A new study has shown the proposed trade deal between the EU and Latin American trade bloc Mercosur would have a negative impact on key sectors such as beef.
The assessment was carried out by the European Commission as trade talks continue with the bloc, which includes Brazil and Argentina.
President of European farmers’ group Copa Martin Merrild said: “This study confirms our views that the EU meat sector could be hit hard by some trade deals unless conservative tariff rate quotas on imports are imposed. We believe that a potential deal with Mercosur could hit the EU agriculture sector badly, especially beef.”
Trade negotiations between the EU and Mercosur members started in 1999, but have been delayed several times and had been at a complete standstill since 2004.
But Government changes in Brazil and a renewed appetite for trade deals among the Mercosur countries meant talks were re-opened last May, and Argentina’s commerce secretary Miguel Braun has recently said he expects a comprehensive deal which covers agriculture to be struck within two years.
It is unlikely the deal would be ratified before Britain leaves the EU, but Brazil’s foreign minister Jose Serra has already said he would like to negotiate a separate deal with the UK.
“Our idea is to open right away a negotiation between Mercosur and the UK, which has a more open economy and has a very important position in relation to investment in Brazil yet imports relatively little from Brazil”, he added.
“As soon as the new minister of external affairs [Boris Johnson] takes office, I will make contact with him to reinforce existing initiatives and explore how to advance them under the auspices of Mercosur.”
This could be a hint Mercosur would seek a deal with the UK which is similar to the EU-Mercosur one.
Canada’s finance minister, Bill Morneau, has already said any UK-Canada trade talks would be ‘founded on the basis of CETA’, the deal between the EU and Canada.
Mercosur’s biggest exports to the EU are agricultural products, which make up 43 per cent of the total, and raw materials, which account for 28 per cent.
NFU economist Lucia Zitti said Mercosur is a very competitive exporter and giving the bloc preferential access to the single market would increase EU reliance on beef, poultry meat and sugar – sectors the union believes should be treated as sensitive in any future UK-Mercosur trade talks.
“In a post-Brexit world, our continued access to the EU single market for agricultural products should not be fettered by tariffs or non-tariff barriers. Otherwise there is a risk the UK could lose market share in the EU by being replaced by EU free trade agreement partners which have signed preferential trade agreements”, she added.