EU-Mercosur Free Trade Agreement: Reducing Tariffs and Impact on Agricultural Trade

The EU has reached an agreement to reduce tariff barriers with Mercosur (the bloc comprising Argentina, Brazil, Uruguay, Paraguay, and Bolivia) concerning agricultural production over seven years.

This agreement has stirred significant debate within the production sector, as the trade balance heavily favors South American countries when it comes to agricultural products. In 2023, EU exports to Mercosur totalled EUR 223.6 million (USD 243 million), while imports amounted to EUR 959.6 million (USD 1,043 million).

Alfonso Sáenz de Cámara, president of the FEPEX Potato Committee, emphasizes that there is currently no trade of fresh potatoes with South America. Alfonso Sáenz de Cámara stated:

"I understand that the agreement does not affect the trade of fresh potatoes between the two hemispheres."

However, the situation is different when it comes to the potential impact on Spanish and European agriculture concerning potatoes for processing, whether frozen or processed.

Alfonso Sáenz de Cámara added:

"This sector is reaching a very significant volume globally and requires many hectares of land to supply the industry, which is primarily based in Belgium, the Netherlands, and northern France."

The elimination of tariff barriers will occur in three phases, starting when the Agreement enters into force:

• For products with tariffs below 5%, they will be eliminated upon the agreement's entry into force.
• For products with tariffs between 5.1% and 10%, they will be eliminated over a transitional period of 4 years.
• For products with tariffs above 10.1%, they will be eliminated over a transitional period of 7 years, in equal annual instalments.