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. 

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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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