Mercosur-European Union agreement promises to open new markets for agriculture

The Mercosur – European Union agreement was the topic of the live broadcast of the Conexão Brasília project this Tuesday, 27th. Participating in the debate were the Secretary of Commerce and International Relations of the Ministry of Agriculture, Orlando Ribeiro; the executive director of Citrus BR, Ibiapaba Netto and the Markets manager of the Brazilian Animal Protein Association (ABPA), Luís Rua. The live is a partnership between the Parliamentary Agricultural Front (FPA) and Canal Rural.

The guests discussed the main points and possible impacts that this agreement between the two economic blocs could bring to the Brazilian agricultural sector. The Mapa secretary recalled the effort that the current government made to ensure that negotiations between Mercosur and the European Union were concluded.

“By the end of the year the agreement will be concluded, the legal and technical review. When the text is translated next year, under Portugal's rotating presidency, we have a first opportunity for this agreement to be signed and then to be submitted to the European Commission and the National Parliaments of each of the European countries and the countries of Mercosur”.

The executive director of Citrus BR, Ibiapaba Netto, also praised the government's commitment to the agreement negotiation process. According to him, the private sector no longer believed in the conclusion of the treaty. “The finalization of this agreement was a milestone. We have to give all the credit to this government, they took the initiative to move forward with this negotiation that has a lot to offer for Brazil and its partners”.

According to Ibiapaba, the agreement will benefit the orange juice sector, in particular, due to the fact that the European Union is responsible for 70% of Brazil's food exports. “It is our largest net orange juice customer. It’s good for consumers who will have the opportunity to have a more affordable product.”

The Market Manager of the Brazilian Animal Protein Association also came out in defense of the agreement. “In a way, it renews our hope that Brazil can conclude other trade agreements with relevant countries. Today, the focus is on Asia, with the hope that we can also move towards other regional agreements”.

According to Luís Rua, the European Union is the sixth largest importer of Brazilian poultry meat. In 2019, he reinforced, around 260 thousand tons of chicken were sold to the block. “They brought in revenue of around 700 million dollars. It is a very important market for us and one that we view very favorably in poultry and swine farming.”

What changes with the agreement

Orlando Ribeiro clarified that, with the implementation of the agreement, the EU will eliminate its tariffs on 87% of agricultural products for Brazil. For the government, the advantage of these tariff exemptions will be fundamental for the agro sector, especially for some Brazilian products that are exported in large volumes. He also mentioned that the trade agreement also establishes quotas for exports on some items, such as beef, chicken, sugar, ethanol, rice, honey and corn.

“There are a series of openings in traditional products, for example, fruits, melons, lemons, limes, watermelons, which are products that will have privileged access to the European market”, he pointed out.

For Ibiapaba Netto, in the case of the orange juice sector, these tariff changes will be beneficial, as the extra income due to the tariff cut will be able to be used for investment and technology. According to him, the 50% cut in export tariffs will generate extra income of US$75 million. And, in 10 years, this tariff will be zero. “It’s money coming in for Brazilian companies, for Brazilian producers, we only have to gain,” he said.

Environmental issues

The guests also addressed the environmental issue as a condition for the implementation of the agreement. In the view of the director of Citrus BR, environmental pressure is a point of attention for everyone, but he defended the government's actions. “I am absolutely certain that the Ministry of Agriculture is fully capable of establishing the truth because what we are discussing here is not the fact itself, but the version of the fact”.

As for Luís Rua, the issue needs a lot of attention to prevent all the work, during these 20 years of negotiation, from having a negative outcome. “We know that there is a lot of interest and protectionism at stake on the European side. This is hard work to combat misinformation, by our government to demystify some of this fake news that ends up harming us.”

Rua also clarified that chicken production in Brazil is completely outside the Amazon biome, with the highest levels of quality, health and sustainability. “We produced a series of materials explaining the sustainability of our sectors that were delivered to several parliamentarians, members of the European commission, to further improve sustainability and animal welfare indicators”.

The ABPA Markets Manager also made a comparison between poultry meat production between the two blocks. “Brazil produces chicken with 50% less carbon emissions than chicken produced in Europe. We have been selling there for 40 years and increasingly want to export with quality, with health and also helping with food security”, he considered.

In his final considerations, the secretary of the Ministry of Agriculture defended the government's actions on issues related to the environment. “These restrictions that they place in the agreement due to alleged environmental problems, this is an issue that is being clarified. Depending on agriculture, Brazil could make an agreement with any country in the world. We are very competitive”, concluded Orlando Ribeiro.