Although their talks for a free trade agreement are nearing the finishing line, the EU and Mercosur (Argentina, Brazil, Paraguay and Uruguay) are faced with immense pressure from their member countries before a meeting of their chief negotiators, in Brussels on Friday 2 February – which is due to launch a new session of technical level talks with the objective of reaching a compromise by the end of the month, before the start of the campaign for the general elections in Brazil in March.
Frenzy on European side. On the EU side, the negotiators are under "very strong pressure" from all the member states – both from those that are reluctant to make concessions on agriculture, and from those that are lending their support to conclude an agreement quickly – in an "atmosphere of frenzy", according to a European source.
Before the EU-Mercosur ministerial meeting on 30 January, the agriculture ministers from ten EU countries (Ireland, France, Austria, Italy, Greece, Slovakia, Slovenia, Poland, Hungary and Belgium) had reasserted their strong opposition on Monday 29 January to any new concession for sensitive products. Spain, Denmark, Germany, the Netherlands and Sweden had said that it was time to conclude the talks.
To try and seal an agreement, the EU proposed a recalibrated offer, on Tuesday, on access to the agricultural market. This offer was conditional on Mercosur concessions on access to its market for industrial products (particularly cars and automobile components, chemicals and pharmaceuticals), services (particularly maritime services) and public procurement, but also for agricultural products for which the EU has offensive interests, such as dairy products.
According to information gathered by EUROPE, the Commission has proposed improving its agricultural offer for all its sensitive products except ethanol (with an unchanged import quota of 600,000 tonnes).
Ireland should not pay all alone. The Commission thus proposed to bring the EU import quota for South American beef from 70,000 to 99,000 tonnes, with a fresh meat/frozen meat ratio unchanged at 50%-50% and a duty applicable for each tranche unchanged at 7.5%.
This is an offer that the primary EU agricultural union, Copa-Cogeca, deems "unacceptable", stating that 75% of beef imports to the EU (246,000 tonnes per year) already come from Mercosur, and underlining the risks for Ireland, which is already under threat from Brexit (with the UK currently absorbing 52% of Irish beef production).
The EU's recalibrated offer would also provide for improved market access for poultry, corn and sugar (with, a quota for the latter product of 120,000 tonnes at a tariff of €98 per tonne).
According to information gathered by EUROPE, Agriculture Commissioner Phil Hogan is under pressure for having put Ireland in a delicate position on beef and is in turn reportedly putting pressure on other member states to make concessions in sectors that are sensitive for them, like Italy with rice and Spain with fruit juice.
Uruguay's red line on dairy products. On the Mercosur side, the negotiators are under very strong pressure from the agri-food industry, which is pushing them to obtain a beef import quota of 150,000 tonnes by linking this requirement to the concessions it could make in response to EU demands on access to the South American market for its dairy products and fruit and vegetables.
The South American bloc must also come to terms with Uruguay's refusal to open its markets to EU dairy products, with the Uruguyan foreign minister, Rodolfo Nin Novoa, having warned on Wednesday 31 January that the issue of dairy products was "absolutely sensitive for his country".
"The introduction the EU wants for its dairy products in the Mercosur offer is very difficult to support because no meat quota can compensate for the access for diary products since it is an absolutely sensitive issue for our country", Nin Novoa stated, as reported by Uruguayan media El Observador.
"We could plan for a very small quota for cheeses that we do not produce and in a fairly distant future", he said, adding that "the current crisis in the country's dairy sector does not enable him to take account of the smallest European demand in this regard".
Nin Ninova also criticised "a lack of definition on the type of meat and other elements" in the EU's recalibrated offer.
Progress on geographical indications. While the negotiations are bitter on market access (in total, after a transitional period of 10 years, the EU would liberalise over 96% of its tariff lines and Mercosur 90%), the discussions on the protection of geographical indications – around 200 on the Mercosur side and over 350 on the EU side – are reported to be going well, according to EUROPE's sources. (Original version in French by Emmanuel Hagry)