Brazil could double beef exports with Mercosur-EU agreement, says consultancy

Brazil can more than double beef exports to the European Union (EU) following the formalization of the free trade agreement between the European economic bloc and Mercosur. The estimate, still preliminary, is from the consultancy Agrifatto.

“Today, we export 5% of our volume to Europe, and this number could reach 12% or 13% with the agreement”, stated the CEO of Agrifatto, Lygia Pimentel.

Under the agreement, Mercosur will be able to export 99 thousand tons of beef carcass weight to the EU, 55% of the volume in chilled form and 45% frozen, with a tax rate of 7.5%. This volume will be reached in six increasing stages. Furthermore, the Hilton Quota, which currently allows the export of 10 thousand tons at a rate of 20%, will be exempt as soon as the agreement comes into force.

A large part of this new quota must be occupied by Brazil. According to Pimentel, the country already meets 86% of European demand and should maintain this leadership position in Mercosur. “Brazil is fully capable of meeting the new quota, even with the requirements imposed”, he assessed.

The CEO highlighted that the signing of the treaty, awaited for more than three decades, promises commercial advantages for the Brazilian livestock sector and the protein industry, but also brings regulatory challenges. Among the sensitive points is legal deforestation, often misinterpreted abroad, according to Pimentel.

“When they say that deforestation from 2021 onwards will not be accepted, it seems that Brazil wanted to deforest indiscriminately. But we have extremely demanding legislation, which provides clear limits, such as maintaining 80% of areas preserved in the Amazon”, he commented, criticizing what he classified as European protectionism. “These rules violate sovereignty, because they place limitations here that they themselves do not follow. We accept it, but it is a foreign country legislating over Brazil”, he stated.

Despite the criticism, Pimentel believes that the impact of the agreement will be positive. “Europe has always been a good payer and the agreement helps to dilute dependence on the Chinese market. But it will not be transformative: the quota is small and the increase in exported volume will be limited”, he considered.

By October 2024, Brazil had already exported 66,439 tons of beef to the EU, according to Agrostat, a foreign trade statistics system for Brazilian agribusiness.

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