Trade Regulations

CNA study shows Brazil´s agribusiness exports to benefit greatly from free trade agreement between Mercosur and Canada

Jul, 27, 2020 Posted by Sylvia Schandert

Week 202030

An estimate by Brazil´s Confederation of Agriculture and Livestock (CNA) points out that the conclusion of a free trade agreement between Mercosur and Canada has the potential to increase Brazilian export revenues of agricultural products by US$7.8 billion.

In a note, the CNA stated that “meats, cereals, flours, fruits and soy complex are the sectors of the agribusiness that have the most potential to benefit from the agreement. In the case of meat, the increase in revenue could reach US$1.4 billion per year. ” “Better quality cuts tend to have better competitiveness in the Canadian market. Animals raised in pastures, a lower percentage of fat and environmental sustainability attract the attention of the average consumer ”, says the study.

The cereals and flours segment may increase sales to Canada by US$771.9 million, with corn being the product with the greatest capacity to increase in revenue (US$324 million). For soy complex (grain and bran), the estimate is for an increase of US$703.9 million, despite competition with the United States.

The graph below shows trade between Mercosur countries and Canada:


Graph Source: DataLiner (To request a demo click here)

The CNA’s analysis concludes that in addition to generating positive impacts on Brazilian exports, the Mercosur-Canada agreement can expand the commercial borders of the South American bloc with markets that import food, beverages, and agricultural goods. “Negotiations with Canada may open the door to agreements with other countries, a fundamental strategy for consolidating Brazilian agribusiness in the main global food and beverage chains,” says the organization. In 2019, trade in agricultural products with Canada recorded a turnover of US$628.7 million.

Source: Valor Econômico

 

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