BRAZIL: EU proposes sugar quota for Mercosur

Published: 11/29/2017, 5:43:15 PM

The European Union (EU) has prepared a new offer to close a trade deal with Mercosur, which includes a quota for sugar imports, but has not yet improved access to ethanol and beef, according to Brazil's Valor Econômico newspaper.

The EU has received approval from member countries to offer a quota of 100,000 tonnes of sugar to Brazil, Argentina, Paraguay and Uruguay. But the  import quota will have a taxation of EUR98 (US$116) per tonne, which practically makes exports from Mercosur unviable, according to the local industry.

"The EU offer is unacceptable," said Géraldine Kutas, senior adviser of international affairs at the presidency of sugarcane industry association UNICA.

According to her, the 100,000 tonnes quota have no value, since Brazil will not be able to export paying this tariff.

"We want a quota with zero tariff to preserve our current access to the European market," said Kutas.

The Brazilian sugar industry demands the same quota that it currently has to export to the EU, of around 400,000 tonnes, but tariff-free, in order to have some benefit in a bi-regional agreement.

Brazil already pays a EUR98 per tonne tariff in its current quota for sugar exports to the EU. Outside the quota, the rate is around EUR340 (US$402.6) per tonne.

Europeans plan to make the new offer to Mercosur by Dec.4, which won't include benefits for ethanol and beef exports. Europeans have insisted that they will only improve offers for the two commodities at the final negotiations, which will happen in Buenos Aires, Argentina, in two weeks.

The current offer by the European Union which Mercosur considers insufficient, are quotas of 70,000 tonnes for beef and 600,000 tonnes for ethanol.