What's your beef? Europe, Latin American trade talks
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[November 21, 2017]
By Philip Blenkinsop
BRUSSELS (Reuters) - A battle over beef
between the European Union and Argentina and Brazil could push trade
talks beyond a year-end deadline and lead to further years of delay.
On-off trade talks between the EU and the Mercosur group of Argentina,
Brazil, Paraguay and Uruguay have spanned 17 years.
But it is not clear the end-2017 deadline for a deal to set out how each
market will open to the other - from EU cars and machinery to South
American farm products - will be met.
Talks were suspended once before in 2004 and officials say missing the
current window of political opportunity could lead to more delays.
The latest round of talks on Nov 6-10 between negotiators in Brasilia
did not even address market access, the key part of any trade deal.
Beef is the main sticking point. Mercosur countries want their farmers
to sell more of their beef in Europe to compensate for a rise in
industrial imports. EU farming nations such as Ireland and France are
worried their farmers will lose out.
Both sides say they would like a deal signed during a World Trade
Organization meeting in Buenos Aires on Dec 10-13.
"We are not shadow-boxing or shuffling our feet. We want this
agreement," European Commission vice president Jyrki Katainen said last
Monday after visiting Argentinian and Brazilian presidents during the
talks the previous week.
A Mercosur official said there was a 50 percent chance of meeting the
But he also said: "There are still many threats that can derail the
negotiations... It's not only a question of substance but also a
question of timing."
Brazil holds presidential and general elections in October 2018 and
failure to do the deal before campaigning gets underway could make it
harder to conclude. A trans-Pacific trade alliance was scrapped after it
became part of the political debate in the 2016 U.S. presidential
"There's still work to be done... There is a window of opportunity which
doesn't go far beyond New Year," EU trade chief Cecilia Malmstrom said
after EU trade ministers met in Brussels earlier this month.
For the EU, the reduction in import duties could produce its most
lucrative trade deal to date. It could also highlight the EU's
commitment to multilateral partnerships compared to the more
protectionist stance of U.S. President Donald Trump.
But there are also concerns that if the deal is not done now, Mercosur
negotiations could get pushed to one side to make way for EU trade talks
with Britain before its leaves the bloc.
Mercosur officials say potential beef imports represent about half of
the export gains they sees from any deal and say the current EU offer is
They are unhappy that Europe has gradually reduced the proposed amount
of beef it would accept from Mercosur - from 100,000 tonnes per year in
2004 to 78,000 tonnes in 2016 to 70,000 tonnes in 2017.
Brazilís chief negotiator, Ambassador Ronaldo Costa Filho, said in
October the European offer was far from what Mercosur members were
expecting and would make the goal of reaching a deal by December more
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Farmer Philip Maguire puts out silage for the Hereford and Aberdeen
Angus cattle in a shed on his farm in Stepaside, Ireland November
16, 2017. Picture taken November 16, 2017. REUTERS/Clodagh Kilcoyne
The Mercosur countries are waiting for the EU to improve on the latest beef
Meanwhile, France, Ireland and a number of other beef-producing countries have
said that offer was already too high.
French Trade Minister Jean-Baptiste Lemoyne said negotiators should take their
time to get the right deal.
"The message is clear. Yes, we want an agreement, but... if we need a few more
weeks or months, it's not a drama. We've been talking for 15 years," Lemoyne
France wants the EU to recognize that the market has evolved since talks began.
Lemoyne said France's views were shared by others including Belgium, Romania and
He said Europe must first determine the total potential size of beef imports
including deals that could be struck with other countries. Trade talks with
Mexico are underway and are due to start with Australia, both beef exporters.
"We need to know what is the maximum we can go to in total. Afterwards we can
give up to this or that partner relative to what we get back," Lemoyne said.
A diplomat from a different EU country said he could not see the offer to
Mercosur on beef being increased.
"I think everything would explode," the diplomat said.
Europe's beef industry says it is already facing a squeeze as consumers shift
from red meat. Consumption has fallen 10 percent in the past decade and is seen
16 percent lower than 2007 levels in 2026, according to a European Commission
Angus Woods, the Irish Farmers Association's national livestock chairman and a
farmer with 60 beef cattle, said the EU market was broadly balanced now, with
imports and exports roughly equal.
However, Britain's exit from the EU could wreck that balance if were to impose
import duties on EU beef or if it struck its own deals for cheaper meat from
elsewhere. The EU would then have a 16 percent surplus of beef. This would be
particularly tough for Ireland as half of its beef exports to go Britain.
"On top of that you would have the Mercosur deal. Even with the UK in (the EU)
there isn't room for those kind of volumes," Woods said.
Woods also said that South American beef does not meet EU standards, which
include a system to track meat right back to the birth of the cow and rules on
transporting live animals.
A spokesman for Brazil's Ministry of Agriculture said its meat-tracking system
is up to EU standards. He said the national beef-tracking system SISBOV is
mandatory for producers who export to the EU and the data base follows each cow
for the minimum period required by the EU.
If there is a deal, it may fall short of the ambitions both sides had when talks
"We don't get everything we want, they don't get everything they want, but
hopefully together we get a deal which improves our export opportunities and
gives our consumers more choice," Katainen said.
(Additional reporting by Anthony Boadle and Roberto Samora in Brasilia; Editing
by Anna Willard)
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