argentina, olive oil has been one of the stick­ing points in EU-Mercosur nego­ti­a­tions since 2010.

In fact, nego­ti­a­tions on the details of the EU-Mercosur trade deal have been ongo­ing for almost two decades and, after an impasse, were restarted in 2010. There were hopes that con­sen­sus would be reached by the end of 2017 but talks will con­tinue on January 29 and 30 at a meet­ing of EU agri­cul­ture min­is­ters. Once a deal is even­tu­ally worked out, the EU will be the first trade part­ner to con­clude a trade agree­ment with the Mercosur bloc.


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