How will the Europe-Mercosur deal impact food?

A European deal with Mercosur – a bloc which includes Argentina, Brazil, Paraguay and Uruguay – was finally signed this month.

However, while the deal may have been European, it was not in fact with the EU.

The deal was actually done between Mercosur and the European Free Trade Association (EFTA), which is made up of Iceland, Liechtenstein, Norway, and Switzerland.

Its deal with Mercosur aims to liberalise trade between both blocs.

What does the Europe-Mercosur deal entail?The deal between Mercosur and EFTA sees quite significant market liberalisation, with both sides noting improvement access for 97% of their exports.

EFTA goods exported into Mercosur, for example, will benefit from progressive tariff elimination.

Fish and other marine products imported into the EFTA states from Mercosur countries will have all customs duties abolished. Fish and marine products from EFTA states, imported into Mercosur countries, will have most customs duties reduced or eliminated.

Over a period of 15 years, the agreement will reduce or remove duties on more than 95% of goods exported from EFTA to Mercosur.

Other products originating from EFTA that will see tariffs gradually eliminated when exported into Mercosur are cheese, coffee, chocolate, beef and lamb meat, spirits, sweets, energy drinks and wines.

Conversely, EFTA countries are making allowances of their own, including tariff preferences, duty-free quotas and full liberalisation, when importing Mercosur agricultural goods such as beef, poultry and pork, coffee and maté, red wine, ethanol and bioethanol, and prepared food products like bakery goods and preserves.

Mercosur and EFTA have guaranteed national treatment (when imported goods are treated no differently from nationally produced goods) for each other’s fishing and agriculture sectors.

Both parties in the trade deal also committed to further manage deforestation, and to promote certification schemes and measures for forest restoration.

What about Mercosur’s deal with the EU?Mercosur’s deal with the EU, which was reached in December last year, has yet to be finalised. It could stay this way for a long time to come.

The official legal text had been expected to be sent for ratification this month, but recent reports suggest that the deal is not just delayed – but put on hold.

Until the deal is submitted for ratification, it cannot be rolled out.

The deal still sees strong opposition from EU member states, including France, Poland, Austria and the Netherlands, due to fears that it opens up EU farmers to competition from South American goods. Countries such as Argentina and Brazil are some of the world’s biggest producers of agricultural goods.

The agreement reached on 6 December would liberalise trade between the EU and Mercosur extensively. The deal will aim to lower tariff and non-tariff barriers, in order to increase trade between the two blocs. It also aims to create stronger rules around food standards and geographical indicators.