EU-Mercosur Treaty: Breakfast Conference on 8 July
Breakfast-Conference: The EU-Mercosur Treaty – Challenges And Opportunities In Commercial Diversification
On Monday 8 July, Holland House Mexico organized a breakfast seminar in collaboration with the Chambers of Brasil and Argentina, CAMEBRA and CCMA.
The agenda was aimed at identifying some of the opportunities and challenges that are to be expected under the new EU-Mercosur Treaty. After nearly 20 years of negotiation, this Treaty links more than 770 million people as part of the world's biggest free trade area.
The Treaty Entails The Following Main Points:
- Tariff reductions: The EU would eventually abolish 92% of the taxes on Mercosur imports. Mercosur would gradually eliminate its duties on 91% of EU goods, which the European Commission says amounts to €4 billion. This includes tariffs on clothing of up to 35%, chemicals up to 18%, wine up to 27% and the tariff on canned peaches of 55%.
- More market access: Mercosur farmers would be allowed to export a set amount of beef at a preferential tariff rate and 180,000 tons of sugar and 100,000 tons of chicken to the EU each year.
- Loosen public procurement rules: European companies would, for the first time, be able to bid for government contracts in the four Mercosur countries on equal terms as domestic companies.
- Safeguard mechanism: Both blocs could use emergency tariffs or similar measures to prevent particular imports, including agricultural products, from flooding their markets. The procedure would allow governments to temporarily defend sensitive sectors that find it hard to compete under the new rules.
- Geographic protections: The EU gives certain companies exclusive rights to use geographic place names for their goods. "Parma ham" or "Champagne" are some examples. The deal commits Mercosur to protect 357 European "geographic indicators" and the EU to protecting several South American indicators.
- Protection of standards: The deal includes wording to protect food, environmental and working standards in both blocs. It explicitly commits all signatories to the emissions-reduction targets of the 2015 Paris climate deal and a "commitment to fighting deforestation."
During the breakfast session, the word was first to Heineken Mexico, a strong example of successful diversification and adaptation to different markets. Thriving to stick to corporate rather than local culture, the company has managed to become the largest beer manufacturer in Europe, and the second largest in the Americas.
Afterwards, the Economic heads of the Embassies of Argentina and Brasil in Mexico, Santiago Sinopoli and Rafael Gurgel, shared their views on how the treaty was achieved and the impact it will have on EU-Mercosur trade. Both agree that the treaty will be beneficial not only to South America, but to Latin America and the EU in general, taking away existing barriers and creating new opportunities, whilst protecting quality and (food)safety.
Lastly, Luz Guerrero of Simply Orange Logistics shared a panorama with the audience, aiming to explain how The Netherlands, and the port of Rotterdam in particular, is the main entrance to Europe. Import/Export with Mercosur in particular is currently relatively small, but we are soon to expect the fruits of the EU-Mercosur treaty.