After negotiations that lasted for more than two decades, the European Union and the Mercosur bloc that includes that South American nations of Argentina, Brazil, Paraguay, and Uruguay have finally reached an agreement on one of the most important trade deals we have seen in recent times.
Acording to the EU, for farmers and food producers, the agreement establishes faster and more predictable export procedures, with harmonized rules and clearer sanitary and phytosanitary (SPS) processes.
This is designed to lower non-tariff barriers that previously hampered trade and give EU exporters a first-mover advantage in dynamic Mercosur markets while preserving the bloc’s high food-safety standards, which remain unchanged under the agreement.
Basically, this deal lowers or removes tariffs on a wide range of agricultural inputs and processed foods, so that cheaper or more predictable access to raw materials from Mercosur countries—particularly poultry, beef, seafood, vegetables, and certain fruit crops—could gradually improve input costs for European frozen food processors, especially those producing ready meals, frozen proteins and mixed-component products.
Obviously, this is not a one-way street, as competitive pressure will runs both ways. In time, we might see more imports of frozen meat, frozen poultry, or even frozen vegetable products in the EU, as these volumes are currently under the allowed quota.
And while this will most likely not mean an actual flooding of the market, prices might be affected in areas such as private label protein-based products for catering and foodservice. Long-term, this will more likely be an opportunity for European frozen food manufacturers, as exports become less restricted and, for some, new markets will open up.
What are your thoughts on this trade deal? Let me know at bogdan.angheluta@trade.media.