Industry warns Brazil is taking control of Mercosur quotas

A row over who controls access to the EU-Mercosur trade quotas is escalating, with European agri-food groups accusing Brazil of managing preferential exports on its side – an issue the European Commission says it has already raised with Mercosur countries.

EU poultry processors and traders AVEC, agri-food traders CELCAA, dairy traders EUCOLAIT and livestock and meat traders UECBV again raised the issue in a 20 August letter to senior Commission official Pierre Bascou, seen by Euractiv.

The organisations also provided what they said was evidence that Brazil is already managing beef and poultry quotas on the export side through an export authorisation system, something that they had warned about already in May.

They argued that Brazilian controls should be limited to preventing fraud, rather than allocating access between exporters.

“In practice, the use of an EU import licence is consequently dependent on a document controlled and quantitatively limited by the exporting country,” the letter reads.

A Commission spokesperson told Euractiv that the EU executive is aware of the system set up by Brazil and is still assessing it.

“This has been raised in meetings with Brazil/Mercosur countries and will continue in upcoming institutional meetings in October and November if needed,” the spokesperson said.

The industry groups argue that the system effectively allows Brazil, or other Mercosur countries, to influence which exporters can benefit from preferential access to the EU market.

“Trade is already being disrupted. EU importers holding valid import licences are unable to source products because the relevant Mercosur documentation is no longer available,” the letter reads.

Mercosur internal frictions

The dispute comes as Mercosur countries are struggling to agree on how to split the quotas between Argentina, Brazil, Paraguay and Uruguay.

Mercosur foreign ministers failed to reach a deal at a meeting in Montevideo this week on how to divide the preferential volumes among the four countries.

The bloc has until 30 September to notify the Commission of a country-by-country distribution for the following year. If no split is notified, exporters from the four countries will continue competing for the common Mercosur quotas on a first-come, first-served basis.

Uruguay said ministers are expected to meet again within 60 days to try to reach an agreement, potentially after the 30 September deadline.

Source: Euractiv

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