Brazilian agribusiness is expected to be the main beneficiary of the Mercosur-European Union agreement.

247 - Brazilian agribusiness is expected to be the main beneficiary in the country after Mercosur and European Union leaders gave their approval this Friday (9) for the signing of the proposal, which could happen on the 17th. Integration between two of the world's largest economic blocs brings together 720 million people and more than US$ 22 trillion in Gross Domestic Product (GDP). For Brazil, the largest economy in Mercosur, the treaty expands access to a market of around 451 million consumers.

The agreement foresees the elimination of import tariffs on 77% of agricultural products that Mercosur sells to the European Union, according to a report published in [source missing]. G1 PortalThe sector could increase sales of products such as coffee, fish, shellfish, fruits, and vegetable oils, which will have import tariffs gradually reduced to zero in Europe.

The proposal foresees the elimination of import tariffs on 91% of goods traded between the European Union and Mercosur. According to European estimates, exports from the bloc to South America could increase by up to 39%, with the potential to generate around 440 jobs in the European continent.

Meat

The Brazilian Association of Meat Exporting Industries (Abiec) reported that Brazilian beef is subject to two types of tariffs for purchases by the EU. One of them is the Hilton quota, for prime cuts. Brazil exports 10 tons per year with a 20% tariff. This percentage will be reduced to zero if the agreement is approved. 

The tax on other types of beef is 12,8%, plus €221,1 per 100 kg. Brazil should stop paying this tariff if the agreement is ratified. 

Under the treaty, Brazil, Argentina, Uruguay, and Paraguay will be able to export a combined total of up to 99 tons per year, with an initial tariff of 7,5%.

Instant coffee

Coffee is the second best-selling Brazilian product to the EU in terms of export value, after soybeans. Whole bean coffee—which represents 97% of the sector's sales to the EU—will enter Europe without tariffs. 

Currently, the EU applies a 9% tax on soluble coffee and a 7,5% tax on roasted and ground coffee, explained the Director-General of the Brazilian Coffee Exporters Council (Cecafé), Marcos Matos. The EU-Mercosur agreement stipulates that tariffs on soluble and roasted and ground coffee will be reduced to zero within 4 years.

Soybean

The agreement will have no consequences for soybeans, which are the most exported Brazilian agricultural product to the European Union. The product already has a zero tariff for both the grain and the meal, pointed out the director of Economics at the Brazilian Association of Vegetable Oil Industries (Abiove), Daniel Furlan Amaral.

"This treatment has remained in place for many years. For this reason, the Mercosur-European Union agreement does not alter the tariff scenario for soybeans," says Amaral.