Brazil’s Beef Ultimatum: EU-Mercosur Trade Talks Endangered

Written by | Wednesday, September 13th, 2017

Brazil says that it will not propose a new offer under the ongoing EU-Mercosur trade negotiations until a proposal on ethanol and beef – the two areas of greatest concern for Brazil – is to be discussed again as well. Brazil has been willing to put aside sugar, another key area, in exchange for beef and ethanol. Both sides are currently negotiating technical aspects regarding a free trade agreement and Brazil’s demand came as the most outstanding piece of information in the current round of contacts held in Brussels between the EU and Mercosur, a South American grouping that includes Brazil, Argentina, Uruguay and Paraguay.

The parties have advanced on areas such as denomination of origin but made progress on public procurement as well. Brazil, however, insists that short-term benefits need to be ensured and the market for contracts should be open at the federal level rather than in lower administrations. Both sides would like to conclude the negotiations by the end of this year. Brazil wants to announce the conclusion at the ministerial meeting of the World Trade Organization (WTO) in Buenos Aires in December next year. The Brazilian negotiators, however, insist on a “balanced” deal and do not expect to make a breakthrough in the negotiations until after Germany’s general elections on 24 September.

For the Mercosur member countries, the EU is the first trading partner, accounting for more than a fifth of the bloc’s total trade in 2015. The EU’s exports to the region increased more than twofold between 2005 and 2015. Mercosur’s export to the bloc went up as well during the same time, from €32 billion to €42 billion. The EU’s biggest trading articles with Mercosur are machinery, vehicles and parts and chemicals and pharmaceuticals. In contrast, Mercosur’s biggest exports to the EU in 2015 were agricultural products such as foodstuffs, tobacco and beverages.


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