The free trade agreement between the European Union (EU) and Mercosur was finally signed last Saturday in Asunción, Paraguay. After more than 25 years of negotiations, the agreement was sealed amid strong opposition from European agricultural producers, who warn about the threat of competition from South American countries at more competitive prices.
Brazilian President Lula Da Silva did not attend the ceremony. Upset that the deal was not concluded during Brazil’s pro tempore presidency of the South American bloc, he chose instead to host the head of the EU, Ursula von der Leyen, the day before in Rio de Janeiro. She traveled to Paraguay the following day.
Despite the signing, several steps remain before the agreement enters into force. The most optimistic estimates point to 2027.
As noted in the previous edition of World Beef Report, in the specific case of beef the benefits for South American countries are twofold: the elimination of the 20% tariff on shipments within the Hilton quota (with Argentina being the main beneficiary, as it holds the largest volume under that quota), and the creation of an additional quota of 99,000 tons carcass weight (55% chilled, 45% frozen) with a 7.5% tariff. This volume will be phased in at a rate of 19,800 tons per year once the agreement comes into force.
